The Republic of Uruguay is a country in Latin America, that is characterized by enviable political stability and extremely progressive social legislation.
Uruguay is the third most credible country in Latin America. Therefore, more and more entrepreneurs are looking to buy or register companies in Uruguay.
Why register a company in Uruguay?
- democratic policy of the government
- liberal tax legislation
- lack of currency control
- existence of such free zones
- progressive conditions for doing offshore business in the country
- principle of preservation of bank secrecy, underlying the functioning of the financial sector
Steps to incorporate a business in Uruguay
The Uruguay government is keen on capital inflows, so financiers from all over the globe consider this country a prosperous business area. If you are among such businessmen, below are the steps to take to incorporate a company in Uruguay.
Choose the right type of company and legal structure for your business in Uruguay
To decide which kind of company is the best for your business, it is crucial to keep in mind the number of members or shareholders, the capital available, and the size of the company.
These are the 3 most common types of companies in Uruguay:
- Corporation (Sociedad Anónima – S.A.)
Generally, a corporation requires at least two founding members, who can either be Uruguay residents or foreigners. In addition, there is a board of directors that deals with the management functions. Members of the board can either be local or foreign individuals with domiciles inside or outside of Uruguay. A significant advantage of corporations is that they have no limitations as to the activities they conducted, except in cases where they directed financial and insurance operations.
- Limited Liability Partnerships (Sociedad de Responsibilidad Limitada – S.R.L.)
An S.R.L. is the most commonly used business type in Uruguay. Similar to corporations, Limited Liability Partnerships have no restrictions in conducting activities except for financial and insurance operations. And as for its establishment, there should be at least 2 members to a limit of 50 partners.
- SAS (Sociedad pour acciones simplificadas) is known as a Simplified Stock Company in English. You may know more about the Uruguay Simplified Stock Company here.
Appoint a legal representative
In Uruguay, you need to assign a legal representative who will be the person that will represent the company to the government and will be responsible for legal processes and duties. The legal representative of a company in Uruguay can either be a local or a foreigner. A Power of Attorney (POA) will be required to permit your legal representative to carry out the process locally. This Power of Attorney has to be signed by the corresponding party.
All documentation that comes from abroad must be appropriately legalized and apostilled, and these hard copy documents must be sent to Uruguay. Finally, consider that documentation that isn’t in Uruguay will require interpretations to be accepted by the local agencies.
Prepare the Articles of Incorporation and the bylaws of the company
The bylaws documentation permits the constitution of the company in Uruguay. All this information needs to be evaluated by a local lawyer and notarized by a public notary in Uruguay. Note that this document has to include, the Company name, Power of Attorney of the Legal Representative, full Information on the share capital, your Registered office address, the Management structure, Purpose of activity, Profit-sharing and loss-bearing method, and finally, the Extinction and liquidation detail plans.
Submit the bylaws and Articles of Incorporation
Once the bylaws are notarized, they must be submitted to the National Audit Office or Auditoría Interna de la Nación (AIN) for authorization. This process can take up to thirty days and can be done online or in person.
The AIN is an office that runs within the Ministry of Economy and Finance of Uruguay (MEF), and it’s responsible for the management of the bylaws of companies. Once the bylaws are approved, the AIN will provide a certificate.
Register the company
Once the by-laws have been authorized by the AIN, the company shall be registered with the Register of Legal Entities-National Trade Register Section (RNC) in order to comply with part of the essential requirements to be approved of their business type. This process, at times, can be especially complex, so the support of a local lawyer always proves rather valuable.
This process can take up to 5 business days and the documents can be submitted at their online platform.
Publish an extract of the bylaws on the Official Gazette
Once the RNC authorizes the registration of the company, an extract of the bylaws has to be published in the Official Gazette and in another newspaper of your choosing, stating that the company is operational in Uruguay. The process usually takes 2 working days.
Register your company at the Single Window to obtain a taxpayer ID number (RUT) and registration at the Social Security Administration (BPS)
The Single Window is a service that unifies and simplifies operations given by the Social Security Administration or ‘Banco de Provisión Social’ (BPS) and the Tax Authority or ‘Dirección General Impositivia’ (DGI). At the Single window, the company will obtain a taxpayer Identification Number or Registro Único Tributario(RUT).
The documents to be submitted for this process includes Application forms for both procedures, 2 copies of the ID of the partners or legal representative, and 2 notarized copies of a document including the following information of the founders of the company: signature, personal information, and registered address.
Register the company with the State Insurance Bank (BSE)
One of the last steps in the company formation process in Uruguay is to register the company with the State Insurance Bank or ‘Banco de Seguros del Estado’ (BSE) in order to be able to start employing staff. The State Insurance Bank is an independent public body within the Uruguayan State. Employers must provide occupational injuries and illnesses insurance coverage, from the BSE, for all employees.
Open a corporate bank account
Each bank gives various types of accounts with many advantages depending on the agreement and goals of the company. It is important to consider that some banks may have foreign transaction restrictions for companies that have foreign shareholders. It is significant to take this into account as part of your company establishment strategy, as identifying a bank that has adaptable policies will specify when your new company can start its operations.
Foreign Branch Offices
You can either form an independent local company in Uruguay or establish an extension of your parent company established in another country. The latter is hypothetically free to achieve any business activities in the country. However, it must follow the systems directed by the parent company.
Upon a foreign branch office’s registry with the National Trade Register (RNC), it must indicate the parent company’s name, domicile, capital, and its managers.
Uruguay is regarded as the smallest country on the South American continent. But the small size of the state did not impede it from obtaining the status of The most affluent country in Latin America.
To ensure you register your company in the right way, you can get in touch with Damalion, and our team of experts will help as much as possible.
