Although often overlooked because of its small size, Uruguay is considered a developed country on the South American continent. Of recent, the Uruguayan government has eliminated many limitations, so doing business in Uruguay is now easier than ever.
Entrepreneurs and investors choose to start a business in Uruguay because its jurisdiction is considered one of the most reliable and safe for entrepreneurs, and its geographical location is very profitable.
Uruguay is also one of the founding members of MERCOSUR, a union in the south of Latin America that promotes free trade, and fluid movement.
Uruguay possesses interesting business opportunities, for both small and large companies, and its government does its best to attract investors and tries to create favorable conditions for them. If you intend to incorporate a company in Uruguay, outlined next is the process involved.
Company formation process in Uruguay
The company registration process in Uruguay is not bureaucratized and is generally straightforward and it involves the following steps:
Choose the right type of legal structure for your business
After defining your business goals, the types of operations you are going to conduct, and deciding on the most suitable name for your business in Uruguay, choosing the right business structure is the next important consideration.
To decide which type of legal structure is the best for your business, it is important to consider the number of members or shareholders, the capital available, and the size of the company.
These are the most common types of companies in Uruguay:
- Corporation ( “Sociedad anónima,” or S.A.): this is a type of company used to generate general commercial or industrial activities and is used often by large companies. A Corporation in Uruguay doesn’t have a minimum or maximum capital requirement and can conduct any type of business activity. The liability of the shareholders is restricted to their capital contribution and they don’t have to hold any personal accountability for the company’s actions.
- Limited Liability Company ( “Sociedad de Responsabilidad Limitada,” or S.R.L): this is one of the most common types of legal structure used by small and medium-sized companies. As is the case for corporations, there are no restrictions on activities to be conducted by the S.R.L. Also, it may have between a minimum of 2 and a maximum of 50 partners
- SAS (Sociedad pour acciones simplificadas) which is also known as a Simplified Stock Company: please read more about the Uruguay SAS.
Entrepreneurs and investors can also establish a foreign branch office in Uruguay.
Prepare the company bylaws and Articles of Association
The bylaws documentation enables the establishment of the company in Uruguay. All this information needs to be evaluated by a local lawyer and notarized by a public notary in Uruguay.
Submit the company bylaws and Articles of Association to the National Audit Office (AIN) for authorization
Once the bylaws are notarized by a public notary in Uruguay, they need to be submitted to the National Audit Office (Auditoría Interna de la Nación or AIN) for approval. This process can be done online or in person.
The AIN is an office that operates 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 by the AIN, they will provide a certificate.
Register the company with the National Trade Registry (RNC)
After the validation by the National Audit Offic (Tribunal de Cuentas), you will need to bring your bylaws for registration to the National Trade Register (RNC). The RNC is an agency that works with the General Register Office or ‘Dirección General de Registros’, part of the Ministry of Education and Culture.
Publish an extract of the bylaws in the Official Gazette and another newspaper
The Registration of the company’s Bylaws will be confirmed by being published in the Official Gazette (Diario Oficial de Uruguay) and another newspaper of mass circulation.
Register the company in The National Tax Administration Office
Now that the business is almost registered in Uruguay, to start having commercial activity in compliance with local tax regulations, the company must register in the National Tax Administration Office (Dirección General Impositivia (DGI)) to obtain its taxpayer ID number or RUT (Registro Único Tributario).
Register the company with the State Insurance Bank
One of the final steps of a company formation process in Uruguay is registering the company with the State Insurance Bank (Banco de Seguros del Estado or BSE) to be able to start hiring staff. This step is mandatory and enables the employees to access insurance in case of illness and accidents.
Open a corporate bank account
Opening a bank account for the business is another important post-incorporation process. When selecting a bank to open an account with, it’s important to choose a bank that has flexible policies.
Also, In Uruguay, you need to assign a legal representative who will be the person that represents the company to the government and is responsible for legal processes and duties.
Uruguay is a country with a diverse and mature business environment and has positioned itself as one of the best countries to set up a business in Latin America. If you are interested in entering the Uruguayan market, go ahead and contact your Damalion expert now.
