Doing Business: Uruguay Fintech Market?

The small South American country of Uruguay is an outlier in the region in the sense that it has low levels of corruption and crime, a stable economy, and a large middle class. It has many hidden treasures that make doing business in Uruguay a wise decision for companies and investors looking to enter the Latin American market.

The country’s GDP grew 4.9 percent overall in 2022, and is expected to have reached 2% in 2023 and 2.3% in 2024, according to the latest economic statistics. This growth is more pronounced in some sectors, such as the banking system – so much so that Uruguay has been called the “Switzerland of Latin America.” This has helped the country’s Fintech market grow exponentially in recent years, as technology and banking are deeply intertwined. 

SEE ALSO: How to Set Up a Business in Uruguay in 5 steps.

Many foreign businesses and investors are attracted to the jurisdiction specifically to enter the Fintech (short for financial technology) market – be it to invest in an existing startup or to build a tech company from the ground up. The Fintech sector exploded in 2021 across Latin America in general and Uruguay in particular. Indeed, tech-focused companies from the US and Europe are leading the way among those doing business in Uruguay.

Doing business in Uruguay: Company formation requirements

There are three main company types that foreign businesses or investors can incorporate in Uruguay. All of them require, at a bare minimum, the following:

• A company name – As part of the company incorporation process, a legal company name must be proposed, registered, and approved.

• The creation/registration of corporate bylaws – Companies must form corporate bylaws, which must also be approved by the Uruguayan National Audit Office.

• Compliance with shareholder regulations – The company needs at least one person to act as a local shareholder, who is in part accountable with unlimited liability.

• Capital requirements – Uruguayan legislation does not stipulate a minimum capital requirement in the company formation process.

• Physical address & tax declarations – The corporation must have a physical address in Uruguay, register with the Uruguayan Tax Administration Office, and file monthly tax declarations.

Here, it’s important to note that an Employer of Record in Uruguay is one of the best ways to ensure your company meets the legal employment standards to hire staff, enter the market, and operate efficiently.

Doing business in Uruguay: Quick facts

There are several reasons why Uruguay should be on a company’s radar. Here are just a few reasons why doing business in Uruguay is attractive:

1. It has stable economic and political institutions
2. It has a large pool of human talent
3. It is strategically located to the larger economies of Brazil and Argentina
4. It boasts one of the highest standards of living in the region
5. The sky’s the limit for Uruguay’s Fintech sector

Doing business in Uruguay: More reasons to be optimistic

There are many things to keep in mind when doing business in Uruguay, especially when it comes to the Fintech sector and wider economy. 

• Uruguay is part of a regional trade bloc – Uruguay is a member of the Southern Common Market (MERCOSUR), giving companies that operate in the country access to the Argentinian, Brazilian, Paraguayan, and Venezuelan markets.

• Uruguay saw the creation of its first Fintech ‘unicorn’ – The payment processing company called dLocal is based in the country’s capital Montevideo. In 2020, the startup’s shares soared 48 percent on its IPO on the Nasdaq. As of March 2024, the company has a market cap of $4.45 billion.

• Uruguay moving toward renewable energy – Uruguay is a regional leader in renewable energy, having invested heavily in solar and wind power. The country produces so much energy from sustainable sources that it even exports surplus power to neighboring countries Argentina and Brazil.

While this article hammers home the point that Uruguay is a dynamic, business-friendly destination, entering any new market can be complex for those who do not know the administrative, legal, and bureaucratic ins and outs of the country. That’s why a good rule of thumb is to seek the guidance of trusted local professionals who can make doing business in Uruguay a smooth and pain-free process.

Biz Latin Hub can help you with doing business in Uruguay

At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.

Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross border operations.

As well as knowledge about doing business in Uruguay, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services.

Contact us today to find out more about how we can assist you in finding top talent, or otherwise do business in Latin America and the Caribbean.

If this article on doing business in Uruguay was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors.