Uruguay offers Offshore Companies:

  • Known as Sociedades Anónimas, SAs, whose foreign assets, and income generated abroad, are untaxed

And it also offers Free Trade Zones:

  • Geographic areas in which companies have local operations, and are exempted them from all taxes, even import duties

Uruguay's Free Trade Zones

  • Free Trade Zones (FTZs) are specific geographic areas with a special regulatory status: Companies that operate within them face no taxation
  • Uruguay has a dozen FTZs to choose from, in different parts of the country (near airports, ports, inland, or in Montevideo's business district)

Are there any special requirements?

  • The only requirement that a FTZ user company has, is that 75% of its workforce must be Uruguayan nationals (although exceptions can be obtained, lowering the requirement)
  • The company's directors/principals do not need to be Uruguayan nationals

The Key Advantage of FTZs

  • When a company establishes itself in a FTZ, it faces no Uruguayan taxes, except social security taxes on its employees (like any employer).
  • Thus, the company will not pay:

    • Import taxes or duties
    • Corporate Income Tax (IRAE)
    • Dividends distribution tax
    • Net Worth Tax (IP)
    • Value Added Tax (VAT) on goods or services

Types of Possible Activities in FTZs

  • Companies established in a FTZ can engage in any type of commercial or industrial activity.
  • Thus, companies may:

    • Have logistics, merchandise handling and storage operations
    • Sell services, globally (including financial services, insurance and professional services)
    • Manufacture goods

Examples of Operations in FTZs

  • Some common uses of Uruguay's FTZs, and global companies that operate in the FTZs:

    • Financial services: Merrill Lynch, RBC, BBVA, Citigroup, Raymond James
    • Call Centers: Sabre, RCI
    • IT: Tata Consulting Services, Veriphone
    • Distribution: Epson, Ricoh, Lexmark, Sony, SKF

Setting up a FTZ Company

  • Simple, clear, process:

    • The Company chooses the FTZ which best fits its needs in terms of infrastructure, location, etc.
    • Incorporate a fully-owned local vehicle (SA or SRL) to operate as the FTZ user
    • Sign the user/lease agreement
    • Submit a memorandum explaining the company's intended activity and operations, which the Finance Ministry approves

The local vehicle

  • Companies may choose a shares corporation (SA) or an LLC (SRL)
  • SAs offer simplicity and flexibility:

    • Shares may be bearer or nominative
    • No minimum capital requirement
    • It does not require more than one director or shareholder
    • Directors may be non-Uruguayan
    • Presence of directors and shareholders is not required in Uruguay

Uruguay's Other Advantages: the Business Environment

  • Uruguay offers a business-friendly environment
  • Free inflow and outflow of capital and repatriation of profits
  • Open financial system, with no capital controls
  • Free exchange and use of foreign currency
  • Solid banking system

Our Services

  • Incorporating the Uruguayan FTZ vehicle
  • Providing the company's annual maintenance, tax and accounting services
  • Introducing to and advising on the different FTZs available in Uruguay
  • Legal services in general, including the set-up of the contract for FTZ user status, and drafting of the Memorandum submitted to the Ministry of Finance

Fischer & Schickendantz: Who We Are

  • Full-Service Law Firm

    • Clients: mostly foreign companies and individuals
  • Staff:

    • Bilingual
    • Attorneys, Accountants, Tax Advisors, Notaries
  • Services:

    • Legal advice
    • Legal Assistance in the Purchase Process
    • Tax, Accounting Services
    • Company Incorporation

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.