Forming A Company In Uruguay

There are two ways of setting up a business operation in Uruguay: Opening a branch of a company which already exists abroad, or opening a new business entity in Uruguay.

From a legal point of view, opening a branch of a company that exists abroad is quite straight forward. All one has to do is show the company is duly established abroad and intends to open a branch in Uruguay, with the requisite VAT (value added tax) and social security numbers. A new business can be created or acquired. The most popular company form for operating within Uruguay is a Sociedad Anonima. It's equivalent to a joint stock company or limited liability company, with a holding company as the owner of the shares. What types of companies are available in Uruguay?

There are four main types of ways to establish a business:

UNIPERSONAL (a sole-tradership). This is only for physical persons with small scale operations and therefore is not appropriate for a business. SOCIEDADES DE RESPONSIBILIDAD LIMITADA (a limited liability partnership). This form of company is only suitable for small to medium sized businesses. SOCIEDADES DE ZONA FRANCA (a limited liability company for Duty Free Zones). These are a special form of company which are required if one wants to operate out of a duty-free zone. The company must sign a contract with a duty-free zone owner in which it specifies the activities it will carry out. This contract and a business plan must be approved by the Duty Free Zone Regulator, before the company can be approved for registration. SOCIEDADES ANONIMAS ("S.A.") - literally an "Anonymous Society", it is a limited liability company. This is the most typical form of company used in Uruguay. It has several advantages over other company forms. For example, directors do not have to make social security contributions. This is important particularly for foreigners who are already making contributions in another jurisdiction or simply do not wish to make payments into the Uruguayan system. National treatment and other aspects

From a fiscal point of view foreigners and nationals are treated the same.

In terms of rights and obligations, foreigners are free to use any of the company formats independently, whether a resident of Uruguay or not. Also, there is no requirement to have a local partner in any business venture.

In addition we would highlight the following particular advantages of the Uruguayan legal regime:

Total freedom to exchange currencies; Freedom to receive and...