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Starting a business in Uruguay means foreigners can own 100 percent of a local company with no resident partner, pay corporate tax only on Uruguayan-source income under a territorial system, and register quickly through digital government platforms. The standard corporate tax rate is 25 percent, foreign-source income is untaxed at the corporate level, and setting up a company can also open a path to residency.

Why Start a Business in Uruguay?

Uruguay pairs a stable, transparent economy with a territorial tax system and full foreign ownership, which makes it one of the most accessible bases for international business in Latin America. It offers political stability, strong rule of law, and preferential access to the MERCOSUR market of more than 270 million people, attractive to founders, remote workers, and investors alike.

The tax structure is the standout feature. Uruguay taxes companies only on income earned inside the country, so foreign-source revenue falls outside corporate tax entirely. On top of that, foreigners can own 100 percent of a company without a local partner, designated free zones offer full exemption from corporate income tax, VAT, and import duties, and investment-promotion laws add incentives in priority sectors such as technology, logistics, renewable energy, and agribusiness. For an entrepreneur building a regional or internationally facing company, that combination is hard to match nearby.

Who Can Register a Company in Uruguay?

Anyone can. Uruguay places no citizenship or residency requirement on shareholders or directors, so both foreign individuals and foreign companies can own 100 percent of a local business with no obligation to bring in a Uruguayan partner.

The one local requirement is a legal representative based in Uruguay, usually a lawyer or accountant, who handles dealings with the tax office and social security authority and keeps the company compliant. This representative does not control or own the business. Founders do not need to be in the country to incorporate; documents can be signed abroad and apostilled, and a power of attorney lets a local professional complete the process. Opening a corporate bank account, though, usually requires at least one in-person visit because of Uruguay's anti-money-laundering checks.

What Types of Companies Can You Form in Uruguay?

Uruguay offers several structures, but most foreign founders use one of three: the S.R.L., the S.A.S., or the S.A. Each carries the same 25 percent corporate tax on local income but differs in setup, flexibility, and ongoing obligations. A foreign company can also register a branch.

• S.R.L. (limited liability company). The most popular vehicle for small and medium businesses, with 2 to 50 partners, light compliance, and nominal minimum capital. All partners must contribute to social security even if inactive.
• S.A.S. (simplified stock company). A flexible, fast-to-form structure favored by startups and foreign entrepreneurs, allowing a single shareholder and independent legal status. It does not require publication of its bylaws.
• S.A. (corporation). Suited to larger enterprises that may issue shares, with at least two shareholders and minimum capital of around USD 2,500. It pays an annual corporate control tax (ICOSA).
• Branch office. An extension of a foreign parent, requiring no local capital, taxed at 25 percent on its Uruguayan income.

How Are Companies Taxed in Uruguay?

Uruguay taxes companies territorially, meaning corporate income tax applies only to income earned inside Uruguay. The corporate tax, IRAE, is 25 percent on Uruguayan-source profits, and foreign-source income is not taxed at the corporate level. This is the country's single biggest advantage for internationally oriented businesses.

Beyond IRAE, a company charges VAT at 22 percent on most local sales, with a reduced 10 percent rate on categories such as food, medicine, and health services, and zero rating on exports. When profits are distributed to shareholders, a tax of around 7 percent applies to the distribution. Corporations (S.A.) also pay an annual corporate control tax, ICOSA, of roughly USD 500. One point founders often miss: personal tax residency is separate from corporate tax, and Uruguay reformed its individual resident tax rules in 2026, so anyone planning to move to Uruguay and draw income personally should look at their own tax position, not just the company's.

What Are the Requirements to Open a Company?

Company formation in Uruguay is straightforward but involves a few mandatory steps: appointing a local legal representative, registering with the tax authority, and, if you hire, enrolling with social security. Each is required before the business can operate fully.

• Local legal representative. A representative resident in Uruguay who can sign documents and deal with tax, labor, and regulatory bodies on the company's behalf.
• Tax registration with the DGI. Registering with the Direccion General Impositiva produces the company's RUT (Registro Unico Tributario), the tax ID used for invoicing and filings.
• Social security registration with the BPS. Mandatory before hiring; the Banco de Prevision Social covers payroll, pensions, and health contributions.
• Optional corporate services support. Many foreign investors use a provider to handle registrations and supply a legal representative.

How Much Does It Cost to Open a Company in Uruguay?

Setup costs are moderate. The main one-time fees are company registration of around USD 65 with the National Registry of Commerce, notary fees of roughly 5 percent of capital with a minimum near USD 1,639, and publication of bylaws of about USD 315 for structures that require it. Registration with the labor ministry, social security (BPS), and the state insurance bank is free.

On the recurring side, the company pays 25 percent IRAE on local profits, and corporations also pay the ICOSA control tax of roughly USD 500 a year. Ongoing accounting, legal, and tax services typically run between about USD 1,425 and USD 7,450 a year depending on complexity. The S.A.S. does not require bylaws publication, which trims a little from the setup bill, while partners in an S.R.L. carry a social security contribution even when the company has no employees. These figures move, so a local estimate is worth getting before you commit.

How Do You Register a Company in Uruguay?

Registration follows a set sequence and, for the government steps, is fast thanks to the Empresa en el Dia (Company in One Day) system. The full process, including notarization and banking, usually takes a few weeks.

• Choose a structure. Select the S.R.L., S.A.S., S.A., or branch that fits your goals.
• Reserve a name. Optional but useful; approved names are held for a set period.
• Draft and approve bylaws. Prepare the company statutes and submit them for approval.
• Register with the National Commerce Registry. This gives the company full legal standing.
• Publish where required. S.A. and S.R.L. publish an excerpt of their bylaws; the S.A.S. does not.
• Obtain the RUT from the DGI. The tax ID needed to invoice, file, and operate.

Can a Business Lead to Residency in Uruguay?

Yes. Foreign entrepreneurs who set up and actively manage a business in Uruguay can use that economic activity to support a residency application, which over time leads to permanent residency and eventually citizenship. There is no separate entrepreneur visa; the business is treated as evidence of income and local ties within the standard residency process.

Because Uruguay grants residency relatively directly and does not demand large capital outlays, this route appeals to small and medium investors, not just large corporations. Pairing incorporation with a residency application also tends to smooth banking and day-to-day operations, since it strengthens the company's standing with local institutions. Anyone taking this path should plan the personal tax side alongside the corporate one, given Uruguay's 2026 changes to individual resident taxation.

Frequently Asked Questions

Can a Foreigner Own a Business in Uruguay?

Yes. Foreigners can fully own and operate a business in Uruguay with no local partner and no residency requirement. Uruguay treats residents and non-residents equally, so foreign entrepreneurs can hold 100 percent of company shares and keep full control over operations and profits. The only local element required is a legal representative who handles dealings with the authorities.

Can an American Open a Business in Uruguay?

Yes. American citizens can open and own a business in Uruguay on the same terms as locals, with no nationality-based restrictions. The process can be handled remotely through a local representative and a power of attorney. Many Americans choose Uruguay for its political stability, transparent legal system, territorial tax treatment, and access to MERCOSUR markets.

How Long Does It Take to Incorporate a Company in Uruguay?

The government registration itself is fast through the Empresa en el Dia system, but the full process typically takes a few weeks. The timeline depends on the structure chosen, the speed of notarization and document preparation, and opening a corporate bank account, which usually requires an in-person visit. Using a formation agent who handles banking can move things along.

How Are Companies Taxed in Uruguay?

Uruguay taxes companies territorially, so the 25 percent corporate tax (IRAE) applies only to Uruguayan-source income, and foreign-source income is untaxed at the corporate level. VAT is 22 percent on most local sales, distributed profits face a tax of around 7 percent, and corporations also pay an annual ICOSA control tax. This territorial model is Uruguay's main tax advantage for international businesses.

Can You Get Uruguay Residency by Starting a Business?

Yes. Actively running a Uruguayan business can support a residency application, especially when the business contributes to the local economy and creates employment. There is no dedicated entrepreneur visa, but owners apply through standard residency and use their economic activity as proof of income and local ties. This can lead to permanent residency and, in time, citizenship.

Do You Need a Bank Account in Uruguay to Register a Company?

No, you do not need a bank account to register the company, but you will need one soon after to operate, receive payments, and meet tax obligations. Opening a corporate account usually requires an in-person visit and compliance checks under Uruguay's anti-money-laundering rules, so it is best planned as part of the setup.

Do You Need to Be in Uruguay to Open a Company?

No. Company formation can be completed remotely. Documents can be signed abroad and apostilled, and a power of attorney lets a local professional handle the entire incorporation. The main exception is the corporate bank account, which often requires at least one in-person visit because of Uruguay's strict anti-money-laundering regulations.

What Is the RUT and Who Issues It?

The RUT (Registro Unico Tributario) is the company's unique tax identification number, issued by Uruguay's tax authority, the Direccion General Impositiva (DGI). It is required for issuing invoices, filing tax returns, and keeping financial records. Obtaining the RUT is one of the final steps of incorporation and is needed before the company can trade or open a bank account.

How Â鶹ԭ´´ Helps You Set Up in Uruguay

Â鶹ԭ´´ advisors guide foreign founders through the whole setup: choosing between an S.R.L., S.A.S., S.A., or free-zone entity, handling the DGI and BPS registrations, supplying a local legal representative, and aligning the company with a residency application where that fits the plan. The team's focus is on getting the structure right the first time, because switching later is costly. Victoria Cold, European Attorney at Â鶹ԭ´´, notes: "Founders often fixate on the 25 percent corporate rate and miss that Uruguay only taxes local income, so the real work is structuring the business and the owner's residency so the territorial system actually works for them. Get that pairing right and the rest is administration." That structuring is where a clean setup pays off for years.