Benefits of Establishing a SAS in Uruguay
The SAS (Simplified Joint Stock Companies) in Uruguay represent an excellent alternative for both entrepreneurs and foreign investors who wish to establish their business in the country. This corporate form offers great flexibility, facilitating business start-up and development.
SAS combine aspects of simpler structures, such as sole proprietorships and limited liability companies, with more streamlined incorporation processes. In addition, they incorporate elements characteristic of corporations, such as independent legal personality, which ensures that the company’s assets are distinct from those of its owners.
Establishing a SAS in Uruguay implies a lower incorporation cost than that of a traditional corporation.
Among the additional benefits of SAS is the existence of specific procedures in public offices, which allow for electronic registration with government entities, considerably simplifying administrative processes.
The management and representation of the SAS are highly flexible, requiring only one Legal Representative as a minimum.
The meetings of the corporate bodies of the SAS do not need to comply with strict formalities, and may be held anywhere and by any means.
It is possible to incorporate a SAS with only one partner.
The purpose established in the bylaws of a SAS is broad, allowing any type of commercial or civil activity that is legal.
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What are the differences between an S.A.S., an S.A. and an S.R.L.?
Essentially, the S.A.S. is a mix between an S.A., an S.R.L. and a sole proprietorship, incorporating favorable aspects of each. For example, it offers Social Security benefits similar to a sole proprietorship, such as the right to FONASA for Directors, it has the same tax regime as an S.R.L., and has legal protection comparable to an S.A.
The cost to establish an S.A.S. is equal to that of an S.R.L., and about 50% less than that of an S.A. Transforms the concept of “Partner” into that of “Shareholder”. As in an S.A., the Shareholders, meeting in an Assembly, elect the representative of the company (e.g., the Director).
Unlike S.R.L.’s, but similar to S.A.’s, the shares of an S.A.S. can be transferred at any time. In addition, like S.A.’s and unlike S.R.L.’s, S.A.S.’s are not subject to the same rules. may be incorporated by a single person, who may be either the sole Shareholder or the Director.
In summary, since the implementation of Law 19.820, the legal form known as “Sociedad de Responsabilidad Limitada” (S.R.L.), although still in use, has become less relevant. In addition, choosing the structure of a Public Limited Company (S.A.) makes no practical or economic sense unless the activity to be developed legally requires this type of company.
What activities or businesses can be undertaken with an S.A.S.?
Law 19,820, specifically in Article 12, section “E”, establishes that the purpose of an S.A.S. may be “any commercial or civil activity, lawful”, which broadens its scope of action and avoids the exclusion of certain activities. This reduces the need for future amendments to the bylaws, saving the costs associated with such changes.
However, Article 8, paragraph 2 of the same law establishes limitations for the formation of an S.A.S. These restrictions include not being a company that offers its shares to the public, that has as a shareholder the State, a Departmental Government, Autonomous Entities, Decentralized Services or non-state public entities. Activities that by law require a specific social type are also excluded.
In short, it is not viable to opt for an S.A.S. if it is intended:
- Listing the company on the Stock Exchange.
- To be a state-owned company, either wholly or partially.
- To carry out “Financial Intermediation” or “Insurance” activities, since these require a specific type of company according to the law.
When is it appropriate to opt for an S.A.S.?
According to Article 8 of Law 19,820, the S.A.S. is defined as a type of commercial company, whose capital is represented in shares and whose shareholders do not assume liability for the debts of the company beyond their initial contribution.
The shareholders are not personally liable for the labor, tax or any other type of obligations incurred by the corporation, unless the legal personality of the corporation is declared unenforceable pursuant to Articles 189 to 191 of Law No. 16,060 of September 4, 1989. This means that the legal protection offered to the S.A.S. is similar to that of S.A.’s.
This model is especially recommended in situations where:
- We seek to incorporate a company.
- The company has both direct and indirect employees.
- A commercial activity is carried out that entails liability to third parties.
Requirements to incorporate an S.A.S.
- Natural person, over 18 years of age and not disqualified; or legal entity in good standing.
- To have the capital to integrate.
How long does it take to have an S.A.S. ready to operate?
There are three options available: to start an S.A.S. from scratch, to buy a pre-incorporated one, or to acquire one that is in the process of formation.
Starting an S.A.S. from scratch: Although the S.A.S. can start operating once it obtains its RUT, a procedure that takes approximately 15 to 20 business days from its inception, it will not be able to open a bank account until it finishes the entire process, which takes around 50 to 60 business days in total.
The advantages of this option include:
- The possibility to select your own denomination (company name), if available.
- Lower cost compared to acquiring a preconstituted one.
Purchase of a pre-incorporated company:
These are companies that have already completed their incorporation process. The transfer process is quick and simple, involving the sale of shares and the change of authorities, allowing to have total control of the S.A.S. in only 7 working days. The name of these companies is usually generic.
Acquisition of a company in formation:
These are companies in the process of formation that already have a RUT assigned and can start operating. Although their price is lower than that of a ready-made company, they cannot open a bank account until the incorporation process is completed. The handover process is similarly quick and easy, giving full control in approximately 10 business days. As in the previous case, the name of the S.A.S. is generic.
Is it possible to be a Shareholder or Director of an S.A.S. being a foreigner?
Yes, it is feasible. The shareholders of an S.A.S. may be individuals or entities, both domestic and foreign, and may reside inside or outside Uruguay. However, for non-resident foreign shareholders, a personal bank account in Uruguay is required. This is necessary both to contribute to the company’s subscribed capital and to receive dividends.
Some banks in Uruguay are facilitating the opening of personal accounts for non-residents, allowing the process to be initiated remotely, without the need to be physically present.
Regarding the position of Director, a non-resident may hold this position. However, it is important to bear in mind that its presence will be necessary in every instance where it must represent society. Alternatively, a General Power of Attorney may be granted to act on behalf of the company.
It is important to remember that the General Power of Attorney must be granted in the individual’s country of residence and apostilled. Subsequently, this document must be legalized in Uruguay.
What does Living in Uruguay offer?
Vivir en Uruguay has a team of expert professionals (such as lawyers, notaries and accountants) specialized in different areas, thus ensuring a comprehensive and adequate advice.
On the other hand, Vivir en Uruguay stands out in Business Management. Its focus goes beyond simply forming or selling a business partnership; it focuses on strengthening the relationship with the client. In this sense, they offer a comprehensive service for the formal management of your company, all in one place:
- Administration.
- Electronic Invoicing.
- Legal advice.
- Tax Advice.
- Management of Qualifications.
- Notarial Services.
- Support to Startups.
- Outsourcing.
Among other services.
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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
