Foreign investment and domestic investment have the same legal status and, as a consequence, no special legislation is necessary. Foreign investment is thus regulated by the general legal framework.
2. Forms of business for foreign investment
Uruguayan law guarantees equal treatment to all investors. Thus, foreign investors may use any type
of business entity available to Uruguayan nationals (see section 2.) and any type of private legal acts.
In most cases, Uruguayan law will recognize the foreign legal entity incorporated in accordance with
the law of its place of incorporation.
A foreign company may perform “isolated acts” in Uruguay without business registration. Foreign
companies are subject to the laws of the place in which they are incorporated and which govern
their incorporation, functioning and dissolution, provided that these are not contrary to public
international law.
Companies duly established abroad are recognized in Uruguay, subject to certification on their
incorporation. However, if they wish to undertake activities within Uruguay on a regular basis, they
must set up a branch in the country or any type of permanent representation, and they must
register with the Registry of Commerce.
A branch is required to have a separate set of accounting books and will be considered a separate
entity from the head office for tax purposes. However, some transactions between head office and
branch, e.g. loans, will generally be disregarded.
When setting up a subsidiary, companies must fulfil simple requirements irrespective of their
business form (SA or SRL).
It is possible to acquire shares of an existing company (SA) that has not engaged in any prior activity
and which has already been registered with the RNC (Public Registry of Commerce ) and approved by
the relevant state entity (AIN (National Audit Office)). Upon appointment of directors, it must be
registered with the DGI (Tax authority), the social security bank (BPS) and the MTSS. The acquisition
of existing companies is common due to the long time it takes to incorporate a new company (e.g. 5
to 6 months). During the incorporation process, the company can function as “in formation”, but the
shareholders have unlimited liability to the company and third parties. However, a fast procedure
named “company in a day” (empresa en el día) was implemented to facilitate the incorporation of
new companies. The companies incorporated under this programme have pre-approved names and
bylaws, and may only issue bearer shares.
The incorporation of a limited liability company (SRL) requires the execution of an agreement before
a public notary with the presence of at least two members. It must comply with the same
registration requirements as other companies, except that approval of a state entity is not required.
Uruguay imposes no restrictions and requires no prior authorization for capital repatriation or dividend payments. The free transfer of capital abroad is specifically addressed by article 5 of Law 16,906 (law on the promotion and protection of investments in the national territory), which provides that the free transfer of profits, capital and any other amounts related to a foreign investment is guaranteed by the state. The transfer is made in freely convertible currency.
