If you are interested in establishing a Limited Liability Company (LLC) in Uruguay, we offer you a detailed guide with the steps to follow and the advantages of this type of company.
Contáctanos para más información
Formation of an LLC in Uruguay: What is an LLC?
A Limited Liability Company (LLC) in Uruguay is defined as a legal entity designed mainly for small and medium-sized companies. This legal form is suitable for carrying out a wide range of commercial activities, except for those in the financial, brokerage and insurance operations.
To form an LLC, a minimum of two partners is required, with a maximum limit of fifty. In cases where the company is initially incorporated with only one partner, it is mandatory to incorporate a second partner within one year. In addition, if the number of partners exceeds the limit of fifty, the company must be transformed into a Sociedad Anónima (S.A.) within two years to avoid dissolution.
It is important to note that in an LLC in Uruguay, all partners must play an active role in the management of the company. However, their liability is limited to the amount of their capital contribution. In addition, the capital stock of the LLC may not be represented in the form of negotiable instruments, and any transfer of quotas to third parties requires the unanimous consent of all the partners.
There are no minimum or maximum share capital requirements to establish an LLC in Uruguay. The partners are free to decide the amount of the capital stock. At the time of incorporation, each partner must contribute at least 50% of its committed investment, and has a period of two years to complete the remaining contribution.
Process to Establish an LLC in Uruguay:
Specialized Legal and Financial Advice
- Seek specific legal and financial guidance in Uruguay.
- Familiarize yourself with the legal and financial regulations applicable to an LLC.
Trade Name Selection
- Choose a distinctive and appropriate name for your company.
- Make sure the name is in compliance with Uruguayan law.
Establishment of Initial Capital Stock
- Determines the initial capital stock of the company.
- Keep in mind that this capital may fluctuate due to factors such as inflation.
Elaboration of Constitutive Documents
- Draft a comprehensive articles of incorporation detailing the structure and operation of the LLC.
- It includes data on the partners, their obligations and their shares in the company.
Registration with the BPS and the DGI
- Registers the company with the Banco de Previsión Social (BPS) and the Dirección General Impositiva (DGI).
- Obtain a tax identification number (RUT) for the LLC.
Opening a Corporate Bank Account
- Open a bank account in the name of the LLC.
- Use this account for the financial operations of the business.
Appointment of a Legal Representative
- Appoint a legal representative who is a Uruguayan citizen or legal resident in the country.
- This representative will manage the affairs of the LLC before the authorities.
Registration with the Central Bank of Uruguay
- If the LLC is engaged in financial activities, register it with the Central Bank of Uruguay (BCU).
Acquisition of Local Permits
- Obtain the necessary municipal permits to operate in your geographic area.
Accounting Maintenance
- Maintain detailed and accurate accounting records.
- It declares the accounting books before the DGI.
Statement of Compliance
- It files a declaration of compliance with the National Registry of Commerce of Uruguay.
Benefits of Establishing an LLC in Uruguay:
Limited Liability: The partners protect their personal assets against business debts, limiting their liability to the capital contributed.
Operational Flexibility: LLCs offer adaptability in management and structure, facilitating customization according to business needs.
Reduced Incorporation Cost: The creation of an LLC is more economical compared to other corporate structures such as corporations (SA).
Simplified Requirements: SRLs have fewer legal and accounting requirements, favoring small and medium-sized companies.
Tax Benefits: Uruguay has an attractive tax system for companies, being especially advantageous for SRLs.
For the opening of an LLC in Uruguay, it is advisable to seek specialized advice to properly comply with all legal and accounting requirements. Our team of experts is ready to assist you in every step of the process of creating your company, offering you a tailored service focused on efficiency and cost savings.
Taxes determined for an LLC
A significant advantage of establishing a Limited Liability Company (LLC) in Uruguay is the tax exemption for income generated outside the country, which means that only income earned within Uruguay is taxed. In addition, LLCs are not required to submit their annual financial statements to the government, as they are not under the supervision of the National Internal Audit Office (AIN). It is relevant to note that foreign investors may have full control of an LLC in Uruguay.
For foreign partners of an LLC, there are no withholding taxes when remitting dividends abroad. However, there are certain taxes applicable on income generated within Uruguay, such as:
Tax on Income from Economic Activities (IRAE): A rate of 25% is applied on the annual taxable income.
Personal Income Tax (IRPF): This tax is levied on the distribution of profits to individuals at a rate of 7%.
Value Added Tax (VAT): It is levied on the sale of goods and services in Uruguay, at a rate of 22%.
Non-Resident Income Tax (IRNR): It is applied at the same rate as VAT, exclusively for non-residents.
Wealth Tax (IP): It is levied on the company’s own capital at a rate of 1.5% of the total annual capital.
Special social security contributions: These are calculated based on the maximum salary or remuneration paid by the company.
These tax provisions provide a favorable tax environment for LLCs, especially for foreign investors and operations beyond Uruguay’s borders.
Contáctanos para más información
We also recommend you to read:
