Proudly boasting the social title of “most progressive nation in South America“, Uruguay is truly an embodiment of effective social policy use in order to create a more egalitarian society. With impressive healthcare and educations systems, Uruguay would be considered a nation of ‘High Human Capital’ – a haven for companies looking for a skilled workforce to help them carry out their operations.
Part of Uruguay’s charm is its location, being nestled between the biggest economic powers of the continent – Brazil & Argentina – giving it an array of attractive benefits for its visitors and inhabitants. The Port of Montevideo provides direct access to the country’s populous capital for the rest of the world, which is also home to several Free Trade Zones, centuries worth of country-defining history and miles worth of stunning beaches.
This article will take you through the important steps for forming a company and the process of gaining a visa in Uruguay.
Legal structure, Share Capital and Shareholders
One legal structure which can be used to conduct commercial activities in the country is a Public Limited Company. The shareholders of this company may be local or foreign individuals and/or corporate entities.
Regarding the authorized share capital, the Commercial Companies Law (Art. 6 and Art.251) requires a minimum initial capital when setting up the Company. During the company set-up, the owners must make a contribution of 25% of the share capital.
Incorporate a Local Company – A Public Limited Company
In Uruguay, 100% foreign ownership is allowed. At least 2 shareholders (local or foreign individuals or corporate entities), shall sign the memorandum and articles of association, agreeing to create the company. If the founding member is a foreign corporate entity, its company board members will have to agree on the creation of the Uruguayan company, granting a Power of Attorney (POA) to an individual who would incorporate the company on the corporate entity’s behalf. During the company set up, the name of the legal entity needs to be agreed upon and the Board members need to be appointed.
Once the memorandum and articles of association are signed, these shall be approved by “Auditoría Interna de la Nación” and subsequently registered with the “Registro Público y General de Comercio” and then published in the “Diario oficial”.
All companies in Uruguay, including the Public Limited Company, must meet some minimum statutory requirements:
- Register a fiscal address in Uruguay.
- Appoint a legal resident agent – who must be a Uruguayan national.
- File regular tax declarations with the national tax authority.
A local law and/or accounting firm will be able to help with the above requirements.
Important: The company incorporation process takes between 1-2 months once all required documentation has been submitted.
Purchase an Existing Public Limited Company
In Uruguay, it is feasible to acquire an already existing Public Limited Company. The name of the Company can be chosen prior to the acquisition and if the name were to be modified, the memorandum of association would need to be updated. Such an update should be approved by “Auditoría Interna de la Nación” and subsequently registered with the “Registro Público y General de Comercio”.
The newly acquired company must meet similar requirements to that of a newly formed company, including a registration of at least 2 shareholders and the appointment of a company Director (who may or may not be the company shareholder). This shareholder can be local or foreign. Additionally, an acquired company must also adhere to the minimum statutory requirements of having a local resident agent, a fiscal address and filing regular tax declarations.
Residence formalities depend on the person´s nationality, their reason for seeking residency and on the term of their stay.
Temporary Residence – Nationals of Mercosur Member States
Temporary residency shall not exceed 2 years and upon completion of the 2-year period, temporary residents may turn into permanent residents; the application process is to be initiated within 90 days prior to the temporary residence expiration date.
Temporary Residence – Non-Mercosur Nationals
Applies to individuals who perform activities in Uruguay for longer than 180 days and hold a fixed-term work contract.
The duration of this is 2 years and is extendable once, up to 2 additional years.
Upon expiration of the legal deadline, temporary residents may turn into permanent residents (the application process is to be initiated within 90 days prior to the temporary residence expiration date). The applicant must provide evidence of performing the activity that allowed for the admission as a temporary resident.
The term for granting residency: Approximately 2 years.
The term for obtaining the identity card: 10 days after commencing the application process at the Immigration office, the applicant will be granted a provisional identity card (valid for 1-year, extendable for up to 1 additional year).
Once the definitive legal residency is approved, the provisional identity card will be replaced by a definitive one, valid for 3 years, extendable for the same term.
Documentation to be submitted
- Documentation used for entering Uruguay.
- Financial means to support stay in Uruguay.
- Birth certificate issued by the country where the applicant was completed and legalized by the Uruguayan Consulate in the mentioned country.
- Arrival date (landing card/stamped passport).
- An indication of the country of residence over the last 5 years.
- Health certificate issued in Uruguay –indicating ”Suitable for Residence”.
- Police background check issued by the applicant´s country of nationality and that where the applicant resided during the 5 years prior to arriving at Uruguay (if the two were different). The Uruguayan Consulate at the mentioned country will need to legalize these documents.
- Proof of applicant´s address in Uruguay.
One of the greatest traits of the increased globalization the world is seeing is that relocating and beginning operations elsewhere has become far more accessible than ever before in times past. If you are indeed interested in incorporating your company in Uruguay, Biz Latin Hub’s expertise would be more than useful in guiding you through this process, as well as that for gaining your residency.
The time is right – our accounting and legal team are at your disposal for any queries you might have via [email protected]