Company Formation in Uruguay
Updated on Tuesday 29th August 2023
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Uruguay is a country that enjoys the right of economic freedom and thus many foreign investors often choose it for setting up businesses. For more information about the company formation procedure in Uruguay, you can contact our team of specialists.
Types of companies in Uruguay
There are several types of legal entities in Uruguay and a foreign entrepreneur should first decide on the best choice for him. It can be a private or a public limited liability company, a general or a limited partnership, or a corporation.
However, the private limited liability company is the one that is usually preferred when a foreign investor wants to open a company in Uruguay.
List of requirements for opening a limited liability company in Uruguay
Even though it is not a difficult process, for the company formation in Uruguay you still need to meet some requirements when opting for the above-mentioned business setup:
- minimum 1 director;
- at least 2 shareholders (they can be of any nationality and they can be natural or legal persons);
- a share capital of minimum $1;
- the company is permitted to be 100% foreign-owned.
Our company formation experts can assist you in opening a limited liability company in Uruguay, so feel free to ask for our counsel. Our consultants in company formation in Uruguay have prepared, in the list below, few key aspects on the characteristics of the limited liability company:
- the overall registration process can be completed in approximately 9 weeks;
- in order to open a company in Uruguay, you will also need a corporate bank account, and the formalities for its setup will take around 4 weeks;
- this legal entity is legally required to submit tax returns and therefore, must obtain a tax identification number (and a tax certificate) upon its incorporation;
- the registration is carried through the National Chamber of Commerce and Services of Uruguay;
- its incorporation does not require the physical presence of the founders.
For the latter, investors need to sign the power of attorney, a document through which foreign investors prescribe the ways in which their legal representatives (such as our team of consultants in company registration in Uruguay) can act on behalf of the investors.
The right to legal representation is granted in all countries and it is also available in countries that allow offshore company formation, where investors do not have to participate in the incorporation procedure, unless stated otherwise for specific steps.
Process of registering a company in Uruguay
When wanting to register a company in Uruguay, you should first choose and reserve a name for the legal entity, a step that can be done online. Our team can help you with the procedures of the online portal.
Then you have to open a bank account and also deposit the requested capital. You will have to pay a fee and the amount of this commission depends on the bank. Furthermore, the signatures and the operating code regulations need to be notarized.
The next step is to register and incorporate the company with an office of Empresa en el Día (an innovating mechanism that makes the registration process easier). Then you also have to submit all documents and pay all registration fees at Empresa en el Dia.
Last, you need to pay the required taxes and fees at a payment agency and also publish a notice in the official gazette announcing that you are forming a company in Uruguay.
Obtaining tax identification in Uruguay
As mentioned above, a company in Uruguay must have a tax identification number. The procedure is handled by the Tax Administration Directorate (Direccion General Impositiva), which will issue the tax identification number only after receiving specific company documents, such as:
- the minutes of the shareholders’ meeting;
- a document on the shareholding structure of the newly founded company.
How can a foreign company expand in Uruguay?
If you are already the holder of a legal entity operating elsewhere and you want to enter the commercial market in Uruguay, you have the possibility of setting up one of the legal entities regulated by the local law (such as the limited liability company).
There is also the option to expand through a branch office, which is simply a sub-division of the parent company operating overseas. This is recommended when the investors plan to replicate the same business model that the parent company implements, while bearing full responsibility for the company set up in Uruguay.
In general, the branch office is selected for company formation in Uruguay by businessmen who own large companies. For large businesses, there is also the possibility to operate in Uruguay through a corporation (open – or public, and closed – or private).
The corporation has similar characteristics as the ones of the limited liability company (the incorporation process takes the same amount of time, it also needs 2 shareholders, a corporate bank account, etc.).
Please mind that having a corporate bank account is a necessary legal procedure imposed to all company types and it is also required in offshore jurisdictions, where investors have to set up an offshore bank account.
Another compulsory requirement is to have a registered address in Uruguay – our consultants can help you find a suitable location and can intermediate the signing of a rental/purchase contract, depending on your plans and available budget.
Hiring employees in Uruguay
In order to carry out a commercial activity here, you will need to hire employees (you can hire both local and foreign workforce). When this happens, you need to address the Ministry of Work and Social Security, for the registration of the employment contracts.
Employers have this obligation regardless of what kind of company they will set up here. Our consultants can present other legal matters concerning employment (such as employment visas for foreign workers).
Having such a developed and stable economy, Uruguay is a suitable place for investing and one of the advantages is that the company registration process is an easy one and it cannot take more than a few weeks to complete.
Our company formation team assists foreign investors in making the best business decisions, not only in the procedures for opening a company in Uruguay, but also in many other countries of the world.