When Do You Need a Legal Representative in Uruguay?

Countries in Latin America and in the rest of the world see Uruguay as an exemplary country in the region for business. Uruguay is socially, politically and economically stable with legal security and a good investment grade. Regardless of the type of legal entity you choose when incorporating your company, you will require a legal representative in Uruguay.

The role of the legal representative in Uruguay

Legal entities must appoint a legal representative to declare the company’s will. This is where the legal representative comes into play. The legal representative in Uruguay is the one who acts in front of third parties to express the company’s will and celebrate consequent legal deals. As a result, the company is bounded by the acts and contracts presented in these deals.

Therefore, the legal representative in Uruguay will assume commitments and make decisions attributed to the company.

A legal representative in Uruguay carries the following main responsibilities:

• Sign contracts
• Carry out procedures before public and/or private entities
• Represent the company in court, either as an actor or a defendant, duly assisted by a lawyer
• Perform administrative activities.

In summary, the legal representative has the broadest powers and responsibilities regarding the administration and representation of the company. This person must carry out all business, acts, and contracts that are aligned with the corporate purpose.

Which companies need a legal representative in Uruguay?

The three most common types of legal entities in Uruguay are: Sociedad Anónima (SA), Sociedad de Responsabilidad Limitada (SRL) and Sociedad Anónima por Acción Simplizadas (SAS).

The administrative structures of these three legal entities in Uruguay differ from each other. They vary in terms of the number of members and liability regimes, among other aspects. Despite this, each type of company requires a legal representative in Uruguay.

Legal representation for different types of corporate entities

Corporations (SA)

A President, Vice President, or two Directors acting jointly, or an Administrator can represent a corporation or Sociedad Anónima (SA). Therefore, a Director or an Administrator is required.

Limited liability companies (SRL)

A limited liability company (Sociedad de Responsabilidad Limitada, or SRL) must have at least 2 partners. One or both partners may represent the company and may appoint a trusted and unbiased third party to assume the role of a legal representative.

Simplified stock companies (SAS)

If the appointment of a Director or Administrator cannot be agreed upon, a legal representative can represent a simplified stock company (Sociedad por Acciones Simplificadas, or SAS). The legal representative may be appointed in the bylaws themselves or by a subsequent act. A SAS does not require an Administrator or Board of Directors, just a single representative.

Do branches of foreign companies need legal representation?

The legal representative is the person in charge of making legal and management decisions on behalf of a foreign parent company. If a foreign company decides to settle in Uruguay through a branch, Uruguayan law requires the company to designate a legal representative.

If you decide to hire a foreign legal representative, you must meet the requirements mentioned above.

Requirements to be a legal representative in Uruguay

  The requirements to be a legal representative in Uruguay are:

• Be of legal age
• Be a natural or foreign person
• Have the documentation that proves your designation as legal representative of a legal entity
• Once appointed, your designation must be reported to the Commercial Registry and to the Uruguayan tax and pension agencies (Directorate General of Taxation “DGI” and Social Security Bank “BPS”).

A foreigner can be designated as a legal representative according to Uruguay’s commercial law. There are no additional requirements to those already mentioned above.

Designation of the legal representative in Uruguay

If the company is local, the legal representative is appointed the moment the company is constituted. However, if the company is foreign, the investor grants a Power of Attorney to the legal representative so she/he may represent the investor.

This power must be legalized or apostilled at the Uruguayan Consulate of the investor’s country of origin and notarized by an Uruguayan Notary Public. If the power is extended in a foreign language, it must be translated by an Uruguayan Public Translator.

When selecting a legal representative, keep in mind the following key points:

• Have confidence in the credibility and reliability of your possible legal representative
• Partner with an acquaintance or associate of the company, or outsource the legal representation through an external legal expert
• Make sure that your legal representative has a clear understanding of what your company requires under Uruguayan law.

Brief overview of Uruguay’s economy

Standard & Poor’s (S&P) agency has ratified Uruguay’s sovereign credit rating as BBB. This places the country in good standing and with a stable outlook.

Uruguay’s rating is based on “its track-record of moderated and predictable economic policy implementation and well-established institutions, which has favored a consistent economic growth for over 15 years”. S&P’s report highlights Uruguay’s high GDP per capita of US$16,000 in 2019, “among the highest in Latin America.”

S&P confirms that Uruguay has “a strong democracy” that “sustains investor confidence in the country despite adverse economic and political events in neighboring Argentina and Brazil.” In the first half of 2019, Uruguay’s foreign direct investment (FDI) totaled US$377 billion.

Since 2015, the following sectors attract the greatest FDI, including but not limited to: forestry, agriculture, technology, wind power, and construction.

Entering a new market involves properly understanding the requirements and obligations that must be met for the success of the company.

Contact Biz Latin Hub to find a trusted legal representative in Uruguay

At Biz Latin Hub, we offer a complete set of multilingual market entry and back-office services, which we customize according to your specific business needs. Our local team in Uruguay has extensive knowledge and experience necessary to support your company in the determination and search for a legal representative in Uruguay.

Our experience in business formation, representation, accounting, and taxes, due diligence, contracting, and visa processing makes us a single point of contact for the expansion of your business in Uruguay.

For more information and personalized guidance, contact us today.

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