How to open a corporation in Uruguay

A corporation is a type of business enterprise where the capital is divided into shares, represented by negotiable instruments, and the liability of the shareholders is restricted to the amount invested in shares. This form of partnership is ideal for businesses that require considerable capital investment.

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Benefits

The liability of the partners is limited to their capital contribution. They do not have to use their personal assets to cover company debts. In addition, they are exempt from liability in the activities, foundation and capital increase of the company.

Founders can start the company with only 50% of the share capital and must complete 100% in less than two years.

There are tax advantages in property transfer tax and stamp duty.

In open stock corporations, partners may sell their shares to other investors.

Members may be Uruguayan or foreigners, regardless of their place of residence.

Disadvantages

Starting a corporation in Uruguay implies a high cost, since a minimum capital of 18 million Uruguayan pesos is required for its formation.

This type of company also requires a greater amount of legal procedures for its incorporation, which usually makes it more suitable for large business projects.

Corporations require a more complex organizational structure, including the obligation to hold a shareholders’ meeting at least once a year.

Requirements

• Members must be 18 years of age or older.
• It is necessary to have an identity document recognized by the Uruguayan State, such as the Uruguayan identity card or a passport.
• There must be at least two shareholders.
• The capital stock must exceed 18 million Uruguayan pesos.
• The founding partners must contribute a minimum of 25% and a maximum of 50% of the capital stock, and this contribution must be made within the time established by the company in order to be able to exercise their rights and obligations as shareholder partners.

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Procedure to open an S.A. in Uruguay

1. In order to establish a corporation, certain necessary steps must be completed before a Notary Public:
2. Organize an initial meeting with the partners to determine key issues such as the name of the company, capital, management, partner contributions, and how profits will be distributed and losses will be handled.
3. Perform a legal analysis with the participation of a notary public, who must verify the authenticity of the information presented at the initial meeting.
4. Submit the company’s bylaws to the review of the Internal Audit of the Nation.
5. Register the company with the General Tax Directorate (DGI) and the Social Security Bank (BPS).
6. Take out occupational accident insurance with the Banco de Seguros del Estado (BSE) for the company’s employees.
7. Register the company with the Document Division of the General Labor Inspectorate, which is part of the Ministry of Labor and Social Security.
8. Register the corporation in the Public Registry of Commerce.
9. To publish a notice in the Official Gazette and in another newspaper of wide national circulation.

We also recommend you to read:

• Types of companies in Uruguay
• Management of formalities in Uruguay
• Investing in Uruguay
• Personnel Relocation
• Migrating to Uruguay
• Opening of SRL in Uruguay
• Opening of a sole proprietorship in Uruguay