Uruguay

Company Formation in Uruguay

Uruguay is a good destination to set-up your company to cater to the South American market. YourGlobalPro can assist in Uruguay for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval, Trademark Registration and Citizenship Services.

About the Country

The Oriental Republic of Uruguay (Uruguay) is a sovereign country the southeastern region of South America. The country is bordered by Argentina and Brazil as well as the Rio de la Plata (River of Silver) and the Atlantic Ocean. Geographically, Uruguay is the second-smallest nation in the continent. The below content will explain you in detail about the requirements for the company formation in Uruguay, know more about the process of trademark registration in Uruguay and understand the Uruguay Legal and Compliance requirements.

Uruguay

Doing Business Introduction

Uruguay is ranked first in Latin America in terms of democracy, lack of corruption, press freedom and size of middle class and prosperity. It also ranks second in terms of economic freedom, income equality, and inflow of foreign denominated investment.

The country is the one of the world’s largest supplier of soybeans, greasy wool, horse meat, beeswax and quinces.  Beef is also considered as a main export commodity of the country. The export-oriented agricultural sector of the country contributes 9.3% of the GDP and employs 13% of its workforce.  Tourism is also a stable industry in the country, employing about 10% of the country’s workforce.  As per Doing business report of The World Bank –Uruguay ranks 90 for 2017 survey in terms of ease in doing business.

YourGlobalPro professionals can assist its client with any type of company formation in Uruguay, trademark registration in Uruguay and other recurring services for your business in Uruguay.

Incorporation - Types of Business Entities

Before starting the business, the first decisions to make is to determine what form of business entity to establish. There are several types of entities that can be incorporated in Uruguay are as mentioned below:

  • Limited Liability Company (Sociedades de responsibilidad limitada)
  • Stock Company (Sociedades Anonimas)
  • Free Trade Company (Sociedades de Zona Franca)
  • Branch (Sucursal)
  • Representative Office (Oficina de Representation)

Time Frame for Incorporation of Company in Uruguay varies from depending on the type of entity selected and each business type has its own advantages and disadvantages. YourGlobalPro professionals estimate the time required for Uruguay Company formation process to be completed is 6-8 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Uruguay:

  • Companies in Uruguay can be exempted from tax if they do not have staff in Uruguay and customers in Uruguay.
  • Companies generating income from overseas sources can be exempted from withholding taxes.
  • Uruguay has established export processing free zones that provide exemption from tax and custom duties as well as a more simplified custom procedure.
  • As a member of the Mercosur, Uruguay provides free trade agreements with several countries such as Mexico and India.
  • Uruguay’s Port of Montevideo is the most advanced container terminal in South America.

Tax Registration and Filing

Corporations are taxed on Uruguay-source income, defined as income derived from activities performed, property situated or economic rights used in Uruguay.

Corporate Income Tax Rate 25%
Capital gains tax 25%
Branch Profits Tax Rate 25%
Branch Remittance Tax 7%
Dividends 7%
Interest 12%
Royalties 12%
Value Added Tax Standard Rate - 22%
Rate on basic Food and Pharmaceuticals - 10%
Fiscal Year 1 January to 31 December
Monthly Advance Tax Payments To be paid in proportion
Filing Annual Tax Returns To be made by the fourth month after the end of the accounting period.

Double Tax Treaty

Double Tax Agreements (DTA) regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject.  Uruguay has double tax treaty agreements with the following countries: Argentina, Ecuador, Finland, Germany, Hungary, India, South Korea, Liechtenstein, Malta, Mexico, Portugal, Romania, Spain, Switzerland.

Trademark registration

Trademark registration in Uruguay is done through the Trademark Office through a local agent.  A non-legalized power of attorney is sufficient. A certificate of registration shall remain in force for 10 years and can be renewed for another 10 years. It takes approximately 18-20 months from first filing to registration

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in Uruguay for your business. For assistance or advice in the matter of the trademark registration in Uruguay or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Uruguay:

  • Shareholders, the highest corporate authority for corporations, must meet at least once a year to approve the annual balance sheet and the distribution of earnings, and to appoint board of directors or administrators.
  • The directors or administrator must be registered under the Trade Register of the Ministry of Economics and Finances so that their acts will be considered as effective.
  • The board of directors must meet once a month for publicly traded companies and once a year for close corporations.
  • Companies must keep the following books: Journal, Inventory Book, Letter Copybook, Minutes of Board Meetings, Minutes of Shareholders Meetings, Stock Ledger and Shareholders Meeting Attendance Book. These records must have the seal of the Trade Register.

Accounting Services

Accounting practices in the Uruguay are set by the International Financial Reporting Standards (PFRS). However, companies regulated by the Central Bank of Uruguay are covered by an industry specific accounting principle.

YourGlobalPro professionals assist you with the entire bookkeeping and accounting services for your Uruguay Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

Statutory audit is required for financial intermediation firms, publicly traded corporations and for free trade zone companies that meet the following: a) has total assets exceeding $585,000 or b) has a total turnover exceeding $2 million.

YourGlobalPro professionals provide you auditing services as required by your business in Uruguay.

Banking

Opening an account in a bank is quite easy in Uruguay. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.

The major banks in Uruguay are Bank of the Uruguay Islands (BPI), Banco de Oro (BDO) and Metrobank. All the banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals facilitates all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Uruguay.

Legal and Compliance

In Uruguay, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Uruguay legal and compliance requirement to be followed by incorporated entities:

  • Stock closed corporations must have at least 2 founder shareholders that will sign the foundation minutes and approve the By-Laws. These By-Laws should be approved by the National Internal Auditory.
  • Stock publicly traded corporations must have promoters that will draw up the foundation program to be submitted and approved by the National Internal Auditory. Publicly traded corporations must have at least 2 founder shareholders.
  • At least 25% of the authorized share capital must be paid in for stock companies.
  • Stock corporations that issue bearer shares must register its shareholders with the Central Bank of Uruguay.
  • Limited Liability Companies must have a minimum of 2 partners and a maximum of 50. There are no restrictions on the nationality or domicile of partners.
  • Branches are regulated by provisions same for local companies. The Head Office is liable for all obligations assumed by the branch.  Foreign entity can be summoned in Uruguay for any legal cases faced by the Branch.
  • Representative offices are not allowed to perform any commercial activities in Uruguay.

YourGlobalPro professionals can assist you with Uruguay Legal and compliance requirements.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Uruguay:

  • Term of labor contracts could be for indefinite period. Per practice, a probation period of 3 months is usually granted to assess the suitability of the employee to the job.
  • Employers are required to pay a premium of 100% of hourly rate for overtime work.
  • Paid annual leaves are as follows:
    • Employees with 1 year of tenure: 20 days
    • Employees with 5 years of tenure: 21 days
    • Employees with 10 years of tenure: 22 days
  • Women employees are entitled to mandatory maternity leave of at a minimum 98 days. They are also entitled to 100% wages while on leave.
  • Maximum number of working days per week is 6 days.
  • Foreign nationals may enter Uruguay under temporary or permanent visas. Different types of temporary visas are issued for different individuals and for different purposes.
  • A foreign national may work in Uruguay under a permanent visa for a period lasting the length of the employment contract. If the period is less than 180 days, a provisory identity sheet of the identity card should be requested.
  • Permanent visas are issued to foreign nationals who intend to establish permanent residence in Uruguay.

Country Statistics

Capital Montevideo
Largest City Montevideo
Total Area 176,215 Sq. Km.
Population 3,427,000
Density 18.60 / Sq. Km.
Currency Uruguayan Peso
Government Unitary Presidential Constitutional Republic
Official Language Spanish
Religion Christianity: 58%
Unaffiliated: 41%
Others: 1%
Government Office Hours Mon-Fri 0900-1800
Business Office Hours Mon-Fri 0900-1800
Banks Hours Mon-Fri 1300 to 1700

Get a FREE Quote for Company formation in this country

Download this Country Factsheet