If you are considering company formation in Uruguay and you already run a successful enterprise elsewhere, you may find that your best bet is to register a subsidiary. Because when you register a subsidiary in Uruguay, your market entry will be faster than going through full company incorporation, while you will enjoy limited liability in relation to the activities of the entity.
Uruguay is one of Latin America’s most prosperous and highly-developed countries, with a a gross domestic product (GDP) of $56.04 billion and gross national income (GNI) of $16,230 per capita in 2019 (all figures in USD). That GNI figure places Uruguay as a “high income” nation by standards established by the World Bank.
Uruguay is known for being a regional trade hub, while locally based businesses enjoy preferential access to a range of global markets thanks to its status as a founding member of the Southern Common Market (Mercosur) — a 30-year-old economic integration initiative, which also includes Argentina, Brazil, and Paraguay.
Uruguay has a diverse economy, with the services sector contributing close to 61% of GDP, while industry contributes more than 24% and agriculture almost 6%. Among the country’s main export products are agricultural goods including meats, dairy, and cereals, as well as wood and plastics.
If you are interested in entering the Uruguayan market, read on to learn about the advantages, as well as the steps you will have to undertake when you register a subsidiary in Uruguay.
Or go ahead and reach out to us now to discuss your business options.
Register a subsidiary in Uruguay: advantages
A subsidiary in Uruguay is an entity associated with a parent company based elsewhere. It is distinct from a branch in that it is not necessary to trade under the same name as the parent company.
Choosing to register a subsidiary comes with a number of advantages, including:
Rapid entry: When you register a subsidiary in Uruguay, you are able to enter the market significantly quicker than going through a full company formation process, which takes approximately four to six weeks.
Limited liability: Your liabilities in relation to a subsidiary are more limited because the entity enjoys a degree of financial and operating freedom. Meaning you don’t have to be concerned about facing financial or legal penalties in case of non-compliance issues.
Market familiarity: When you register a subsidiary in Uruguay, you have the opportunity to get to know the market ahead of a possible deeper involvement through the likes of full company formation.
Entity options: You can choose from a number of types of companies in Uruguay when choosing the form your subsidiary should take. A popular choice among foreign investors is a limited liability company (LLC) due to limited operating restrictions and no restrictions on the repatriation of capital or profits.
How to register a subsidiary in Uruguay in 5 steps
While there are a number of entity types to choose from for your subsidiary, including a public liability company, free trade zone company, and representative office, the process for incorporating an LLC is considered below. The process to register other types of entities may vary slightly.
An LLC requires at least two shareholders and one director, who can be individuals or corporations. For individuals, it is not obligatory to live in Uruguay. If you do not have any employees or customers in the country, you are able to use your LLC as a legally tax-exempt company. Otherwise you will need to get a corporate bank account in the country and respect the relevant tax laws.
Step 1: Draft the incorporation contract
When you register a subsidiary in Uruguay and choose an LLC, you must draft an incorporation contract, which must be signed by all shareholders.
Step 2: Register with the National Registry of Commerce
You will need to present a notarized certificate including your business name, its registered office, and commercial activities, among other things, to the National Commerce Registry. This process will take approximately 30 days.
Step 3: Publish the incorporation statutes in the Official Gazette
A summary of the incorporation statutes must be published in both the Official Gazette (IMPO) and in another national newspaper. The publication must include the name of the company and partners, as well as detailing its capital, commercial focus, and address.
Step 4: Register the entity before regulatory entities
A minimum of ten days before commencing operations, your entity must be registered with local regulatory entities, including the General Tax Directorate (DGI) and Ministry of Labor and Social Security (MTTS).
Step 5: Complete the process to register a subsidiary in Uruguay by reporting to the Central Bank of Uruguay
The final step in the process to register your subsidiary in Uruguay will be to inform the Central Bank of Uruguay of the percentage of the entity that each shareholder holds. This information must be provided via an affidavit and the Central Bank must be informed of any subsequent changes within 30 days.
Biz Latin Hub can help you doing business in Uruguay
At Biz Latin Hub, our team of multilingual company formation specialists has the expertise and experience to help you enter the Uruguayan market. With our complete portfolio of back-office services, including legal and accounting support, recruitment, and commercial representation, we can be your single point of contact for launching and doing business in Uruguay, or any of the other 17 jurisdictions around Latin America and the Caribbean where we operate.
Contact us now to discuss your business options.
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