Uruguay has become an increasingly popular destination for foreign companies looking to expand their operations due to its stable economy, favorable business environment, and strategic location in South America. This article will delve into the importance of having an auditor in Uruguay.
With a highly skilled workforce, modern infrastructure, and a government committed to attracting foreign investment, an auditor in Uruguay opens up a range of opportunities for businesses in a variety of sectors. Whether you’re looking to set up a new venture or expand an existing one, there is an attractive and welcoming environment for foreign investors to register a business in Uruguay.
To ensure a successful launch or relocation of your business in Uruguay, it is essential to have a thorough understanding of the local tax and accounting regulations, which is where Biz Latin Hub comes in. We know the regulatory environment inside out and we can help you set up a company and keep it running in full compliance with the law, including providing an auditor in Uruguay.
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Why does a company need an auditor in Uruguay?
Navigating the complexities of doing business in a new country requires local expertise, especially for foreign investors. Uruguay’s financial regulations, for instance, can be intricate, often requiring several months or even years to comprehend fully.
As a precautionary measure, it is highly recommended to leverage the services of local specialists to mitigate potential issues.
In recent years, Uruguay has made significant efforts to enhance its accounting and auditing environment and align with International Financial Reporting Standards (IFRS).
All companies with debts equal to or surpassing 20% of asset value are required to present fully audited accounts, as are certain other companies such as publically listed companies, pension funds and insurance companies.
Here are the most common legal entity (company) structures in Uruguay:
- The Corporation/Joint Stock Company (Sociedad Anónima – S.A) which there are two types:
- Open Corporation: companies that use public savings or have shares listed on the Montevideo Stock Exchange (BVM).
- Closed Corporation: have a limited number of shareholders and stocks are not traded publicly on the BVM.
- The Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L)
The S.A. is the most common legal entity structure in Uruguay.
What is the role of an auditor in Uruguay?
To comply with Uruguay’s financial regulations, it is crucial to have the assistance of an experienced auditor for your company.
Uruguay mainly follows the source principle when it comes to taxes, which means that taxes are only imposed on assets, activities, and rights used within the country, regardless of the nationality or residence of the parties involved.
This means that those activities or assets performed/located outside of Uruguayan territory may not be subject to taxes in Uruguay (although there are some exceptions).
Foreign investment in Uruguay is not subject to any restrictions, except for some control under competition law. However, if the transaction meets the gross income requirements of the participants, it may not require approval by the Competition Office.
For example, if a foreign entity acquires shares of a single Uruguayan entity, and if the foreign entity does not have any assets or shares in Uruguay yet. Otherwise, it will be necessary to obtain prior approval from the Competition Office.
Corporations, agriculture companies, trusts, and investment funds not regulated by the Central Bank of Uruguay must register their financial statements with Auditoría Interna de la Nación accompanied by an audit, review, or compilation report issued by an Uruguayan certified public accountant.
An experienced local auditor in Uruguay can assist your business in resolving any tax disputes before they become legal matters.
4 tips for selecting an auditor in Uruguay:
- Relevant experience
- Good reputation
- Language skills
- Effective communication
When looking for an auditor in Uruguay, there are certain factors to keep in mind, including:
1 – Relevant experience: Look for an auditor that has experience working with foreign investors and in your industry.
2 – Good reputation: Check online reviews and feedback to assess the quality of service you can expect.
3 – Language skills: Ensure that the auditor you work with is fluent in a language you are comfortable communicating in.
4 – Effective communication: If you will be spending extended periods outside of Uruguay, choose a lawyer or firm that is proficient in using online tools for easy management and reporting.
FAQs on an auditor in Uruguay
It is important to have an experienced auditor in Uruguay to ensure that your company is compliant with the country’s financial rules.
All companies with debts equal to or surpassing 20% of asset value are required to present fully audited accounts, as are certain other companies such as publically listed companies, pension funds and insurance companies.
You do not need one by law, but you may find it beneficial to undergo an auditing process in order to demonstrate reliability, company health and transparency.
When looking for an auditor in Uruguay, there are certain factors to keep in mind, including:
Experience: Look for an auditor that has experience working with foreign investors and in your industry.
Reputation: Check online reviews and feedback to assess the quality of service you can expect.
Language: Ensure that the auditor you work with is fluent in a language you are comfortable communicating in.
Communication: If you will be spending extended periods outside of the country, choose a lawyer or firm that is proficient in using online tools for easy management and reporting.
It is important to note that accounting records must be kept in Spanish.
Biz Latin Hub can provide you with an auditor in Uruguay
Starting a company in Uruguay requires the support of a qualified financial team from the outset to ensure that your business complies with local laws and is well-regarded by the authorities.
Without this, even a well-planned business may struggle to thrive. At Biz Latin Hub, we have a team of locally-based specialists who comprehensively understand the Uruguayan business environment, including its laws and complications.
We are well-equipped to assist foreign companies looking to conduct commercial activity in the region with all accounting, taxation, and financial matters.
If you’re interested in learning more about the Latin American economy, the opportunities for starting a company there, and need an auditor in Uruguay, please contact us today.
