The Republic of Uruguay is a small Latin American country that actively attracts foreign investors. In 2019, Google announced the installation of its data center in the country, choosing the Science Park free economic zone. However, it is more than the activities of big tech companies that are profitable in Montevideo or any other city in Uruguay. Participation in ALADI and MERCOSUR trade agreements contributes to the active development of trade with other countries in the region. Therefore, despite the country's small size, opening a business in Uruguay is profitable and promising.
Advantages of registering a company
- political and economic stability;
- convenient geographical location;
- tax preferences;
- developed infrastructure.
Main forms of legal presence and doing business
- a public company with limited liability (Sociedad Anónima - SA);
- Limited Liability Company (Sociedad de Responsabilidad Limitada - SRL);
- General Partnership (Sociedad Colectiva - SC);
- Limited Partnership (Sociedad en Commandita Simple - SCS);
- Individual Entrepreneurship (Empresa Unipersonal).
To register a company in Uruguay, entrepreneurs often choose SRL. To create a company, at least two shareholders are required. The minimum size of the share capital is 20,531 Uruguayan pesos (about 520 US dollars).
- select and reserve a unique company name;
- submit the articles of association and the memorandum of incorporation to the National Audit Office (AIN) for approval;
- register the company in Uruguay in the National Commercial Registry (RNC);
- publish an extract of the articles of incorporation in the official gazette;
- obtain a tax identification number (RUT);
- register the company with the State Insurance Bank (BPS);
- open a bank account;
- obtain additional licenses and permits (if necessary).
Legislation and regulatory environment
The current system of promoting investments is outlined in Law No. 16.906. According to the legislation, companies receive tax preferences when certain conditions are met (creation of jobs, increase of exports, conducting research and development, implementing environmentally friendly technologies, etc.).
- corporate tax - 25%;
- PIT - 12% (for non-residents), 10% to 36% (for residents);
- VAT - 22% (10% applies to certain goods and services);
- tax on dividends - from 0 to 12% (for individuals), 25% (for resident legal entities);
- no capital gains tax.
In Uruguay, there are special economic zones (SEZ) where registered companies are exempt from paying taxes for 5 to 15 years. To obtain the status of a free trade zone user, a company must be registered with the Dirección de Zonas Francas. Companies created here cannot engage in industrial, commercial, or service activities on the country's territory outside the SEZ but can engage in international services and trade. The exception is serviced directly allowed by the government.
Various tax incentives also apply to companies engaged in scientific research and companies involved in reinvesting capital in fixed assets.
Opening a business in Uruguay: how the lawyers of Prifinance can assist
Although the strategic location of Uruguay and the abundance of tax preferences contribute to attracting foreign investment, the process of creating a company takes work. Prifinance lawyers will help you understand local legislation and choose the optimal legal form of organization. Our specialists can support you in buying a ready-made company in Uruguay and quickly solve legal and administrative issues. In addition, Prifinance provides accounting services and serves companies on an annual basis.