Company Registration in Uruguay

As per its territorial bounderies, Uruguay is the smallest state among all countries of the South American continent. However, this did not prevent the country from being acknowledged as the most prosperous country in South America. Uruguay's legal system is called the most reliable and safe for the business sector, and its geographical location is considered as advantageous.

Most Welfare Country of South America

As per its territorial bounderies, Uruguay is the smallest state among all countries of the South American continent. However, this did not prevent the country from being acknowledged as the most prosperous country in South America. Uruguay’s legal system is called the most reliable and safe for the business sector, and its geographical location is considered as advantageous. The political line of the country has remained unchanged for long which is favourble to create the best effective environment in business, cultural and social spheres of life. At the same time, state authorities encourage capital flows to the country in various ways. This is why today most foreign financiers consider this country in Latin American as an excellent platform to conduct profitable business activities.

In this context, one cannot but recall the special business conduct for residents of the country, which has its own characteristics:

  • gifts given to business partners does not affect the outcome of transaction
  • business associates are given expensive chocolate and bouquets of roses (not white)
  • dress code is required at business meetings – men should wear dark classical suits, women – strict-style skirts and blouses.

Profitable Decision

Why is a company registration in Uruguay profitable? The management of Uruguay encourages the  flow of investors by any means, making efforts to create the most favourable conditions for them.

Major benefits of registration of legal entities in this country include:

  • soft tax laws;
  • protection of bank secrecy, which is the basis for normal functioning in financial sector;
  • no control by tax authorities;
  • conditions persistently improved to do offshore commerce;
  • corporate conditions know for maximum flexibility (foreign residents may act as directors, there is no differentiation between jurisdictions to pay dividends, etc.);
  • free economic areas (Carrasco, Nueva Palmira, etc.);
  • democratic political vector of authorities.

Allowed Forms of Firm Registration in Uruguay

Today, such types of companies may be registered within the borders of the country:

  • shareholder (anonymous) company (SA);
  • limited liability company (SRL).
  1. Principles of SA registration

— companies of various types of activity are allowed to register (special provisions are offered for financial projects only);
— the number of shareholders-partners is not limited (starting from 1);
— shares can be produced of two types (nominal, bearer);
—assets are allowed to borrow to accumulate capital;
— non-residents have the opportunity to open accounts with banks in the country in any suitable currency;
— assets are transferred to the country of the founder of company registration without limits;
— liabilities and obligations of partners depend on their interest in the joint-stock company;
— major SA authorities: Board of Directors, Shareholders’ meeting.

  1. Principles of SRL registration

— several co-founders are required;
— the number of shareholders-partners are 2 to 50 persons;
— the period of the company activityis specified in the Charter and can be indefinite;
— the firm may be managed by a trustee (legal entity) of partners;
— there is no minimum and maximum limit on capital.

Managers of companies should be aware that at the initial stage of foundation they will have to make a minimum 50% of their interest in capital. The remaining amount should be paid in the next couple of years. All transactions related to acceptance and withdrawal of partners, increase and reduction of their shares are obliged to agree with all co-founders without exceptions.

Principles of Work in Free Economic Zones

Creation of free economic areas is the way of business encouragemen by introducing special tax rules in certain areas to engage in trading and industrial activity. Favourable terms are valid in compliance with the regulations as specified by law and services provided to the foreign market. This refers to exemption from local and national taxation.

Outside the boundaries of free zones, firms are exempted from paying tax revenues if they are engaged in provision of services outside the state.

The Uruguay trade regime is categorized into two types:

  • tax-free trading in the free economic zone;
  • trading known for the difference between the purchase price and its selling price, and this difference is charged with 0.75% tax.

The holding regime provides zero tax rate on dividend income.

Standard Form of Taxation

Taxation of companies registered in Uruguay is formed so that the only income is taxed that is received in the territory of the country. The rate equals 25%. The dividends received are not taxed, which invariably attracts shareholders from all countries to Uruguay. Financial statements are required annually.

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