Legal vehicles

Foreign companies may develop activities in Uruguay by establishing a Permanent Establishment or may set up operations in Uruguay by adopting the structure of a local entity or a branch of a foreign enterprise.

  • Permanent Establishment (PE): a non-resident entity is deemed to have a taxable presence in Uruguay when carrying out all or part of the activities from a fixed place of business or through a dependent agent. The term Permanent Establishment especially includes buildings, constructions, installation projects, or the management activities associated to them, when they last more than three months. Its registration process before Tax Office is rather simple and can be done in a couple of days.

There are various types of companies in order to develop commercial activities, namely: corporations, limited liability companies, limited partnerships by shares, simplified join-stock companies, among others.

Shareholders, partners and managers of companies in Uruguay may be either Uruguayan or foreigners, resident or non-resident in the country.

  • Corporation: is the most commonly used type of legal entity by foreign companies.

Even when the Companies Act regulates the procedure to incorporate a new corporation, it is also possible and a common practice to acquire “off-the-shelf corporations” with no previous activity, which allows start operations almost immediately.

Corporations have no operating limitations whatsoever and the legal system is similar to that of capital stock companies found in foreign legislation.

Shares can be either nominative or bearer. In both cases, holders must identify themselves with the Central Bank of Uruguay (BCU), providing their identity and the percentage of their participation in the entity. Ultimate beneficial owner must be identified and communicated, as well as property chain (with some exceptions).

  • Branch: companies constituted abroad can perform operations in Uruguay by establishing a branch locally. The process is rather simple and can be done in a couple of weeks.

The foreign head office, whose net worth cannot be separated from that of the branch, is responsible (with no limit) for the obligations of the branch.

Branches must also comply with the obligation of identification of direct holders of their participations and their beneficial owners with the Central Bank of Uruguay.

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