Top tips for hiring in Uruguay

Unlike many of its neighbors, the small South American nation of Uruguay has enjoyed relative political and economic stability, strong institutions, and comparatively low levels of perceived corruption. Some 60% of the population is middle-class – by far the largest in the region. With such positive indicators, it’s little wonder that the country is a sought-after jurisdiction by foreign companies and investors – particularly in the tech sector. Those who are hiring in Uruguay have a large talent pool to choose from. 

Known to many as the “Silicon Valley of South America,” the country has invested heavily in education for years, and has had success attracting large tech firms to its shores. Software giants like IBM, Microsoft, Oracle, Netflix, Cognizant, NetSuite, and VeriFone all have a presence in Uruguay.

Hiring in Uruguay: What do employers need to know?

Biz Latin Hub infographic about the Economic freedom for hiring in Uruguay
Uruguay is the region’s 5th country with the best economic freedom. Something to keep in mind when hiring in Uruguay

Before you start hiring employees, you will first need to get a sense of the legal, financial and cultural lay of the land. Things such as:

  • How to sort out the red tape associated with incorporation
  • Be aware of all the perks employees are legally entitled to 
  • Familiarize yourself with Uruguay’s payroll regime 
  • Know where to find the type of talent you’re looking for
  • Learn how much an average salary is vs. a competitive one 
  • Consider hiring freelance/remote talent 

The above is by no means an exhaustive list, but it’s a good foundation of which to embark on your market entry into this small but dynamic country. As with any new and unfamiliar jurisdiction, it’s best to seek the services of a PEO in Uruguay early on in the incorporation and hiring process. 

Top 6 tips & advice for foreign companies looking to hire in Uruguay

Based on our extensive experience, we can give you six things to keep in mind to ease your search to hire in Uruguay: 

  1. Bureaucracy is alive and well in Uruguay.
  2. What are the employee benefits and entitlements in Uruguay?
  3. How does payroll work in Uruguay?
  4. Where to find the skilled employees you need?
  5. How to attract and retain top talent.
  6. Seek out freelancers when needed.

1. Bureaucracy is alive and well in Uruguay

Despite its reputation as an important technology hub in Latin America, setting up shop there is a lengthy, bureaucratic process. There are dozens of documents to collect – from application forms, company documents, approval requests, bank records, etc. Even if everything is in order, an incorporation application takes three months to be processed, and costs roughly $5,000 USD. All this needs to be squared away before hiring in Uruguay can begin.

2. Employee benefits and entitlements in Uruguay

There’s a litany of employee perks and benefits that companies are legally required to give its full-time employees. They include a 13th monthly salary, 20 days’ vacation, overtime must be 2.5 times the regular salary amount, maternity and paternity leave, sick leave, health and pension benefits, and employee termination severance. Also, there are 16 public holidays per year in Uruguay. 

3. Payroll for companies in Uruguay

Employers are typically required to withhold a total of 12.6 percent of an employee’s income for health insurance, pension, and other things (something called a “Labor Credit Guarantee”). When hiring in Uruguay, companies have the option to set up internal or remote payroll systems – the former being ideal for independent companies or subsidiaries, and the latter system adds Uruguayan employees to the parent company’s payroll.

4. Where to find the skilled employees you need

Aside from posting job openings in social media and your company’s website, many companies advertise on job boards and freelancer websites like UpWork – particularly for IT and tech related talent. Companies might also benefit from the services of a recruiting agency, a local headhunter for senior level positions, or indeed, take advantage of the hiring and PEO services offered by Biz Latin Hub.

5. Attract and retain top talent with competitive wages

Arguably the main driver of the offshoring/nearshoring phenomenon in Latin America is the ability to get highly qualified workers for a fraction of the labor costs of the United States or Europe. This rings true in Uruguay, where labor costs in the tech sector were until recently 40 percent lower than in the United States. But the recent surge in demand for Latin American tech talent has sent salaries skyrocketing; programmers, software developers, designers and engineers have been reported to receive compensation of up to 72,000 USD annually. 

6. Seek out remote/freelance talent when needed

If hiring in Uruguay isn’t going according to plan, you can hire a freelancer, remote worker and/or independent contractor to fill an immediate need. This can be on a temporary or more permanent basis, depending on what your company and the contractor agree on. If you’d prefer to hire skilled freelancers directly, try searching on Toptal, UpWork or by searching “software developers in Uruguay” on Linkedin, for example. 

SEE ALSO: 4 good reasons to invest in Uruguay

Biz Latin Hub infographic about employment law in Uruguay for an article about hiring in Uruguay
When hiring in Uruguay, you have to know its employment law

Hiring in Uruguay: What are the largest industries in the country?

Another aspect that can influence your decision to incorporate (and then begin hiring in Uruguay) is to get a sense of what are the largest and quickest-growing industries in the country. They are:

  • Beef – Beef exports have increased since Uruguay joined the Mercosur agreement in 1991, allowing the country to reach international markets.
  • Energy – While Uruguay imports nearly all its crude oil, it has the capacity to refine various petroleum products, and also possesses abundant renewable sources of energy.
  • Mining – Even though this sector does not contribute much to the country’s economy, there has been some activity in gold and cement production, as well as granite extraction, in recent years.
  • Plastics – Plastics are one of Uruguay’s most important industries and is a principal driver of the nation’s economy.
  • Telecommunications – Uruguay’s small population has allowed the country to achieve 100 percent digitalization of its major lines. Recent efforts have been made to liberalize the telecoms sector, permitting private enterprise to enter the cellular carrier market. 
  • Tourism – The travel and tourism sector accounted for 10.3 percent of Uruguay’s GDP in 2020.

Biz Latin Hub can help you with hiring in Uruguay 

At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.

Our unrivalled reach means we are ideally placed to support multi-jurisdiction market entries and cross border operations.

As well as knowledge about hiring in Uruguay, our portfolio of services includes hiring & PEO accounting & taxation, company formation, bank account opening, and corporate legal services.

Contact us today to find out more about how we can assist you in finding top talent, or otherwise doing business in Latin America and the Caribbean.

If this article about hiring in Uruguay was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.

A BLH infogrpahic showing key services offered by the company
Biz Latin Hub can help you with hiring in Uruguay

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Craig Dempsey

Craig Dempsey

Craig is a seasoned business professional in Latin America. He is the Managing Director and Co-Founder of the Biz Latin Hub Group that specializes in the provision market entry and back office services. Craig holds a degree in Mechanical Engineering, with honors and a Master's Degree in Project Management from the University of New South Wales. Craig is also an active board member on the Australian Colombian Business Council, and likewise also active with the Australian Latin American Business Council.

Craig is also a military veteran, having served in the Australian military on numerous overseas missions and also a former mining executive with experience in various overseas jurisdictions, including, Canada, Australia, Peru and Colombia.

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