All questions

Tax residence and fiscal domicile

i Corporate residence

Companies incorporated in Ecuador should determine the city of their domicile. Foreign companies that have decided to conduct activities in Ecuador may obtain the approval of the Superintendence of Companies to establish a branch in Ecuador, while financial institutions, insurance companies and banks may obtain the same authorisation from the Superintendence of Banks and Insurance. With such authorisations, the entities involved establish the tax domicile of such branches as Ecuador at the same time. Like most taxpayers in Ecuador, they should register as taxpayers with the SRI.

Foreign companies receiving earnings from an Ecuadorian source may appoint an attorney-in-fact to represent them with respect to tax obligations in Ecuador. Taxpayer registration should also be obtained.

Financial institutions may have representatives in Ecuador, but they are not allowed to transact business.

ii Branch or permanent establishment

Branches of foreign companies authorised to conduct business in Ecuador are subject, in general, to the same tax regime as domestic companies.

Permanent establishments of foreign companies are qualified by the SRI if specific factors or elements of permanent presence in Ecuador exist, such as places to conduct economic activities in Ecuador, factories, warehouses, offices or a person with enough power to act as an agent of the foreign company. Such permanent establishments are taxed on the same basis as other companies doing business in Ecuador, whether incorporated in Ecuador or established as branches of foreign companies.