Organic Entrepreneurship & Innovation Law

The new law sets out a regulatory framework that provides incentives for the creation, development, growth and expansion of entrepreneurial projects, as a basis for the country's productive development. Key elements include: 

• Articulation:
  • The law recognizes that the State has the obligation to implement policies that encourage entrepreneurial development and growth, streamlining the process of setting up a company by making the paperwork simpler and by assigning public resources.
  • It creates a) the National Council for Entrepreneurship & Innovation, which will be responsible for designing a national entrepreneurship and innovation strategy, and b) the National Registry of Enterprises, which will classify enterprises so that they can benefit from the programs called for in the law.
• Education front: The law requires entrepreneurship training to be included in secondary education, and supports initiatives that bring young university students closer to the world of business.
• Access to capital front: The law recognizes alternative sources to the traditional ones: seed capital, venture capital, angel investing, investment risk, crowdfunding platforms. On this latter source of entrepreneurial financing, the law makes Ecuador one of the few Latin American countries where crowdfunding is ready to operate within a set regulatory framework.
• Regulatory front:
  • The creates a new form of legal business entity, the Simplified Stock Company (SAS), which is a one-person corporate legal figure, with the possibility of more partners, generally free of cost to register (with few exceptions). It is a friendly and flexible corporate figure, where the amounts of responsibility are limited to the contributions made.
  • Another key chapter, taking into account the impact of the COVID-19 pandemic on the economy, is that on the restructuring of enterprises. The regulatory decree for the law determines that a restructuring agreement is possible.