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.

  1. 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.
  2. 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:

  1. UNIPERSONAL (a sole-tradership). This is only for physical persons with small scale operations and therefore is not appropriate for a business.
  2. SOCIEDADES DE RESPONSIBILIDAD LIMITADA (a limited liability partnership). This form of company is only suitable for small to medium sized businesses.
  3. 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.
  4. 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:

  1. Total freedom to exchange currencies;
  2. Freedom to receive and remit funds;
  3. Any and all foreign currencies can be used, so that it is possible to contract in any currency and that contract will also be enforceable in court;
  4. Total confidentiality (as a result of the legal provisions covering bank secrecy, client confidentiality for the legal and accounting professions).

Types of shares

In S.A.'s the shares can be bearer shares, which is easy for transactional purposes.

Historically, bearer shares were popular as a means of hiding the real ownership of a company. In recent years, legislation has been introduced by which the shares must have a named owner. Or, alternatively the Uruguayan Central Bank must be informed of the names of the final beneficial owners. The Central Bank keeps a register to be used in the case that a court orders that the veil of corporate ownership be lifted.

S.A.'s receive special tax treatment if they only operate abroad, paying a highly reduced level of taxes. The fact that SA's are subject to Central Bank and Commerce Register supervision – which do not affect the good running of the company in any way – means that Uruguayan SA's have been favourably compared to similar company forms in other jurisdictions that exercise no control at all over the activities of the company.


It is important to highlight that income/assets are only taxed on activities carried out in Uruguay – not on worldwide activities. (The principle of territoriality applies.) Also, no type of retention is made when dividends are sent abroad.

The most important taxes to be paid in the case of a company trading within Uruguay are:

  • IRAE (Impuesto a la Renta de Actividades Empresariales – Income Tax on Business Activities) at the rate of 25% on the taxable income.
  • IRPF (Impuesto a la renta de Personas Fisicas –Income Tax on Physical Persons), who in the case of distributing profits must pay tax at the rate of 7%.
  • IRNR (Impuesto a la Renta de No Residentes – Income Tax for Non-Residents) payable at the same rate as the previous mentioned tax.
  • I.P. (Impuesto al Patrimonio - Asset Tax) which only covers specific assets within Uruguay at the rate of 1.5% per annum.

Cost of formation and time taken

There are two ways to form an S.A. in Uruguay:

  1. Buying a company off-the-shelf ready to operate, with a standard broad set of articles and with a name not that of choice.
  2. Forming one's own company with the name of choice and articles specific to the companies objects.

In both cases the costs are likely to be around U$S5000. The major difference is forming one's own company takes around 3 months, due to the bureaucratic processes involved.


Uruguay offer several company forms to fit a variety of business purposes.

It is still possible to have a company with bearer shares, with the anonymity that it implies, but with the caveat that now the Central Bank must still be given the names of the beneficial owners.

The start-up costs are relatively high. But once a company is formed, the effective tax rates are not high compared to many jurisdictions. Also, there is complete freedom in how any profit generated by the company is distributed.

At the same time, companies are subject to administrative controls and Central Bank requirements, which provides a degree of security for foreign investors unmatched in the region.

A Uruguayan company can be used as a trading entity. If a company's main activities are carried out abroad then virtually no taxes are paid. Also, if a Duty Free Zone company is used, no taxes are payable (except for social security payments for employees).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.