Problems Arising When Closing Foreign Branch Offices In Ecuador

In Ecuador, the public body of control and regulation of commercial corporations has the wrong idea that foreign corporations and their branch offices are different legal entities and therefore, the closure of a foreign branch office in Ecuador -as a result of the closure of its main office- involves a long and tedious bureaucratic process of liquidation and cancellation, which is far more than just proving that the corporation does not longer exist abroad.

To open a branch office in Ecuador and start up a business, foreign corporations must "establish residence", this is, to previously request an operation permit before the Superintendence of Companies, Shares and Insurance (hereinafter "SCVS"), which is a regulatory body of commercial corporations, so that such corporations may carry out their businesses in the private field or execute public works with the State.