Location
The República Oriental del Uruguay is located in the southeastern region of South America, bordered to the north by Brazil, to the west by Argentina, to the east by the Atlantic Ocean, and to the south by the Rio de la Plata. With an area of 176,215 square kilometers (68,037 square miles), Uruguay is the second smallest country in South America. Its geography is characterized by a vast rolling plain and an Atlantic coastline of over 600 kilometers (373 miles).

Population
Uruguay is one of the least populated countries in South America, with an estimated population of 3,550,000 people according to the Instituto Nacional de Estadística ("INE") at the end of 2023. The gender distribution is approximately 51 percent female and 49 percent male. The population is highly concentrated in the capital, Montevideo, where almost half of Uruguayans live.

Climate and Ecosystems
Uruguay has a temperate climate, with well-defined seasons. Average temperatures range from 17°C (63°F) in winter to 28°C (82°F) in summer. Uruguay's landscapes include grasslands, coastlines with white sandy beaches, wetlands, and small hills, making it a country with rich biodiversity, especially in the wetlands region.

Infrastructure
Uruguay has a solid road infrastructure and a railway network undergoing modernization. The country has invested significantly in infrastructure projects, including roads and bridges. Projects such as the Ferrocarril Central (Central Railway), which aims to connect ports with the country's productive areas, stand out. In addition, Uruguay is a leader in the implementation of fiber optic technology, covering most of the national territory.

Ports and Waterways
The ports of Montevideo and Nueva Palmira are the main maritime gateways. The Port of Montevideo is an important transshipment point in Mercosur, facilitating regional and international trade. The authorities have implemented a free port regime that attracts foreign investment and international logistics operations.

Airports
Carrasco International Airport, located near Montevideo, is Uruguay's main airport, offering direct flights to the Americas and Europe. Other major airports include Punta del Este International Airport and Laguna del Sauce International Airport, which cater mainly to tourism.

Political and Social Stability
Uruguay is recognized for its political and social stability in Latin America. It has maintained a solid democratic system with strong institutions and consistent respect for the rule of law. This has created an environment conducive to foreign investment and economic development.

Business Facilities
Uruguay offers a business-friendly environment, with tax incentives, investment protection, and a transparent legal framework. The country has signed numerous free trade and investment agreements that facilitate access to international markets.

Water and Sanitation
Uruguay has one of the highest levels of access to safe drinking water and sanitation in Latin America, with almost universal coverage in urban areas. The government continues to invest in infrastructure to improve water supply and treatment in rural areas.

Electricity
Uruguay is recognized for its advanced energy matrix, which is 98% composed of renewable sources. Wind and solar energy, together with hydroelectric power, have transformed Uruguay into a model of energy sustainability, making it a leader in the region.

Tourism
Uruguay is a popular tourist destination, with more than 3 million visitors a year, mainly from Argentina and Brazil. Major attractions include the beaches of Punta del Este, the historical heritage of Colonia del Sacramento, and the vibrant cultural life of Montevideo. In 2023, tourism showed a strong rebound with a 150% increase compared to previous years, driven by internationally renowned cultural and sporting events.

Diversified Economy
Uruguay's economy is diverse, with important sectors such as agriculture, livestock, information and communications technology ("ICT"), renewable energy, and financial services. Uruguay is one of the world's largest exporters of meat and soybeans, and its agricultural sector is highly productive and technologically advanced.

Innovation and Technology
Uruguay has experienced significant growth in the technology sector, with a vibrant startup ecosystem and advanced technological infrastructure. Montevideo is considered a technology hub in the region, and the country is known for its digital education, with the Plan Ceibal Program, which provides laptops and internet access to students across the country.

Quality of Life
Uruguay stands out for its high quality of life, with a robust health system, a quality education system and a low crime rate compared to other countries in the region. Montevideo has been ranked as one of the best cities to live in Latin America.

Commitment to the Environment
Uruguay has adopted progressive environmental policies and is among the world leaders in renewable energy, as mentioned above. The country has implemented programs to protect natural areas and biodiversity and is committed to further reducing its carbon footprint.

Social Policies and Human Rights
Uruguay is known for its advanced social policies and its focus on human rights. It has been a pioneer in legalizing equal marriage, and abortion, regulating cannabis and defending the rights of LGBTQ+ people. It also focuses on social inclusion policies and poverty reduction.

Strategic Location
Situated between Argentina and Brazil, Uruguay has a strategic geographical location that makes it an excellent entry point for Mercosur. Its ports and free trade zones position it as a logistical hub for trade in the region.

Education and Literacy
Uruguay has one of the highest literacy rates in Latin America and offers free, quality education from primary through university. This has resulted in a highly educated population prepared for the global labor market.

Uruguay provides different alternatives to establishing a business in the country, when referring to companies, these are mainly regulated under Laws No. 16,060 (“Commercial Companies Law”) and No. 19,820 (“Entrepreneur Development Law”).

In order to accomplish the aforementioned, two paths may be followed: (a) the incorporation of a subsidiary or (b) the establishment of a branch of a foreign company.

Notwithstanding the different possibilities to establish a business in Uruguay, the main legal entities under Uruguayan regulations used for this purpose are the corporation, the simplified joint stock company, the limited liability company and the branch of a foreign company, whose main characteristics are developed below:

Corporation (S.A., for its acronym in Spanish):

• Characteristics
  Corporations were traditionally the most common type of entities incorporated in Uruguay, being regulated under the Commercial Companies Law. The main difference between Corporations and the rest of the companies included on the Commercial Companies Law is that shareholders of a corporation are only liable up to the amounts contributed to the company.
  
  As general characteristics, Corporations should be initially constituted by two or more people without limitation (the shareholders). However, in opposition to the other companies types regulated under the Commercial Companies Law, throughout its life, the Corporation, may have only one shareholder. The capital of a Corporation is divided into shares that are, in principle, freely negotiable. The transfer of the shares may be done by endorsement, by transfer of non-endorsable shares, or by simple delivery of the share certificate(s), depending on the type of shares the corporation has as indicated in the Bylaws. Shares in a Corporation may be: (i) bearer, (ii) registered (endorsable or not), or (iii) book-entry. Shares must be issued with equal value and indivisible, and each share is entitled to one vote. Different series of shares may be issued, as well as different classes (e.g. ordinary and preferred).
  
  The administration of a Corporation will be entrusted to an administrator, or a Board of Directors composed of one or more people, as established in the Bylaws. The board of directors’ members may be Uruguayan nationals or foreigners, individuals or legal entities, Uruguayan residents or not. The representation of the company will also be as indicated in the Bylaws.
  
  Additional specifications or restrictions will depend on the type of activities carried out by the Corporation.
• Incorporation
  There are two ways of acquiring a Corporation: a) To incorporate a Corporation, and b) to acquire an “off-the-shelf” corporation:
  • Incorporation Process
    In order to incorporate a corporation under Uruguayan regulations the following steps are required or should be completed: (i) two or more people should meet in order to grant the corporation’s bylaws (containing, inter alia, the name, purpose, capital and term of duration of the legal entity, among other specifications); (ii) payment of the initial paid-in capital should be made. At least 25% of corporate capital stated in the bylaws must be paid in at the incorporation by the shareholders, subscribing up to - at least - 50% of the corporate capital; (iii) the bylaws should be approved by the Corporations Superintendency (“AIN” for its acronym in Spanish); (iv) registration before the National Commerce Registry of the bylaws; (v) publication on the Official Gazette and another newspaper of an excerpt of the company's relevant extracts from the bylaws. This process may take up to four months approximately; (vi) registration of the corporate books before the National Commerce Registry.
  • “Off-the-shelf” Acquisition
    The most common process to incorporate a corporation in Uruguay is directly acquiring an off-the-shelf corporation from a legal or accounting firm specialized in the constitution and sale of this type of entity. The entity sold by these firms is a corporation duly incorporated under Uruguayan laws with no prior activity. In opposition to the traditional incorporation process, the time frame for acquiring this company is approximately thirty days. As an advantage to the incorporation process only one shareholder is needed to acquire the corporation and it will obtain all the corresponding documents of the corporation in order for it to start its activity right away.
    
    Additional aspects should be taken into consideration when incorporating or acquiring an off-the-shelf corporation such as obtaining Tax ID; filing before the Central Bank of Uruguay a sworn statement communicating its shareholders and final beneficiaries according to 18.930 and 19.484 regulations; and the issuance of the corresponding share certificates.

Simplified Joint Stock Company (S.A.S., for its acronym in Spanish):

• Characteristics
  This type of entity was introduced by the Entrepreneur Development Law, and it has become the most common type of legal entity incorporated in Uruguay due to the simplicity of its incorporation and the low costs compared to Corporations.
  
  The Simplified Joint Stock Companies were created under the Entrepreneur Development Law as entities with strong private autonomy in terms of their regulation, in opposition to entities regulated under the Commercial Companies Law.
  
  As general characteristics, Simplified Joint Stock Companies may be incorporated by one or more people without limitation (the shareholders). Its capital is divided into shares that are freely negotiable by endorsement unless provided otherwise. The bylaws can provide for restrictions on the transfer of shares (and it can even be agreed to ban the transfers of shares altogether for up to ten years). The transfer of shares may be by endorsement or by transfer of non-endorsable shares, depending on the type of shares established in the Bylaws. Shares may be: (i) registered (endorsable or not), or (ii) book-entry. They must be issued with equal value and indivisible. Unlike in corporations, multiple vote shares are admitted. Different series of shares and share certificates of one or more shares may be issued, as well as different classes (e.g. ordinary and preferred). Each class may have different voting rights. As a general rule, shareholders are only liable for the amounts contributed to the company.
  
  The company's legal representation will be entrusted to one or more individuals or legal entities, appointed as set forth under the bylaws. The administrator or board members may be Uruguayan nationals or foreigners, individuals or legal entities, Uruguayan residents or not. Resolutions of the administration body may validly be adopted with the written consent of its members stating their vote if the bylaws so set forth. Consent may be reported by electronic means without the need for authentication.
  
  Simplified Joint Stock Companies can perform any legal civil or commercial activity and unlike Corporations, its purpose should not be specific to the activities to be carried out. However, there are some restrictions to the Simplified Joint Stock Companies, for example, in opposition to Corporations, a Simplified Joint Stock Company cannot make a public offer of its shares. Furthermore, a company in which the Government or a non-governmental public person is a shareholder, directly or indirectly, can’t adopt this legal form.
• Incorporation
  The incorporation of a Simplified Joint Stock Companies in Uruguay is much simpler than the process described for a corporation, and there are different ways to do so:
  • Personal Submission of the Documentation
    The process may be accomplished by the subscription of the articles of incorporation by the shareholder(s), which should be granted in writing, either on public or private documents. The articles of incorporation must be registered before the National Commerce Registry within thirty days of its granting. Upon incorporation, the capital stock must be fully subscribed or paid in. In the same act, a minimum of 10% of the capital stock must be contributed if the contribution is made with available funds (money), or 100% if the contribution is made in kind. In no case shall the term for the total integration of the corporate capital exceed twenty-four months.
  • Online Presentation
    The Simplified Joint Stock Company can be constituted on the day, as long as the shareholder has a Uruguayan identity card. These Simplified Joint Stock Companies have standard bylaws made by the National Commerce Registry with minimum basic regulations for its incorporation, therefore it may be necessary to amend the bylaw once it is incorporated in order to have tailor-made stipulations. For completing the online process, the shareholder should have a gub.uy account as the process is completed through that account. This option also gives the shareholder the possibility to sign online the bylaws, which would need an ID reader as well as a digital signature issued by a certified provider.
  • “Off-the-shelf” Acquisition
    As well as for Corporations, it is possible for someone to acquire an off-the-shelf Simplified Joint Stock Company from a legal or accounting firm specialized in the constitution and sale of this type of entity. The entity sold by these firms is a Simplified Joint Stock Company duly incorporated under Uruguayan laws with no prior activity.
    
    As well as with Corporations, Simplified Joint Stock Companies shall obtain the Tax ID; file before the Central Bank of Uruguay a sworn statement communicating its shareholders and final beneficiaries according to 19.484 regulations; and register the corporate books before the National Commerce Registry as well as issuing the corresponding share certificates.

Limited Liability Companies (S.R.L., for its acronym in Spanish):

• Characteristics
  Although Simplified Joint Stock Companies have taken away some of their popularity, Limited Liability Companies are still common.
  
  Limited Liability Companies should be initially constituted by two or more people up to a maximum of fifty (partners or quota holders). If there are more than fifty quota holders the entity should turn into a corporation.
  
  The capital shall be divided into equal, cumulative and indivisible quotas, which cannot be represented by negotiable instruments (such as share certificates). Each quota equals one vote. The legal regime of majorities in the Partners' Meeting varies according to the number of partners, and the importance of the decision to be made.
  
  This type of entity has a personal compound, therefore, unlike capital entities such as Corporations and Simplified Joint Stock Companies, in Limited Liability Companies the partners figure is important and so the quota transfer is more regulated. In that sense, the transfer of quotas between partners is in principle free, unless the regime of majorities is modified, or when the quotas are related to accessory payments. The assignment of quotas to third parties requires, in all cases, the consent of the other partners (according to the applicable majority regime), following a legally established procedure. The death or incapacity of a partner, unless otherwise agreed in the Social Contract, shall activate the mechanism of assignment of quotas to third parties with respect to the quotas of the dead or incapacitated partner.
  
  In this type of entity, partners are only liable for the amounts contributed to the company, with the following exceptions: labor debts of a salary nature; taxation obligations; and the responsibility for the capital contributions which will last for the two-year term the partners of the Limited Liability Company have to make the subscribed capital contribution.
  
  The administration and representation of the company may be carried out by a partner or any other person which will be designated in the Social Contract, or by a separate instrument that must be registered before the National Commerce Registry.
  
  There are certain restrictions as to the activities that may be carried out by a Limited Liability Company, for example, the Commercial Companies Law stipulates that a Limited Liability Company may not carry out financial intermediation or insurance activities.

• Incorporation
  Limited Liability Companies have an easier and shorter incorporation process than corporations. (i) Partners (with the limitations indicated above), should celebrate a social contract, stipulating the precise identification of the parties to the agreement, the type of company adopted, the name, the registered office, the object or activity which it is proposed to be carried out, the capital, the contributions, the form in which profits are to be distributed and losses borne, the administration and the term of the administration and the term of the company. Additionally for Limited Liability Companies, the social contract should include, the number and value of the quotas and how many correspond to each partner, the value assigned to the contributions in kind (if any) together with the mention of the background justifying the valuation. (ii) The Social Contract must be filed before the National Commerce Registry. (iii) Once the document is registered a publication on the Official Gazette and another newspaper of the company's domicile of an excerpt of the company's relevant extracts from the Social Contract must be made in order to complete the process.
  
  As well as with Corporations and Simplified Joint Stock Companies, Limited Liability Companies shall obtain the Tax ID; and, in case the partners are legal entities, file before the Central Bank of Uruguay a sworn statement communicating its shareholders and final beneficiaries according to 19.484 regulations.

Incorporation of a Branch of a Foreign Corporation:

• Characteristics
  According to the Commercial Companies Law, the companies duly incorporated abroad will be fully recognized in the country, prior to verification of their existence. With such recognition, they will be able to celebrate isolated acts and be on trial. If they intend to carry out the acts included in their corporate purpose, it is needed to establish a branch or any other type of permanent representation. A branch may perform every activity the foreign entity has established in its contract purpose.
  
  Companies that establish branches or any other type of permanent representation must keep separate accounts and balance sheets which should be prepared in Spanish and submitted to the corresponding administrative controls. The administrators or representatives of such companies shall incur the same liabilities as the administrators of companies incorporated in Uruguay, according to the type. When a branch of a foreign company with an unknown entity type is established in Uruguay, the Commercial Companies Law indicates that it will be governed by the rules for Corporations.
  
  The foregoing is without prejudice to what is established in any treaty the country of the foreign company may have with Uruguay on the matter.

• Incorporation
  Assuming the foreign company which branch will be set up in Uruguay does not have any restrictions, the branch shall be incorporated by submitting: (i) a certified copy of the articles of incorporation/Bylaws of the foreign company, its amendments, and related documentation certifying that the company has been legally incorporated and is in good standing in the country of its incorporation; (ii) a resolution passed by the competent body of the foreign company resolving to set up a branch in Uruguay, to allocate its capital, to establish a domicile in Uruguay and denomination with the addition of “Sucursal Uruguay” to its original name, and to appoint a person(s) who will manage and represent the company’s branch in Uruguay, including his/her personal information (that is: name, identification document or passport and marital status (should the person be married, it should be indicated to whom this person is married to and how many times this person has been married before, if that is the case)). In addition, a power of attorney for representation and administration of the branch in Uruguay shall be granted to said person. The representative(s) should be communicated to the local authorities (tax and social security) and to the National Commerce Registry.
  
  All documentation coming from abroad (including the powers of attorney referred to above) must be certified by a public notary (or whoever acts in his place in the country of the foreign company’s incorporation), and apostilled or duly legalized before the nearest Uruguayan consulate in the place where they are issued if the respective country is not a party to the Apostille Convention. In case the referred documents are not in Spanish, they must be translated into Spanish by a Uruguayan Public Translator. Once the documents are filed before the National Commerce Registry, an excerpt thereof must be published in the Official Gazette and another local newspaper.

Economic Activities Income Tax (hereinafter referred to as “IRAE”)
The IRAE taxes, at an annual rate of 25%, the tax-adjusted net income of Uruguayan sources, derived from economic activities of any nature. Income from “Uruguayan sources” is understood as income resulting from activities carried out, assets located in, or rights economically used in Uruguay.

To establish net income, expenses accrued in the year necessary to obtain and retain the duly documented taxable income shall be deducted from gross income. Only those expenses that constitute income for the counterparty taxed by IRAE, IRPF, IRNR or by an effective tax on income abroad may be deducted.

In November 2022, Law No. 20,095 was passed, whereby amendments were introduced in the IRAE. With these amendments, as of 2023 IRAE tax the following income obtained abroad by entities members of a Multinational Group:

• Income derived from intellectual property rights in patents and software, in the part that does not correspond to “qualified income”, and
• Other passive income, such as real estate capital returns, dividends, interest, and royalties, among others; as long as the entity is considered “unqualified”.

Personal Income Tax (hereinafter “IRPF”)
This Tax is applicable to Uruguayan incomes obtained by individuals derived from activities developed, assets located or rights economically used in the Uruguayan territory. These incomes include those derived from personal services rendering independent or non-dependent relationships.

The tax is applied under a dual system that differentiates between income derived from the capital productive factor (generally taxed at rates of 7% and 12%, lower rates apply in specific cases) and income derived from the labor productive factor (taxed at progressive rates of up to 36%).

Non-Residents Income Tax (hereinafter “IRNR”)
Income taxed by IRNR are those derived from activities carried out, assets located or rights economically used in Uruguayan territory.

IRNR taxpayers are non-resident individuals or legal entities not acting in Uruguay through a permanent establishment. To be included in the definition of non-resident, none of the following hypotheses (definition of residence) should be met:

• That the person stays more than 183 days during a calendar year, in Uruguayan territory. Sporadic absences will be considered unless the person justifies having a tax residence in another country.
• That the economic activities or individual interests of the person are located in Uruguay, in a direct or indirect way.

It is presumed that the individual has a residence in our country if their spouse and minor dependent children have permanent residence in Uruguay.

The general IRNR rate is 12%, but for dividends or profits paid by the IRAE taxpayers, it is 7%.

Wealth Tax (hereinafter “IP”)
IP is an annual tax levied on goods and rights located, placed or economically used in the country.

When assets exist abroad, liabilities are only computed by the amount that exceeds the value of those assets. Exempt assets and duties shall be counted only for the purpose of deducting them from the deductible liability.

The taxable amount is determined by the difference between taxed assets and deductible liabilities (commercial debts only, tax debts, except property tax), and the rate is:

• 2.8% for banks.
• 1.50% for the rest of the legal entities.
• 3% for entities residing, domiciled, incorporated, or located in countries or jurisdictions with low or no taxation or that benefit from a special regime of low or no taxation.

Value Added Tax (hereinafter “VAT”)
This tax is applicable to transactions for valuable consideration consisting of the internal circulation of assets, the rendering of services within the national territory, the introduction of assets to the country and the aggregation of value on real estate under management by non-IRAE taxpayers at the base rate of 22%.

The assets that make up the basic household basket and certain services such as health services will be taxed at the minimum rate of 10%.

VAT operates according to the tax-against-tax scheme, so the tax payable will be the difference between the VAT defined in the previous paragraph and the VAT included in the purchases of assets and services.

The export of goods and certain services is not subject to this tax and generates credit for the VAT included in purchases of assets and services directly related to the export.

Corporations Control Tax (hereinafter “ICOSA”)

• The ICOSA taxes corporations upon incorporation and at the close of each fiscal year. This includes those corporations that, having been incorporated abroad, have relocated to Uruguay.
• The rate is 1.50% for the incorporation of the company and 0.75% for each year-end and is applied on a tax base of 578,428 UI (five hundred seventy-eight thousand four hundred twenty-eight indexed units, approximately USD 86,000).
• For such purposes, the price of the indexed unit on December 31 of the year preceding the occurrence of the triggering event shall be taken into account.
• This tax may be charged to the Wealth Tax for the period, but if a surplus arises by such concept, it shall not entitle to refund.
• Those companies whose assets allocated to agricultural exploitation exceed 50% of the total tax assets, having the exclusive purpose of administering pension savings funds, users of free trade zones and investment financial corporations shall be exempt from this tax.

Specific Internal Tax (hereinafter “IMESI”)

• The IMESI is levied on the first sale by producers and importers of certain products (cigarettes, alcoholic beverages, cosmetics, etc.) in the local market. Exports are not taxed. The rate varies for each taxed item and is generally set by the Executive Power, within parameters established by law.

General Labor Aaspects
In Uruguay, there is no specific employment contract law or labor code. Moreover, the rules governing employment are fragmentary and scattered across various texts of different hierarchies. Thus, there are norms of constitutional rank, others of legal origin, provisions issued by decrees of the Executive Branch, and finally, rules of conventional origin.

However, the autonomous regulation reached by the parties is also relevant, whether through collective agreements at the company or branch level, or through resolutions of the Wage Councils. The governing Wage Council is determined by the activity conducted by the company, and once determined, different regulations on aspects such as job descriptions, mandatory benefits, and salary increases will apply.

Regarding new forms of work, it is important to note that different kinds of outsourcing are allowed, as well as remote work.

Employment Agreements 
There is autonomy in the choice of recruitment procedure. However, any kind of discrimination is illegitimate.

Labor-related obligations and rights are fully valid for both parties, independent of the existence of a written employment contract.

Considering the above, written employment agreements are not mandatory but highly advisable because, unless there is an express agreement to the contrary, contracts are deemed to be entered into without a time limit (open-ended). Therefore, despite not being a mandatory requirement, fixed-term contracts should be entered into in writing, and the same applies to those contracts that imply a specific regime (such as probationary periods, part-time schedules, etc.).

Employment agreements may be classified according to their duration or purpose, among other criteria, being open-ended or fixed-term contracts (if there is a reason that justifies the fixed term), contracts with a probationary period (up to 90 days), or contracts for a specific project or work. 

Labor Obligations Arising From the Employment Relationship:

• Payment of the Salary
  This is the main compensation for the services rendered. The minimum monthly legal wage is established annually. For 2024, it is $22,268 (Uruguayan pesos twenty-two thousand two hundred sixty-eight), which is approximately USD 600. The minimum salary may be higher in the appliable Wage Council to the company
• Payment of Statutory Fringe Benefits
  In addition to their salary and the benefits that the applicable Wage Council might mandate, all employers must pay their employees, along with their ordinary salary, the following statutory fringe benefits:
  • Thirteenth Salary (“Aguinaldo”)
    The “aguinaldo” is a special bonus equivalent to one-twelfth of the total salaries paid in cash by the employer in the period from December 1st of one year to November 30th of the following year. Its payment is made in two installments: the first one in June and the other in December.
  • Additional paid leave (“Salario vacacional”)
    This is a sum of money received by the employee before starting their holidays. This benefit is equivalent to the net daily wage of the holiday. It is calculated by deducting from the holiday wage the total contribution to social security to which the salary is subjected.
• Vacations
  Every employee who completes a year of work is entitled to take a 20-day paid holiday in the following year.
• Social Security and Mandatory Health and Safety Insurance
  All employers must register their employees with the Social Security Bank and the Ministry of Labor and Social Security, as well as obtain mandatory health and safety insurance provided by the State Insurance Bank. The employer must pay the monthly contributions to the various entities that make up the system. These contributions must be paid jointly by the employer and the employee based on (i) the monthly salary, and (ii) the applicable percentage in accordance with the law.
• Social Security and Taxation
  The system is financed through an employer and a personal contribution, in accordance with the following chart. Additionally, the worker is obliged to pay Personal Income Tax ("IRPF"). The tax rate is progressional, reaching 36%. The employer is obliged to withhold the tax prior to the payment of the monthly remuneration.
• Employer Contribution Personal Input
  
  
  
  Only for the purposes of the retirement contribution (employer and personal) is the monthly salary taxed up to the sum of $ 256.821,00 (approx. USD 6,550). Wages paid more than this amount are not compulsorily taxed.
• Dismissal and Resignation 
  The employee has the right to a severance payment if dismissed without justified cause (the only justified cause to avoid severance payment is gross misbehavior). This right is acquired from day one, with no waiting period. There is no rule imposing the obligation of notice of discharge but note that special compensations might apply in specific circumstances (i.e.: pregnancy, illness, recent labor-related accident, etc.).
  
  The employment contract can also be terminated by the resignation of the employee, which is also not subject to any formality. In any case, it is advisable to ask the worker to communicate their willingness to resign in writing. Resignation does not require any prior notice.
• Unionization
  Uruguay is governed by the principle of freedom of association, which includes the right to join or not join a trade union. Trade unions are organized by branch of activity. They have no obligation to obtain legal personality to act, but they need to be legal entities in order to receive union fee deductions from employees and to request information.

There is currently no specific foreign investment control regime. Uruguay encourages all investments without discrimination between local and foreign investors. In this regard, Law No. 16,906 (the “Investments Law”) declares of national interest the promotion and protection of investments made in the country by both Uruguayan and foreign investors. With the exception of some traditional State monopolies, there seems to be no policy that seeks to withhold strategic sectors within the ownership of Uruguayan individuals or entities, as it occurs in other jurisdictions, except with a few exceptions explained below.

According to the Investments Law, a national interest status may be granted to any activity, specific project or company that meets certain objectives such as the increase and diversification of exports of processed goods, the establishment of new industries or the expansion or the refurbishing of existing ones, amongst others. Additionally, the Investments Law enables the Executive Branch to provide tax advantages to activities that are qualified as “promoted activities”.

There are indeed certain sectors that do require prior authorization in order to operate, but this is regardless of the origin of the investment (i.e., both Uruguayan and foreign investors must request this approval).

Industry Sector Controls on Foreign Investment
There are several industries and business activities that require governmental authorization in Uruguay, however, such authorizations are irrespective of the nationality of the investors. The same applies to local and foreign investment as well, such as for example, banking, insurance, other financial activities, mining, oil and gas, among others.

However, there are certain industries in which the applicable regulations require the presence of national individuals, such as: (a) real estate: companies with bearer shares cannot own rural real estate if their controlling shareholders are (i) national entities owned by foreign States or (ii) sovereign funds of foreign States. Exceptionally, the Executive Branch may grant authorization to a Uruguayan corporation whose shareholders are foreign States or sovereign funds of foreign States if said Uruguayan corporation: (i) submits a productive project and (ii) has a minor non-controlling participation of foreign States or sovereign funds; (b) media: companies providing radio or television broadcasting shall not have foreign shareholders, (c) aviation: If the owner of an Uruguayan company carrying out aviation activities is an individual, that person must be a Uruguayan citizen. In the case of a limited liability company, at least half of the partners (with a majority of capital) must be Uruguayan citizens with real domicile in Uruguay. In the case of a corporation, the majority of the shares (with the majority of votes) must belong to Uruguayan citizens with real domicile in Uruguay; (d) National Security/ defense: National Security and Defense are exclusively within the State’s competence. Private investment, local or foreign, is prohibited; (e) transport: Pursuant to Decree No. 283/89, in national companies of transport of cargo by road authorized to operate in international traffic more than half of the authorized capital and effective control of the company must belong to Uruguayan citizens with real domicile in Uruguay.

Moreover, there are three State Monopolies, in which private investment (national and foreign) is not allowed:

• OSE (“State Sanitary Works”) a state-owned company has the monopoly of the water supply public service in the country and serves water treatment in the country (except in the city of Montevideo), so private investment is not possible.
• ANCAP has a monopoly on the import and refining of crude oil and the import and export of liquid, semi-liquid and gaseous fuel. Private investment in these areas is not possible (although a recent modification allows for the importing of oil within certain conditions).
• ANTEL (a state-owned company) has a monopoly of local fixed-line telecom services so private investment is not possible. Foreign investment is permitted in mobile telecom services and in long-distance telecom services with prior authorization from URSEC.

In Uruguay, the Customs Code approved by Law No. 19.276 applies to the entire territory of the Republic of Uruguay. The second article of the law establishes the definition of the basic concepts of the matter.

Customs in Uruguay is under the control of the National Customs Office ("DNA"). In 2006, due to the growth of the economy and the increase in foreign trade operations, Uruguay adopted the position of positioning itself as a logistics HUB in the region, modernizing the guidelines that governed customs in the country and incorporating technology as a fundamental tool in the process.

The first of the steps aimed at updating the customs regime was the modification of regulatory matters. To this end, work was done on the Uruguayan Customs Code ("CAROU"), the Customs Infringement Regime and the Customs Brokers' Regime, and an attempt was made to standardize the guidelines and adapt them to the international framework.

With respect to the CAROU, the regulations are unified, systematized and updated; the customs territory is expanded, now including free trade zones; the figure of the Qualified Economic Operator is introduced; transparency and order of transits and franchises are increased; the list of agents linked to the customs administration is expanded; and reviews the customs infringement regime.

Customs Affidavit ("DUA")
The project known as DUA began in 2011. This consisted of the total digitization of customs documents, directly involving the participation of the private sector. Therefore, 100% of import, export and transit operations are documented digitally and must be documented by customs brokers.

Qualified Economic Operator ("OEC")
At the beginning of 2014, the Decree regulating the figure of the Qualified Economic Operator was signed. With this, the DNA grants a single Certificate to foreign trade operators who request it and comply with all the requirements and stages contemplated in the certification for a period of three years, which can be renewed.

The QEO or OEC in Spanish, and also known internationally as the Authorized Economic Operator, AEO, is a reliable and secure operator that meets a series of security and control standards (QEO Requirements) and is certified as such by the National Customs Office after an audit process of its organization, processes, security, management, and financial statements.

It comes from the SAFE Framework of Standards to Secure and Facilitate Global Trade of the World Customs Organization, which, in relation to the customs-business pillar, promotes the development of an alliance between customs and the private sector in pursuit of cooperative relationships.

Its primary objective is to facilitate international trade under a framework of trust and security, ensuring the protection of all links in the international supply chain in a way that translates into opportunities for economic growth and increased competitiveness for countries.

Single Window for Foreign Trade ("VUCE")
The program began in 2011 and operates within the Institute for the Promotion of Investments and Exports.

The Single Window for Foreign Trade ("VUCE") is a trade facilitation tool that enables all procedures related to import, export, and transit operations to be conducted electronically and from a single entry point. The implementation of a VUCE involves a significant modification of the foreign trade processes in which the State intervenes, making them simpler and more efficient, without compromising controls and security or altering the functional design of the involved agencies. VUCE platform allows the user to identify all the documents required for a foreign trade operation and for each of the procedures in question, send the electronic application and attach the digitized documents of the procedure. Through the platform, the information is referred to the corresponding competent body, which acts electronically on the procedure and can approve, reject or observe the procedure. Once the final permit or electronic document has been granted, the user is notified, and it is automatically sent (when applicable) to the National Customs Office.
Currently, the VUCE is the only point of entry for the management of procedures associated with Comex's operations.

National Verification Center
Within the framework of the creation of a Logistics Activity Zone in Montevideo ("ZAL"), the National Development Corporation ("CND"), the Local Council of Montevideo and the National Customs Office established a commitment for the creation of the first National Customs Verification Center ("CNVA"). It is an inter-institutional project (Montevideo Municipality, Port Administration, Ministry of Livestock, Agriculture, and Fisheries, Trains Administration, Post Mail Offices and the private sector) that will enable a more effective and efficient control of loads and will disable the circulation of heavy traffic in Montevideo.
The creation of a logistics and verification center is essential to facilitate the transit of goods at the border and speed up their availability by private operators, significantly reducing waiting times.

LUCIA System
LUCIA system is the customs system for foreign trade that allows the reception, validation and registration of customs declarations of all administered parties (brokers, importers, exporters, etc.); it enables the control of the customs process (before, concomitant and after the release of the goods); and allows the operational, perimeter and statistical monitoring of the goods and associated operations.

Regional Information Exchange Systems
Access to information as a form of collaboration between customs to facilitate legitimate operations and combat illicit traffic is essential in the current international foreign trade context. The main tool is the electronic exchange of information on customs operations, within this framework at the Mercosur level, two systems are operational: Exchange of Information on Customs Declarations ("INDIRA") and Computerized System of International Customs Transit ("SINTIA").

INDIRA is located within the LUCIA System and allows customs officials to consult data on imports from Argentina. For example, a border official can check how a DUA was declared in Argentina and see that it matches the DUA that is being filled to him at the border and thus compare the information.
SINTIA allows the sending of information from Uruguay to Argentina in order to manage risks and compare the information declared at each customs office to detect possible fraud.

Finally, customs has gone through important changes in recent times, and the idea is that it will follow the same path in order to become a Model Customs, both regionally and internationally.
This is increasingly possible due to the professionalization of the sector and the incorporation of new technologies into the processes that make it possible to streamline procedures, centralize information, standardize procedures and facilitate the general management of customs logistics.

As a rule, Uruguay allows the entry of any foreigner with a valid travel document (passport and identity card for Mercosur nationals). However, for some nationalities, it is required to have previously applied for an entry visa. Individuals, from most countries in Asia, the Middle East and Africa are required an entry visa.

To work in Uruguay, it is required to apply for a Legal Residency. The nationality and the period of stay in the country will determine the applicable procedure and the requirements to be fulfilled. South American nationals and relatives of Uruguayan nationals have a simple procedure, in comparison to the rest of the nationalities.

There are three main types of residence: i) Provisional Identity Card (period of 6 months), ii) Temporary Residence (period of two years) and ii) Permanent Residence (periods from two years onwards).

Once any of the three above-mentioned types of residence is started, the applicant can obtain a Uruguayan identity document and be registered as an employee.

Uruguayan environmental regulations do not consolidate all requirements and obligations under a single law. Instead, individuals and companies must adhere to specific regulations arising from various norms. These include obligations to refrain from actions that cause environmental damage, as well as requirements to obtain authorizations and permits for certain activities. Here, we outline the most significant environmental regulations in Uruguay.

Firstly, and with constitutional status, Article 47 of the Constitution of the Republic enshrines this protection, reinforced by Articles 7, 72, and 332, establishing it as a matter of general interest. Individuals are required to avoid actions that lead to significant depletion, destruction, or contamination of the environment.

Similarly, Law No. 16,466 ("Environmental Impact Assessment Law") was among Uruguay's first environmental laws, governing essential environmental management practices. Article 4 of this law mandates refraining from activities that deplete, destroy, or contaminate the environment. Those responsible must implement measures to mitigate these effects, facing potential administrative, civil, or criminal liabilities.

The Environmental Impact Assessment Law also regulates one of the most pivotal aspects of environmental law: the assessment process. Governed by Decree No. 349/005 ("Environmental Impact Assessment and Environmental Authorizations Regulation"), this law mandates prior and operational environmental authorizations for specified activities, constructions, or projects, renewable every three years. This environmental management instrument analyzes the impacts before authorizing certain activities, constructions, or works, requiring an administrative procedure to determine whether a project presents admissible or inadmissible negative environmental impacts. Without this authorization, the project's execution plan could be delayed or even halted. Failure to obtain these authorizations can halt project execution, with fines impacting project funding.

Additionally, Uruguay established the National System of Protected Natural Areas under Law No. 17,234, deemed crucial for national environmental protection strategies. This system safeguards diverse landscapes, ecosystems, species, and cultural elements. Other regulations protect specific areas like wetlands and rural and urban soils, governed by territorial planning regulations and departmental guidelines.

Regarding liability for environmental damage, Uruguay lacks a specific law but addresses it through Article 47 of the Constitution, Law No. 16,466 ("Environmental Impact Assessment Law"), and Law No. 17,283 ("General Environmental Law"). Uruguay's environmental regulations focus on administrative responsibility. Few articles address liability for environmental damage, and there is still no uniform regime for environmental crimes. Furthermore, a Draft Law on Liability for Environmental Damage has gained preliminary approval in Parliament. It proposes criminal penalties for offenses related to environmental pollution, including offenses against water, air, and soil pollution, biodiversity (wildlife and flora), and environmental management, penalizing falsehoods and obstruction of environmental oversight. The Draft Law holds legal entities accountable for punishable acts, with individuals in management roles also liable, facing penalties ranging from 6 months imprisonment to 8 years incarceration.

Uruguay has a secure and stable legal framework in the field of real estate transactions, which guarantees the owners the protection of their private property with clear rules. An orderly and transparent system of public registries added to the study of professionals such as real estate lawyers (notaries), gives foreigners an excellent place to invest.

Uruguayan nationals and foreigners have equal rights and are subject to the same protections granted by law in connection with the enjoyment and disposal of rights over real property. For the rural areas intended for agricultural exploitation, the rules establish that the property must be under the name of a natural person or some entities with nominative shares whose owners are natural persons, but the government can authorize in specific situations cases where entities do not comply with what was prior related.

The most common agreements executed over real estate assets in Uruguay for the development of business are purchase agreement (compraventa), preliminary purchase agreement (promesa de compraventa), lease (arrendamiento), usufruct (usufructo) and bailment (comodato) which grants different type of rights to the contracting parties and are subject to particular requirements.

When it comes to the acquisition or conveyance of rights in rem (i.e., rights that rely upon real property defined by the law as such) a double formality is required: title and mode. The most common title and mode used for the conveyance of rights in rem is a public deed executed before a public notary (title) and its subsequent registration before the public registry. With the sole notary’s authorization, ownership is transferred to the buyer.

Before entering into any type of agreement that involves real property, investors are advised to hire a real estate lawyer (notary public) who will perform due diligence of title search, current and prior registered owners, liens and mortgage, conveyance and chain of tradition of the property for the last 20 years.

In Uruguay, the basic legal framework of intellectual property is composed of the following laws: Law No. 9,739 of 1937, which was amended by Law No. 17,616 of 2003 on copyrights, Law No. 17,011 of 1998 on trademarks (including other distinctive signs such as trade names and slogans); and Law No. 17,164 of 1999, on patents of invention and utility models.

The governmental agency in charge of industrial property and software is the National Directorate of Industrial Property (herein “DNPI”) and the agency in charge of copyrights (other than software) is the National Library of Uruguay.

Trademarks and Patents
Trademarks and patents are only protected through registration, whereas trade names attain protection by evidencing continuous and public use. Any act or agreement in connection with trademarks and patents, such as transfers, or even modifications regarding the owner’s name or his place of business, must be recorded before the DNPI to become enforceable vis-à-vis third parties.

Trademark registration affords protection throughout a 10-year term, which may be renewed indefinitely for subsequent equal terms. Based on Law No. 19,149, which amended Section 19 of Law N. 17,011, the Use of Registered Trademarks is mandatory in Uruguay. This means that the registration of trademarks may be canceled by the holder of a direct, personal and legitimate interest through the action of cancellation for non-use, which must be filed before the DNPI.

Patent protection is in force throughout a non-renewable 20-year term counted as of the application date subject to the payment of annuities. Utility model patents and industrial designs have a 10-year term of protection subject to payment of annuities, which could be extended once a term of 5 years.

Patent or trademark owners who applied for a patent or trademark abroad, within a state member of the Paris Convention also enjoy a 12-month period to claim the Paris Convention Priority in the case of patents and a 6-month period to claim the Paris Convention Priority in the case of trademarks.

On June 21, 2024, Uruguay became a member State of the Patent Cooperation Treaty ("PCT").

Trade Secrets
Information that is meant to be used in industrial, productive or commercial activity, and whose nature allows it to be transferred from one party to another, will be protected as a trade secret, provided that (i) is secret, in such a way that it is not of public knowledge, nor may it be easily attainable by those knowledgeable in the respective matter; (ii) has a commercial value due to its secrecy, and (iii) has been subject to reasonable efforts to keep the information confidential. Consequently, industrial secrecy protection arises regardless of registration, whenever the requisites are met.

Copyrights
Per Uruguayan law, authors are the individuals who craft a protected work, to whom moral and economic rights are conferred. The author retains his right of ownership during his lifetime and his heirs or legatees heirs or legatees for a term of seventy years from the death of the deceased.

It is established that the enjoyment and exercise of the rights are not subordinated to any formality or registration and both are independent of the existence of protection in the country of origin of the work. It is established that the owners of the works and other rights protected by law, in order to sue the infringers, it will be sufficient that their name appears stamped on the work, performance, phonogram or broadcast in the usual form.

Enforcement of IP Rights
The applicable legislation also contains regulations regarding legal actions that can be initiated in the event that third parties infringe copyrights or industrial property rights, including civil actions for infringement unfair competition, or criminal procedures. The legislation also includes the possibility of requesting ex parte preliminary injunctions.

Consumers in Uruguay enjoy a series of rights that are designed to protect them in their consumer relations. The basic consumer rights include:

• Protection of Life, Health and Safety
  Consumers have the right to be protected against risks caused by practices in the supply of products and services considered dangerous or harmful.
• Education and Disclosure on Proper Consumption
  Consumers have the right to receive education on the proper use of products and services, freedom of choice, and equal treatment in contracting.
• Sufficient and Truthful Information
  Consumers should receive sufficient, clear, truthful information in Spanish, without prejudice to the use of additional languages.
• Protection Against Misleading Advertising
  Consumers are protected against misleading advertising, coercive or unfair methods in the supply of products and services, and unfair terms in adhesion contracts, each within the terms provided by law.
• Association in Consumer Defense Organisations
  Consumers have the right to associate with organizations whose specific object is consumer defense and to be represented by them.
• Prevention and Compensation of Damages
  Consumers have the right to the effective prevention and compensation of patrimonial and non-patrimonial damages they may suffer.
• Access to Judicial and Administrative Bodies
  Consumers have the right of access to judicial and administrative bodies for the prevention and redress of damages through agile and effective procedures, as provided by law.

In addition, Uruguay is governed by Resolution 37/19 of the Mercosur Common Market Group, related to electronic commerce, which, among other aspects, establishes certain additional information that must be provided to consumers.

There is also Law No. 18.507 on Small Consumer Law Cases, which regulates a specific and expeditious process for consumer claims whose value does not exceed 100 Unidades Reajustables (approximately USD 4,100).

Anti-Money Laundering, Financing Terrorism and Financing of the Proliferation of Weapons of Mass Destruction
As part of the UN and the Financial Action Task Force of Latin America ("GAFILAT"), a regionally based intergovernmental organization working closely with the Financial Action Task Force (“FATF”), Uruguay must ensure compliance with the 40 FATF recommendations and standards (the “FAFT Recommendations”) recognized as the International Standards on Combating Money Laundering, the Financing of Terrorism, and the Proliferation of Weapons of Mass Destruction (“ML/FT/PWMD”).

Uruguay's compliance with this commitment is reflected in various laws and regulations. As of this date, the regulatory framework primarily includes: (i) Law No. 17,835 dated September 29th, 2004 (as amended or supplemented), known as the Law on the Strengthening of the System for the Prevention and Control of Money Laundering and Financing of Terrorism; (ii) Law No. 19,574 dated January 10th, 2018 (as amended or supplemented), known as the Comprehensive Law against Money Laundering (the “Law”), along with its Regulatory Decree No. 379/018 dated January 10th, 2018, (iii) Law No. 19,749 dated May 21st, 2019, Concerning the Financing of Terrorism and the application of Financial Sanctions Against Persons and Entities Linked to Terrorism, its Financing, and the Proliferation of Weapons of Mass Destruction, along with its Regulatory Decree No. 136/019 dated May 25th, 2019, and (iv) regulations issued by the Central Bank of Uruguay (the “CBU”).

By way of example, FATF Recommendation No. 1 on “Assessing risks and applying a risk-based approach” dictates that countries should identify, assess, and understand the risks of money laundering and terrorist financing specific to the country. This includes designating an authority or mechanism to coordinate actions to assess these risks and apply resources aimed at ensuring that the risks are effectively mitigated. Based on the aforementioned assessment, countries must establish a risk-based approach and should require financial institutions and designated non-financial businesses and professions (the “DNFBPs”) to identify, assess, and take effective action to mitigate their money laundering and terrorist financing risks.

Uruguay identifies and assesses its ML/FT/PWMD risks through the development of national and sectoral risk assessments, which are managed by the Coordinating Commission against ML/FT/PWMD. This process is supported by the National Secretariat for Combating Money Laundering and Financing of Terrorism (the “SENACLAFT”, by its acronym in Spanish) and CBU. In Uruguay, there are two types of obligated subjects required to perform due diligence on their clients for anti-ML/FT/PWMD purposes: (i) Financial Sector: This includes, but is not limited to: Banks, Non-banking financial institutions, Currency exchange houses, Representatives of financial institutions, Financial service providers, Fund transferring companies, E-money issuing institutions, Payment and collection service companies, Transfer of funds companies, Securities’ transportation companies, Insurance and mutual companies, Securities market-related companies (e.g., stock exchanges, securities brokers and stockbrokers, portfolio managers, investment advisers, investment fund managers, financial trusts, financial trustees and professionals), (ii) Non-Financial Sector: Referred to as DNFBPs in the language of the FATF Recommendations, this includes: Casinos, Real estate agencies (real estate and promoters, construction companies, and other intermediaries in transactions involving real property), Attorneys-at-law (when acting in the name and on behalf of their clients in certain operations), Notary publics (when participating in certain operations), Auctioneers, Individuals or legal entities devoted to intermediation or mediation of any operation regarding sales of antiquities, pieces of artwork, and precious metals and stones, Operators and direct and indirect users of free trade zones, Providers of corporate services, Trusts and in general, any individual or legal entity that normally carries out transactions for their clients regarding certain activities, Civil associations, foundations, political parties, groups, and in general any non-profit organization with or without legal status, Public accountants and other individuals or legal entities, acting independently and participating in the materialization of certain operations or activities for their clients, Pension savings fund managers and Sports corporations.

On another note, the Law also lists activities that are considered predicate offenses for the crime of money laundering. Among the activities mentioned are drug trafficking, terrorist financing, war crimes, kidnapping, and fraudulent businesses, among others. It also establishes that any conversion, transfer, or possession of money derived from these activities, as well as the concealment and assistance in carrying them out, will be classified as money laundering. With respect to terrorism financing, it is codified in Law No. 17,835 as “Anyone who organizes or, by any means, directly or indirectly, provides or collects funds or assets of any nature, whether from a lawful source or not, to finance a terrorist organization or a member of such organization or an individual terrorist, with the intent that they be used or knowing that they will be used, in whole or in part, in any type of activity or acts of terrorism, or for a terrorist organization or its members, regardless of the link or the occurrence of terrorist acts and even if they do not take place in the national territory”.

Anti-Corruption and Anti-Bribery
The regulatory framework is mainly comprised of (i) Law No. 17,060 dated January 8th, 1999 (as amended or supplemented) known as the Law on Transparency and its Regulatory Decree No. 30/003 dated January 28th, 2003, and (ii) Law No. 19,823 dated September 25th, 2019 (as amended or supplemented), known as the Law for the Declaration of General Interest of the Code of Ethics in Public Service (the “Anti-Corruption Regulatory Framework”).

In furtherance of the above, Uruguay Law No. 17,008 dated October 7th, 1998, ratified the Inter-American Convention against Corruption, dated March 29th, 1996, which contains binding guidelines for the adoption of preventive and corrective legislative measures for what it calls “acts of corruption”. Some of the offenses whose criminalization the states are obliged to consider pursuant to this convention were already or were subsequently regulated by the Uruguayan state, such as bribery, influence peddling, abuse of privileged information, and transnational bribery. Moreover, Law No. 18,056 dated December 1st, 2006, ratified the UN Convention against Corruption, which contains certain guidelines for the regulation of “private-to-private bribery.” However, as of this date, Uruguay has not legislated on this matter.

The primary objective of the Anti-Corruption Regulatory Framework is to adapt and update public service practices, introduce duties and obligations for public officials, and establish prohibitions. Public officials are defined legally as any person who, regardless of the legal form of their relationship with the respective entity, performs a public function, whether for payment or free of charge, permanently or temporarily, in any state or non-state public law entity. Public officials are under the following prohibitions: Contracting with the body to which they belong, Intervening in operations where they are related to the counterpart, Engaging in other private activities where a conflict of interest with their public function may arise or an illicit use of it. Additionally, it forbids receiving certain gifts or other benefits or incentives with the purpose of expediting or delaying an act of their employment or acting contrary to their duties, which is also classified as a crime under Sections 158 and 159 of the Uruguayan Criminal Code.

Personal data protection in Uruguay is mainly regulated by Law No. 18.331 of 2008, known as the Law on Personal Data Protection and Habeas Data Action, and its regulatory Decree No. 414/009, articles 37 to 40 of Law No. 19.670 and its regulatory Decree No. 64/020.

In addition, there are various resolutions and guidelines issued by the Regulator (Unidad Reguladora y de Control de Datos Personales - "URCDP").

This legislation establishes a robust legal framework to guarantee the privacy and protection of individuals and legal entities' personal data, in line with international standards such as the General Data Protection Regulation ("GDPR") of the European Union. As a result, Uruguay has had the adequacy note granted by the European Commission since 2012.

Definition of Personal Data
According to Uruguayan law, personal data is any information relating to a natural or legal person, identified or identifiable.

Data Protection Principles
Law No. 18.331 establishes several fundamental principles for the processing of personal data in Uruguay:

• Consent
  The processing of personal data requires the free, prior, express and informed consent of the data subject. It must include certain specific information and be unambiguous.
• Purpose
  Personal data must be collected for specific, legitimate and explicit purposes, and must not be processed in a way that is incompatible with those purposes.
• Principle of Accuracy
  Personal data must be accurate, adequate, relevant and not excessive in relation to the purposes for which they are processed. They must be kept up to date and any inaccuracies must be corrected.
• Security
  Measures must be taken as necessary to ensure the security and confidentiality of personal data.
• Confidentiality
  Any person involved in the processing of personal data is obliged to keep them confidential.
• Legality
  Databases must be registered with the URCDP. The process involves declaring certain aspects of the processing of personal information.
• Accountability
  Data controllers and processors must take various measures to demonstrate compliance, including privacy by design and by default, and make privacy impact assessments where appropriate.

Rights of Data Subjects
Data subjects in Uruguay have a series of rights that allow them to control and protect their information:

• Right of Access
• Right of Rectification
• Right of Deletion
• Right of Inclusion
• Right to update

These must be answered within 5 working days. Otherwise, the data subject may initiate legal action for Habeas Data.

There is also a right to opt out of the processing of data for advertising purposes.

Data Breaches Notification
In case of security breaches affecting personal data, data controllers or processors must notify the URCDP within 72 hours, and notify data subjects whose rights have been significantly affected immediately.

Sanctions for Non-Compliance
Failure to comply with data protection regulations in Uruguay can result in the following administrative sanctions:

• Observation
• Warning
• Fines
  Fines can vary depending on the seriousness of the breach and could reach up to 500,000 Indexed Units (Approx. USD 78,000).
• Suspension for 5 days Definitive Closure
  In extreme cases, the definitive closure of operations related to the processing of personal data may be ordered.

International Data Transfers
The transfer of personal data outside Uruguay may only be made to countries or organizations that guarantee an adequate level of protection according to the criteria of URCDP, or under specific conditions that ensure adequate protection of the data.

Do Not Call List
There is the Do Not Call Registry, within the scope of the Communications Services Regulatory Unit ("URSEC").

The purpose of the Register is to protect the owners or users of telecommunications services, in any of their forms, from abuses of the procedure of contact, advertising, offer, sale and gift of unsolicited goods or services.

Any owner or user of telecommunications services who do not wish to be contacted through telecommunications services, such as through telephone calls, text messages, mobile applications or similar technological platforms for advertising, offers or gifts of goods or services may be registered in the Registry.

Those who advertise, offer, sell or give away goods or services using telecommunications services as a means of contact on their own behalf or through data processors (i.e. natural or legal person processing personal data on behalf of the person responsible for the database or processing) located in national territory or outside it, must consult the Registry prior to carrying out the procedure.

There are some exceptions provided for in the regulations.

The Uruguayan Competition Law No. 18,159 (hereinafter, the “LPDC”) envisages that an economic concentration shall be deemed to be any fact, act or convention that generates a transfer or change in the control of all or part of one or more participants or economic units, as well as the creation or acquisition of joint control over one or more entities. The term control shall be understood as the possibility of having continuous and decisive influence, directly or indirectly, over the strategy and competitive behavior of one or several entities.

Any economic concentration shall be subject to pre-merger control before the Antitrust Authority as the main enforcement body (or otherwise, before sector regulators in some cases: Central Bank of Uruguay, Telecom Authority, and Water and Energy Authority), pursuant to a new dual threshold introduced through an amendment to the LPDC in January 2024, namely, when:

within any of the last three accounting years:

• the annual "net" turnover (excluding taxes) within the Uruguayan territory of all the participants of the operation (at the group level), is equal to or greater than the amount of 500,000,000 Indexed Units (approximately USD 77 million as of June 2024), and:
• the annual net turnover within the Uruguayan territory of two or more participants of the operation (at the group level), considered individually, is equal to or greater than 30,000,000 Indexed Units (approximately USD 4.6 million as of June 2024).

Furthermore, for all those cases in which threshold (ii) is not met, yet the net annual turnover in any of the last three accounting years of the participants of the operation (at the group level) is equal to or greater than the amount of 500,000,000 Indexed Units (approximately USD 77 million as of June 2024) the enforcement body must be informed of the operation. The enforcement body will then have the discretionary power, within the following fifteen working days, to determine whether the operation should be subject to a request for prior authorization, and if it deems it so, a request for approval must be submitted to the enforcement body.

Even if the thresholds under the LPDC are met, there are a few possible legal exceptions to the requirement of pre-merger control, whereby authorization will not be needed if the operation refers to:

• the acquisition of companies in which the purchaser has already at least 50% of the shares thereof;
• the acquisition of a single company by a single foreign company that does not previously hold assets or shares of other companies in the country (“first landing”);
• the acquisition of bonds, debentures, obligations, any other debt instrument of the company, or non-voting shares; and
• the acquisitions of companies declared in bankruptcy, so long as only one bidder presented itself before the bidding process.

Pre-merger control shall consist of a prior authorization request which shall have to be submitted by the parties to the operation prior to its closing, which shall not occur until explicit or tacit authorization is obtained.

The Antitrust Authority shall have to issue its decision within a maximum term of 60 calendar days since the request is filed and its documentation is deemed to be “correct and complete”, with a possible “fast track” Phase I decision within the first 20 calendar days for cases which pose no competition concerns, and a potential extension of 60 additional calendar days for Phase II cases which require further review. These timelines do not apply to the sector regulators.

The enforcement body is legally entitled to:

• Authorize the operation with no remedies;
• Authorize the operation subject to behavioral and/or structural remedies;
• Reject the operation.

The LPDC prohibits economic concentrations that have anticompetitive effects, and there are local guidelines and relevant precedents in place setting criteria for the competitive assessment of the operations.

The LPDC envisages the application of sanctions for the infringement of pre-merger control provisions, including the scenario of gun-jumping.

Aside from ex-ante pre-merger control proceedings, the LPDC further envisages ex-post anticompetitive practices enforcement, addressing the prohibition of both unilateral and coordinated behavior, as well as abuse of dominance. There are certain horizontally coordinated behaviors that are prohibited under the per se rule.

The regulatory framework for state contracting of infrastructure, works and private initiatives is provided for in Law No. 17.555, also known as the "Economic Reactivation Law", and its Regulatory Decree 442/002.

Key Provisions and Regulatory Framework
A significant measure within this law is in Article 19, which introduced an innovative regime for private sector initiatives in public works and services. This provision extended the application of private sector involvement to the entire Uruguayan state, making it a cornerstone for state investment strategies today. The legal framework was further detailed and regulated by Executive Decree No. 442/002, ensuring clear guidelines and processes for private sector participation.

Private Initiatives in Public Works
The mechanism of private initiatives allows any private individual or entity, whether domestic or foreign, to propose projects that address identified public needs or services. When a public need or service is detected, a private entity can present a project to satisfy this need, thereby initiating a selection process where the administration evaluates the proposal's feasibility and alignment with public objectives. This process enables the administration to assess and, if deemed viable, promote the proposal through a competitive procedure that ensures good governance and adherence to public interest.

Article 262 of the Constitution outlines the distribution of competence, indicating that departmental matters are under the jurisdiction of the respective Departmental Government. If the administration accepts a private initiative, confidentiality is lifted, and the promoter conducts feasibility studies, which are then supervised by the administration for quality, cost, and completeness.

The submitter of the initiative would receive a reward between 5% to 20% of the bid in the tender procedure.

Public-Private Partnership ("PPP") Contracts

PPP contracts play a crucial role in developing infrastructure and providing services within the State. According to Article 3 of the PPP Law, infrastructure projects eligible for PPP contracts include:

• Roads and Highways
  This includes urban and rural roads, providing critical connectivity and supporting economic activities.
• Railways, Ports, and Airports
  Enhancing transportation and trade infrastructure to facilitate economic growth and international commerce.
• Energy Projects
  Subject to existing state monopolies, these projects aim to bolster energy infrastructure and ensure reliable supply.
• Waste Management
  Initiatives for waste disposal and treatment, contributing to environmental sustainability and public health.
• Social Infrastructure
  This encompasses a broad range of projects.

PPP contracts can also facilitate the colonization of economically viable lands for settlement, promoting agricultural and rural development in accordance with applicable laws.

Service Provision and Restrictions
While PPP contracts enable significant infrastructure development, the PPP Law explicitly prohibits contracting educational, healthcare, security, and inmate reeducation services for related infrastructure projects. This prohibition ensures that core public services remain under state control. Additionally, services exclusively managed by the state and state monopolies are excluded from PPP contracts, preserving essential public services and state functions.

Financial Viability and Value for Money
A critical requirement of the PPP Law is that a PPP contract must represent the best option ("value for money") for implementing the project. This involves presenting a comprehensive financial model from the private perspective, detailing the estimated remuneration for the contractor. This requirement ensures that PPP projects are not only feasible but also offer the most advantageous solution for public investment, optimizing resource allocation and maximizing public benefits.

In conclusion, Law No. 17.555 and its associated regulatory framework mark a significant step in Uruguay's economic recovery and development. By enabling private sector participation in public works and services, the law aims to leverage private expertise and investment to address public needs, promote economic growth, and enhance the quality of public infrastructure and services.

Aside from any grounds for dissolution and liquidation established in the Bylaws, the company has legal grounds for dissolution and liquidation, among others, by verification of the following: upon the decision of the partners, upon expiration of the term, upon fulfillment of the condition to which existence was subordinated, with the achievement of the corporate purpose or the supervening impossibility of achieving it, upon losses that reduce the corporate assets to less than one-fourth of the integrated capital stock, upon the impossibility of its operation, upon the continued performance of an unlawful or prohibited activity or upon the commission of unlawful acts of such gravity that the corporate purpose is undermined. The liquidation described in this section refers to those causes that do not imply the determination of the liquidation by the authority. The main steps of such a process are as follows:

• Dissolution
  Unless some exceptions (e.g. expiration of the term), the General Shareholders' Assembly or the judicial authority must approve/declare the dissolution of the company.
• Modification of Corporate Name
  At the end of the corporate name, it must be added the legend “en liquidación” (in liquidation). Omission of this will result in joint and several liability to all administrators and liquidators for any damage to any third parties or partners.
• Appointment of the Liquidator
  Liquidation will be overseen by the administrators unless special cases or agreed upon otherwise. The appointment of the liquidator (an appointment that the liquidator must accept by means of an acceptance letter), if applicable, shall be made by the majority applicable to the type of legal entity, within 30 days of entering into a state of liquidation. The appointment must be filed before the National Trade Registry Section and before tax (“DGI”) and social security (“BPS") authorities.
• Continuity of the Corporate Bodies
  During the liquidation, the management bodies will continue to be active, but their functions must be exclusively aimed at the liquidation.
• Inventory and Opening Balance
  The liquidator, within 30 days of assuming office, must prepare an inventory and balance sheet, a period that may be extended up to 120 days, by resolution of the partners' majority.
• Payment of Obligations and Collection of Receivables
  It is necessary to fulfill and declare the extinction of the totality of the corporate liabilities. Depending on the type of entity, the company’s liquidator may even require the company’s partners to make the required contributions in order to cover the company’s liabilities. Of course, such contribution is not required when partners are only responsible towards the company for the contributions (“aportes”) made but are otherwise irresponsible for the company’s obligations.
• Partial Early Distribution
  The Business Corporations Law provides that any of the partners may demand a partial early distribution if the corporate obligations are sufficiently guaranteed. In the case of corporations, this may only be exercised by shareholders representing at least 10% of the integrated capital.
• Final Balance and Distribution Project and Implementation of the Distribution
  A project for the distribution of the remainder must be formulated, and the totality of the remaining assets must be awarded to the partners, by way of reimbursement of capital, in proportion to their participation in the entity.
• Extraordinary Shareholders’ Meeting
  Resolving: (i) the dissolution and liquidation of the Company, (ii) to approve the special balance sheet determining its assets and liabilities (iii) allocation of assets and liabilities to the shareholders, iv) state there are no pending debts and approve the distribution of assets to its shareholders, v) the cancellation of the shares, and (vi) the appointment of the liquidator. The date of the meeting where the liquidation is resolved becomes the closing date of the fiscal year, where to submit the last affidavits of the company and payment of taxes that correspond.
• Cancellation of the Registration
  Once the procedure has been completed, the liquidators will make a declaration closing the company's activities before the tax (“DGI”) and social security (“BPS”) authorities. DGI will communicate directly the liquidation to the RNC, without administrative conformity.
• Tax Certificates
  Request before DGI, BPS, and the State Insurance Bank (“BSE”) of certificates reflecting that all payments have been made.
• Cancellation of Shares
  In the case of SA, SAS, and other types of companies that have shares, the cancellation or destruction of the totality of the securities representing the capital stock must be evidenced.
• Dissolution Before AIN
  Cancellation of the Company, which can take place only after certificates issued by DGI, BPS and BSE have been obtained. Due to the fact that there is a deadline of 30 days to file the request for dissolution before AIN and that the procedure to obtain the tax certificates takes time, the filing before AIN should be made before obtaining the certificates, and once those are obtained the procedure should be continued.
• Publications
  Once the dissolution before AIN and registration in the RNC has taken place, publications should be made in the “Diario Oficial” ("Official Gazette") and in another newspaper, for the purposes of making the dissolution and liquidation effective against third parties.

Bankruptcy proceedings in Uruguay are regulated by Law No. 18,387 ("Insolvency Law"), enacted on October 23, 2008.

The Insolvency Law contains the regulation for companies in a situation of insolvency. In general, the law contains two possible outcomes.

The first possible outcome is the reorganization of the company. This reorganization consists of a situation where through the process the debtor makes a proposal to the creditors with the purpose of achieving reductions and waivers of their credits, allowing the company to continue its operations, and pay according to such reductions and waivers.

A second possible outcome occurs when the reorganization is not possible, either because of the situation of the company, or because of the inability of the debtor to reach an agreement with its creditors. In this case, the liquidation of the company would be declared.

This law also regulates the judicial validation of a Private Reorganization Agreement (“APR” for its acronym in Spanish, which consists of an agreement prior to the declaration of bankruptcy that must have the approval of a high majority of shareholders). The law also contains other regulations, such as the rules of Cross Border Insolvency where the Insolvency Law regulates the cooperation between Uruguay and foreign States involved in an insolvency proceeding that takes place in several jurisdictions; or regulations related to the revocation of certain acts made by the debtor.

Under the Insolvency Law, “Insolvency” is defined as a situation where the debtor is not able to comply with its obligations.

By this, the Insolvency Law associates insolvency with patrimonial impotence (i.e., the inability of the debtor's assets to meet the payment of debts, whether due or not, and regardless of the number of creditors the debtor has). In line with the above, the Bankruptcy Law establishes a list of absolute and relative presumptions based on which a company is considered to be in a situation of insolvency.

The insolvency proceeding may be declared at the debtor's own initiative, but may also be requested by creditors, and even by other interested parties. If the insolvency proceeding is requested by the debtor itself, and as long as there is no prior request by a third party, the insolvency proceeding will be classified as voluntary. In all other cases, it will be classified as necessary. The consequences of the insolvency proceeding may be different if it is voluntary or necessary.

After the declaration of bankruptcy, a Liquidator or Trustee would be appointed. The role of these figures is to administer the bankruptcy estate and coordinate for the best outcome for the creditors.

The bankruptcy proceedings would come to an end only if the agreement is entirely fulfilled (in case of a reorganization), or if all the creditors were paid with the liquidated assets of the company. Usually, the assets are not sufficient to cover all the credits. In these cases, the proceeding is declared suspended. The conclusion of the proceedings shall be declared if ten years elapse after the suspension was declared.