Auditor In Uruguay: Why Do You Need An Auditor For Your Company?

• Published date: 11 July 2023
• Subject Matter: Accounting and Audit, Corporate/Commercial Law, Government, Public Sector, Tax, Audit, Inward/ Foreign Investment, Corporate and Company Law, Tax Authorities
• Law Firm: Biz Latin Hub Group
• Author: Mr Craig Dempsey

Uruguay has become an increasingly popular destination for foreign companies looking to expand their operations due to its stable economy, favorable business environment, and strategic location in South America.

With a highly skilled workforce, modern infrastructure, and a government committed to attracting foreign investment, Uruguay offers a range of opportunities for businesses in a variety of sectors.

Whether you're looking to set up a new venture or expand an existing one, Uruguay provides an attractive and welcoming environment for foreign companies.

To ensure a successful launch or relocation of your business in Uruguay, it is essential to have a thorough understanding of the local tax and accounting regulations.

This article will delve into the importance of having an auditor in Uruguay and why its crucial for business formation in Uruguay.

An auditor in Uruguay can ensure compliance with local laws and regulations.

Why does a company need an auditor in Uruguay?

Navigating the complexities of doing business in a new country requires local expertise, especially for foreign investors. Uruguay's financial regulations, for instance, can be intricate, often requiring several months or even years to comprehend fully.

As a precautionary measure, it is highly recommended to leverage the services of local specialists to mitigate potential issues.

In recent years, Uruguay has made significant efforts to enhance its accounting and auditing environment and align with International Financial Reporting Standards (IFRS).

Here are the most common legal entity (company) structures in Uruguay:

1. The Corporation/Joint Stock Company (Sociedad Anónima - S.A) which there are two types:

• Open Corporation: companies that use public savings or have shares listed on the Montevideo Stock Exchange (BVM).
• Closed Corporation: have a limited number of shareholders and stocks are not traded publicly on the BVM.

2. The Limited Liability Company (Sociedad de Responsabilidad Limitada - S.R.L)

The S.A. is the most common legal entity structure in Uruguay.

What is the role of an auditor in Uruguay?

To comply with Uruguay's financial regulations, it is crucial to have the assistance of an experienced auditor for your company.

Uruguay mainly follows the source principle when it comes to taxes, which means that taxes are only imposed on assets, activities, and rights used within the country, regardless of the nationality or residence of the parties involved.

This means that those...