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Doing Business in Uruguay LS Abogados l Bullet Doing Business in Uruguay




Our country within its regional context considering the business advantages it offers to foreign investors.


Uruguay is a small country with a small population -about three million inhabitants-, has an extension of almost 180.000 square kilometers and is geographically situated between Argentine and Brazil.

Besides its geographical situation that allows easy movements from Argentine and Brazil, countries in which acceptable transportation and communication facilities exist, Uruguay offers other characteristics that make us consider it a possible center for offshore operations.

In first place, it has a population with a high cultural level, which makes it easy to access individuals that can develop all kinds of tasks needed for any commercial, industrial or financial operation, at a very competitive price of salaries.

Likewise, in the last past years the country shows political stability, allowing foreign investors to consider it as a possibility to develop certain activities.

Uruguay continues with a process of liberation of its economy and a reduction of the role of the State, giving priority to the management of private economic agents.


The main aspects that bring Uruguay into consideration at the time of planning offshore operations are:

1. Total freedom to move funds and exchange

The entrance and exit of funds is totally free in Uruguay, there are no limits in terms of type of currency, metals, values, or the reason the funds are remitted.

Likewise, the access to the exchange market is also free, allowing direct operation with banks and exchange offices without restrictions. The exchange rates fluctuate according to the oscillation of supply and demand, following the world market tendencies.

The most used foreign currency is the U.S. dollar, the Argentinean peso and the Brazilian real.

2. Good financial system and bank secrecy

Uruguay offers a financial market with first class banks considered such worldwide, working within a system that guarantees bank secrecy which assures confidentiality of the parties involved and of the operations.

The existence of first class banks guarantees connections with any financial market in the world, and it is easy to open and work with bank accounts in the United States, Europe or any other place, including tax heavens.

3. Communications

The majority of telephone and telecommunication services are rendered by Antel that is a public entity that has a 100% telephone digital net. Three private cellular phone companies also exist.

4. Entrance and residence advantages

The entrance of foreign travelers from Argentina, Brazil, Bolivia, Chile and Paraguay is allowed as long as the I.D. is exhibited. No passport is needed.

 It is possible for foreigners to obtain a Uruguayan permanent residency, if they can comply with minimum health and income requirements.

5. Transportation.

Uruguay has the deepest natural port of the region which is minutes away from the international airport and the free trade zone.         



Different types of companies that may be employed in Uruguay in order to develop commercial and financial activities.

Of all the possible legal entities that may be adopted to carry on business in Uruguay we understand that the most suitable for developing offshore operations is the corporation (Sociedad Anónima or SA).

The SA is a commercial company regulated by Commercial Companies Act 16.060 and has certain characteristics that make it suitable for the foreign investor, specially the following:

- Limitation of liability, given that the shareholders are only responsible up to the amount of capital contributed.

- Unlimited possibilities of use, since the purpose of the company can be as extensive as to allow the development of almost any activity, with the only exception of special authorizations required in some cases.

Besides the Commercial Companies Act N° 16.060 of September 4th 1989, there are other Acts that establish special kinds of corporations for specific purposes.

We are interested in SAZF or Sociedades Anónimas de Zona Franca (Free Zone Corporations).



Free zones were declared of national interest in Uruguay by Act N° 15.921 of December 10th 1987, with the purpose of promoting investments, exports and the regional international economic integration.

They are free commerce and industrialization zones, controlled and looked after by Uruguayan authorities and administered by the State and/or private companies, who manage the premises.

Free Zone Corporations can be direct or indirect users. Direct users acquire the right to operate in the free zone by signing a contract with the operator of the zone, indirect users are those who acquire the right to operate in the free zone by means of a contract signed with a direct user. In both cases the contracts must be approved and registered before the Free Zone Direction.

The main advantages the free zone offers are:

- Total exemption of national taxes (net worth, income, VAT, etc.) on operations done by user entities.

- Total exemption of import-export taxes on the entrance and exit of goods or services to and from the free zone.

- The advantages mentioned simplify administrative aspects since no registration as importer or exporter has to be complied with, not having to do previous deposits of taxes, etc.

- State monopolies do not apply.

- Promotional costs of certain services (energy, water, ports, etc.)

 - Possibility of having 25% of foreigners of the payroll, without paying social security contributions.

To these advantages we must add the general advantages that our country offers and that we have already mentioned, such as exchange freedom, free entrance and repatriation of capitals, etc. which apply to free zones.

The tax exemptions users of free zones have are guaranteed by the Uruguayan State, who will pay the damages generated to users if it modifies the existing regime.

Free zones are areas of Uruguayan territory, owned either privately or by the Government, enclosed and efficiently isolated where all kind of industrial, commercial and service activities -with the tax exemptions and other advantages we will later on analyze- are carried on. For example:

- Distribution Centers: commercialization, deposit, storage, conditioning, selection, classification and fractionating, assembling, manipulating or mixing of goods or raw materials coming from Uruguay or other countries. Currently this is being done by companies like: Roemers, Sony, Loreal, Lexmark and Ricoh.

- Call Centers: Are used for centralization of operations. Benefits of developing this activity are: personnel available at very competitive costs and highly qualified for the job; tax exemption on equipment use and tax free telephone services. Currently this is being done by companies like: Merrill Lynch, Sabre Holdings and RCI.

- Shared Services: Regional Headquarters and established and also the centralization of administrative tasks. This permits the allocation of costs by the different companies of a group, generating costs that can be deduced of income tax, and income for the free zone corporation that is free of taxes. Currently this is being done by companies like: Caterpillar and Assist Card.

- Financial Services: All kinds of offshore operations can be performed and some companies have established their regional Headquarters. No taxes on operations and on income generated are paid. Currently this is being done by companies like: Merrill Lynch, Wachovia, Royal Bank of Canada and Raymond James.

- Professional Services: Consulting, auditing and legal services can be rendered free of taxes. Currently this is being done by companies like: Deloitte & Touche and Price Waterhouse Coopers.

- Biotechnology: I+D with exemption of taxes on equipment and raw materials used can be performed.

 - Software:  Investigation tasks as well as Software Factories are being developed. Costs of Uruguayan professionals to develop this tasks is highly competitive and of excellent quality. The sale of the services and the acquisition of equipment and infrastructure is free of taxes.


According to the clients needs, we can provide the following services:

1.  Start up Support

We offer advice on the most adequate form to pursue the operative, considering the goals seeked by the client, and  taking into account the Uruguayan law system and trying to obtain the best commercial and tax advantages that adapt to the different forms a Uruguayan company can adopt.

At the end of this process we can determine the Uruguayan entity to be used as well as the financial tools for it.

2. Starting the Entity Selected

The two basic ways to start the entity and its operative:

- incorporation

- buying

2.1 In the first case, we participate in the whole process of incorporation of the entity that fills the clients’ requirements. The different steps of the incorporation process are:

- drafting of the articles of incorporation

- approval by the government office

- registration of the entity

-  mandatory publishing

- registering before the IRS, Social Security Office, etc.

- certification of the accounting books, minutes books, etc.


This process can take around three or four months.

2.2 In the second case, we buy an entity that is already operating. In this case we buy the entity from professionals who specialize in this. The entity has already gone through the whole incorporation process (that takes form three to four months) and is ready to operate immediately; we can guarantee that the company has not performed any operations and has no liabilities.

In this case, we offer the following services:

- buying the company from responsible professionals

- guarantee that the company has not performed any operation

- check the company's necessary documents

- perform the necessary changes in the company, such as board of director changes, register changes, changes in the IRS, Social Security, etc.

The difference with the incorporation of the company is that this option permits the immediate operation of the company.

3. Amendment of the articles of incorporation

Whether we are in presence of a company that is being bought or a company that has completed the entire incorporation process, amendments of the articles of incorporation are usually done to contemplate the shareholders necessities.

As an example we can mention: name modifications, changes in the types of shares, special clauses regarding the representation of the company, etc.

In this cases our service, that includes the participation of a public notary for the necessary certifications, is complete, since we take care of the whole reforming process:

- drafting of the amendment of the articles of incorporation

- convene and celebrate the Board of Directors and Shareholders meetings

- filling and following up of the amendment process (including the drafting of the corresponding text and necessary notary certifications)

- register of the approval in the Public Commerce Register

- publishing in the Official Newspaper and in other

- registering of the inscriptions in Public Offices


4. Administration of the Company

In these services we include those that refer to the maintenance of the company in its formal and administrative aspects if its structure does not acquire an important volume.