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Uruguay

 
   

Executive Summary
Oriental Republic of Uruguay is located in South America, and borders to Brazil and Argentina. The population of the country exceeds 3,5 million people, of which a half lives in its capital Montevideo. The country covers approximately 176 sq km, being the second smallest country of the continent. Spanish is the national language.

Uruguay has one of the most developed and least corrupted economies of the region that is mainly based on agriculture; many goods are exported. IT and software development together with financial services are characteristic to the country as well. It is one of very few countries of the Americas in which same gender civil marriages are legal on the national level. More than 90% of the inhabitants are represented by European decent, and almost a half of Uruguay population follows the Catholic religion. The local Civil Law system is based on Spanish Civil Law.

The national currency is Uruguay peso.

Geography
The landscape is constituted mostly by plains with low hilly zones, coastline is developed for agricultural activities. Many rivers form a significant fluvial network with the main internal river – Rio Nero. There are various lagoons along the Atlantic coast.

La Sierra de las Animas is the highest point of the country reaching approximately 513 m above the sea level. Warm summers and cold winters are characteristic to Uruguay which has temperate climate. Strong winds are one of the reasons to the rapid changes of the weather.

Map, Flag and Coat of Arm

 


Types of Company

Uruguay is a jurisdiction which is not officially recognized as a tax heaven, but it offers many advantages to investors and entrepreneurs for conducting business activities both in offshore and onshore jurisdictions. The most popular companies SAFI’s have been abolished in 2007 and all the existent SAFIs should be re-registered as SAs till the end on 2010, but they will maintain the same privileges. Moreover, SAs have advantage over SAFI being able to conduct activities both onshore and offshore.

Uruguay offers an opportunity to register an offshore company in a Free Trade Zone which is exempt from all national taxes.
Company SA (Sociedad Anonima) can freely operate, benefiting from the offshore tax environment and having an opportunity to register bearer shares. The minimum share capital is US$ 2,500 or its equivalent in local pesos. A company should be domiciled in Uruguay and represented by a local agent. Such forms as Branch of a Foreign Company and Limited Liability Company as well as other company forms are possible to register within the jurisdiction.


Taxation
Uruguay has adopted a strict system of tax secrecy, and only assets located in Uruguay and income generated in Uruguay are taxed. The users of Free Trade Zone are exempted from all taxes with the exception of those who employ people in Uruguay that are liable to social security payments.

Personal
Income tax is 10 – 25%, asset tax is up to 2.75%, capital gains tax is 12%.

Corporate
Within four months from the end of the tax year the company should submit the financial statements to the General Tax Board for calculating the annual license fee; no particular controls nor audits are being processed for the companies registered in the Free Trade Zone. Uruguay is not a party to any Double Taxation Agreements. VAT is generally added at the rate of 22%, standard income and capital gain tax is 25%.

 
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