Think of Uruguay as your stable foundation for expanding across Latin America.
Uruguay is one of South America’s most stable and business-friendly economies. With a regional market of over 400 million people, Uruguay offers businesses unrestricted access to major Latin American economies. It boasts world-class infrastructure, cutting-edge telecommunications, and a thriving renewable energy sector—making it an attractive destination for long-term investment.
Beyond its economic advantages, the Legatum Prosperity Index consistently ranks Uruguay among Latin America’s ‘best places to live’. Its skilled workforce, high quality of life, and robust education system make it easier for businesses to attract and retain top talent.
Companies establishing operations in Uruguay have two main options:
- Registering a legal entity offers complete control but comes with administrative complexity.
- Using an Employer of Record (EOR) provides a faster, low-risk way to hire and operate without forming a local entity.
This guide walks you through both options—helping you decide the best path for your business.
Why Uruguay is a smart choice for your business registration
Uruguay has become the go-to destination for international businesses seeking stable and secure growth in Latin America.
Registering a business in Uruguay has numerous advantages:
- Access to a growing market: Uruguay’s economy has shown resilience and steady growth, making it an attractive destination for foreign investment.
- Favorable tax incentives: The Uruguayan government offers various tax incentives for foreign investors, including free trade zones and reduced tax rates for some industries. The Free Zone Law in Uruguay, passed in 1987, has been a key tool for attracting investments to the country.
- Skilled workforce: Uruguay has a well-educated workforce with a high literacy rate. Its numerous universities produce skilled graduates, especially in technology and engineering.
- Political stability and transparency: Uruguay is known for its democratic governance and low levels of corruption. This political stability fosters a safe environment for business operations and investment.
- Quality of life: The country offers a high quality of life, with excellent healthcare, education, and infrastructure. This can be a significant draw for expatriates and foreign employees.
These factors make Uruguay a compelling destination for business. But beyond choosing where to expand, companies must also decide on the best way to set up operations. Should you establish a legal entity, or is there a more flexible approach? In many cases, an EOR proves more cost-effective and less risky.
What is the difference between standard company registration and expanding to Uruguay through an EOR?
Entrepreneurs have two options for establishing a business in Uruguay: traditional company registration or partnering with an EOR.
Let’s explore the differences:
Aspect | Standard company registration | EOR |
Purpose | Establish a legal entity in Uruguay | Employ staff in Uruguay without a local entity |
Control | Full control over operations | Limited control, EOR manages employment |
Cost | Higher initial setup costs | Lower upfront costs, pay-per-employee model |
Compliance | Must meet all local Uruguayan labor laws and tax regulations | EOR handles compliance and legalities |
Setup time | Weeks to months | Quick setup, often within days |
Scalability | Limited by local regulations | Easily scalable, can hire quickly |
While company registration is essential for establishing a legal entity in Uruguay, an EOR is a practical, efficient, low-risk alternative for businesses that must swiftly hire and grow teams in Uruguay.
Exploring EOR as an efficient alternative to company registration in Uruguay
EORs offer several advantages over company registration in Uruguay:
- Streamlined hiring process: EORs help you with compliant contracts and faster onboarding so you can hire qualified employees without navigating the complexities of local labor laws.
- Compliance management: Reduce the risk of legal issues and penalties. EORs are experts in local regulations and ensure that your business complies with all employment laws, tax obligations, and reporting requirements.
- Administrative support: With an EOR, your business can focus on core operations rather than getting bogged down in paperwork. The EOR handles all administrative tasks related to employment, payroll, and benefits administration.
- Flexibility and scalability: An EOR lets your business scale operations up or down as needed. This is particularly beneficial for companies looking to test the market before making a long-term commitment.
If your company is confident about its long-term expansion in Uruguay, company registration can give you a high degree of control. We’ve broken down the process into simple steps.
A step-by-step guide to registering a company in Uruguay
Follow these eight steps to get started with company registration in Uruguay:
Step 1: Choose a business structure
The most common types of legal structures are Simplified Joint Stock Companies (S.A.S.), Stock Corporations (S.A.), and Limited Liability Companies (LLCs).
For individual businesses, sole proprietorships are an option as well.
- Simplified joint stock companies (S.A.S.):
- Ideal for small businesses.
- Flexibility in structure and administration.
- Fewer restrictions and formalities compared to stock corporations and LLCs.
- There are no maximum or minimum capital limitations.
- Stock Corporations (S.A.): According to the Investor’s Guide published by Uruguay XXI, in an S.A., capital is divided into shares and shareholders’ liability is limited to their investment.
- Shareholders have limited liability.
- Easier to attract investors.
- Shares can be transferred freely.
- More expensive and complex to set up.
- A minimum of two shareholders.
- There are no maximum or minimum capital limitations.
- Limited Liability Company (LLC):
- A popular choice for small and medium-sized businesses in Uruguay, an LLC offers limited liability to partners based on their capital contributions.
- Safeguards members’ personal assets.
- Requires less startup capital than a stock corporation (S.A.).
- Restrictions on transferring corporate shares.
- Limitations on increasing corporate capital.
- The minimum share capital is only $1.
- As per the Investor’s Guide published by Uruguay XXI, LLCs may have two to 50 partners, who may be legal entities, with no restrictions when it comes to nationality.
- Must have a registered office in Uruguay and hire a local registered agent.
- Sole proprietorship:
- Simplified process for starting and closing a business.
- Full control and personal management.
- Minimal legal restrictions.
- Freedom to choose your business focus.
- The owner is personally liable for all debts and obligations.
Less common business structures include general partnerships, limited partnerships, capital and industrial partnerships, and de facto partnerships. Additionally, businesses can operate as cooperatives, foreign branches, consortia, or economic interest groups (EIGs).
Step 2: Search and reserve a business name
It’s a good idea to start by searching and reserving your company name with the National Internal Audit Office (AIN), though this step isn’t mandatory. You can check up to three names, and once reserved, this name will remain valid for 60 days.
Step 3: Get your company bylaws approved by AIN
The next step is drafting your company bylaws. Once they’re ready, you’ll need to get them approved by the AIN.
Step 4: Register your bylaws
After AIN gives the green light, the next step is to officially register your business with the National Registry of Legal Entities – National Commerce Registry Section (Registro Nacional de Comercio or RNC).
Step 5: Publish an excerpt of your bylaws
To confirm your registration, you must get an excerpt of your bylaws published in The Official Gazette and another widely circulated newspaper.
Step 6: Get your tax identification number (RUT)
All businesses in Uruguay must obtain a RUT (Registro Único Tributario) from the National Tax Administration Office (Dirección General Impositiva or DGI). This number is essential for tax purposes and you must include it in all official documents.
Step 7: Register with state labor authorities
If your company plans to hire employees, you must register with the following entities:
- Ministry of Work and Social Security (MTSS)
- Social Security Authority (BPS, for its acronym in Spanish)
- State Insurance Bank (Banco de Seguros del Estado or BSE)
This step keeps you compliant with employment laws and social security regulations. However, if you’re looking for a faster, hassle-free solution, Multiplier can handle your hiring, payroll, and compliance—without company registration.
Step 8: Open a bank account
Once you have registered and received your RUT number, you must open a corporate bank account in Uruguay. This account must be in the company’s name. You will use it for all business transactions, including salary payments.
Even after registration, businesses operating in Uruguay should be mindful of local regulations and economic factors that impact cross-border payments and employee salaries. If you’re working with Multiplier, we help streamline international payroll, ensuring your employees in Uruguay are paid on time while complying with local banking, tax, and labor regulations.
Once you’ve completed these eight steps outlined above, your business will be fully set up and ready to operate in Uruguay. Since each business structure has different advantages and requirements, foreign entrepreneurs and companies must assess their needs, goals, and budgets before registering.
The real cost of registering a business in Uruguay
When planning to register a business in Uruguay, understanding the associated costs can help you effectively plan budgets.
Registration costs:
- Registration fee: $65 to register in the RNC, as per the Investor’s Guide published by Uruguay XXI, the agency responsible for promoting Uruguay globally
- Notary fees: 5% of the capital (minimum fee: $1,638.85 for any professional service), as per the Investor’s Guide published by Uruguay XXI, the agency responsible for promoting Uruguay globally.
- Publication of bylaws in Official Gazette: $315 (average price for standardized bylaws)
- Registration in MTSS, BSE, and BPS: Free
Annual maintenance costs:
- Taxes: The corporate income tax rate is 25%. Understanding your tax obligations is crucial for financial planning.
- Subsequent costs (including other costs like accounting, legal, etc.): Depends on the provider and the complexity of your needs, and can range between $1425 to $7,450.
*Note: Costs may vary from time to time. Please consult an expert on company registration in Uruguay. Our team can help with an up-to-date cost comparison for your business type.
An EOR like Multiplier can simplify your financial planning. It covers compliance, payroll, and administrative costs under one flat fee. It also helps you save more.
For example, many businesses have saved up to 70% of payroll costs with our EOR solution, making it far more cost-effective than local entity registration.
Cost breakdown: standard registration vs. EOR
Expense category | Standard Registration | EOR |
Setup costs | No setup cost | |
Compliance costs | High (legal, tax, accounting) | Included in EOR fee |
Payroll management | Requires dedicated team | Managed by EOR |
Annual maintenance | Fixed monthly fee | |
Scalability | Limited by legal setup | Immediate scalability |
This comparison illustrates how choosing an EOR like Multiplier can streamline your entry into the Uruguayan market, making it a more efficient and cost-effective option.
Streamline your expansion into Uruguay with Multiplier
Expanding your business to Uruguay doesn’t need to be complicated. Multiplier offers a comprehensive solution, simplifying everything from onboarding to managing your international workforce.
Here’s how Multiplier makes it easy to hire and grow teams in Uruguay
- Local hiring made easy: Multiplier helps you onboard new employees in minutes. Our simple platform manages everything in one place, including tracking employees, approving time-off, and handling expense requests across various countries and time zones.
- Simplified payroll: Forget the headaches of local payroll management. Multiplier’s automated payroll system takes care of taxes, benefits, and compensation across multiple countries. You get complete support from our Uruguay payroll experts who bring local expertise and multilingual capabilities.
- Comprehensive HR tools: With Multiplier’s global HR platform, you can easily track timesheets and team expenses.
- Stay compliant with ease: Our contracts are designed to meet all Uruguay laws, covering everything from statutory benefits and leave policies to working hours and salary details. Multiplier ensures compliance, reducing the risk of penalties and helping build your reputation as a reliable global employer.
- Tailored employee benefits: Multiplier offers local healthcare insurance through our Uruguay partners, which is in line with the country’s corporate and tax regulations.
Want to skip company registration and start your expansion into Uruguay today? Book a demo and our experts can help you make it happen.