How to register a sole proprietorship in Uruguay

The sole proprietorship is the fastest and cheapest way to start invoicing in Uruguay. No minimum capital, registered with both BPS and DGI, and depending on how much you invoice you fall into one of three different tax regimes. Here is how to open one, what documents are required and which regime applies to you.

Verified against the official procedures on gub.uy and BPS. Thresholds and values are updated periodically: confirm on the official page before registering.

What a sole proprietorship is

It is a natural person carrying out a commercial activity in their own name. The defining feature shapes everything else: it has no legal personality separate from its owner. That means you are liable with your personal assets for the business’s debts — there is no separation between your money and the business’s.

In exchange for that risk you gain speed and low cost: quick setup, cheap registration, no minimum capital and no restrictions on activity. That is why it is the vehicle most entrepreneurs and independent professionals start with.

Ownership cannot be transferred. If you want to sell the business, you do not sell the sole proprietorship: you close yours and the buyer opens theirs.

The three regimes: which one applies

You do not choose freely. The regime depends on how much you invoice and on the activity.

Monotributo

The simplest. A single contribution replacing taxes and social security payments. The ceiling: income from the activity cannot exceed 183,000 Indexed Units (UI) in the financial year, equivalent to 60% of the Literal E limit.

Literal E

For those above the monotributo ceiling but still small. A simplified regime with DGI involving a fixed monthly minimum VAT payment and no IRAE settlement.

General regime

For those above Literal E. Here you settle VAT and IRAE with formal accounting, and an accountant becomes a genuine necessity.

The administrative burden differs enormously between the three, so it is worth projecting your expected turnover before registering rather than after.

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Documents required

Two photocopies of the owner’s identity document.
A recent bill — no more than 60 days old — from a utility (UTE, ANTEL, OSE) or a private company, evidencing the tax address where the activity is carried out, with 2 photocopies.

If you register through the online services, the information is completed on the web and no physical documentation needs to be submitted.

When you have to register

This point causes avoidable fines. Registration is done within the current month in which the activity starts. If the start date falls in the following month, you can register from 10 days earlier, starting on the 25th of the current month.

Step by step

Define the activity start date and the tax address.
Gather the identity document and the utility bill for the address.
Register with BPS and DGI — it is a joint procedure.
Determine the tax regime based on projected turnover.
Where applicable, also register with the MTSS.

If you are a foreign national

To open a sole proprietorship you need your Uruguayan identity document. So the prior step is the identity card for foreigners, which in turn requires having started your legal residency.

One useful point if you are thinking long term: the sole proprietorship certificate issued by the BPS counts as proof of means of living in the Uruguayan citizenship application.

When another structure makes more sense

The sole proprietorship stops being a good idea when asset risk outweighs simplicity. If you are going to take on debt, hire staff at volume or bring in partners, look at the alternatives — all with limited liability. A general comparison in types of companies in Uruguay.