Starting a business in
🇺🇾Uruguay
Checked November 4, 2026 · How we score
Corporate tax
25%
Top income tax
36%
Setup from
$1,500
all-in, first year
Time to form
15 days
visit usually needed
Taxes in Uruguay
| Corporate income tax | 25% 25% IRAE on Uruguayan-source income; free trade zone users (e.g. Zonamerica) pay 0% IRAE on zone activity. Foreign-source income is generally not taxed for companies. The Software law and Law 16.906 investment incentives give partial exemptions for tech and large investments. |
|---|---|
| Personal income tax (top) | 36% IRPF on Uruguayan-source labour income is progressive up to 36%. Capital income (interest, dividends, rent) is taxed at 7%–12%. From 2026, foreign-source capital income of residents is taxed at 12% (previously partly exempt). New residents can use a tax holiday (see regimes). |
| Tax system | Territorial (foreign income untaxed) |
| Capital gains tax | 12%12% on capital gains from Uruguayan sources and, since 2026, on most foreign capital income of residents; the tax holiday may exempt new residents. |
| Dividend withholding (non-residents) | 7% |
| VAT / GST | 22% |
| Social security | IVA 22% (10% reduced). Employer BPS contributions about 7.5% and employee about 15% on salary. Dividends to non-residents face 7% withholding unless reduced by treaty. |
Forming a company in Uruguay
| Usual entity | S.A.S. (Sociedad por Acciones Simplificada), S.R.L. or S.A. |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $1,500–$3,500 |
| Annual running cost | $2,500–$6,000 |
| Time to incorporate | 15 days |
| Form remotely as a foreigner | No |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | No |
| Statutory audit for small companies | No |
| Business banking for non-residents | Moderate |
Residency and visas
Uruguay's residency is easy: Mercosur citizens can obtain it quickly, and other nationals apply with clean criminal records, proof of income and a local address (legal residency typically takes months). Tax residency is triggered by 183 days of presence or by a main economic interest in Uruguay, and a Uruguayan tax holiday for new tax residents applies from 2026 only under stricter conditions.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 2/5 (1 = easiest) |
Special tax regimes
Tax holiday for new tax residents
New tax residents can be exempt on foreign-source capital income for up to 11 years if they meet the 2026 rules (physical presence over 183 days, a qualifying investment such as around US$2 million in real estate, or an innovation fund contribution). Previously a 7% flat option existed. The scheme is under reform, so confirm details with DGI.
Free trade zones (Zonamerica)
Companies in free trade zones pay 0% IRAE and are exempt from most taxes on zone activity, but must employ locals (75%) and serve non-Uruguayan customers.
Software and tech incentives
Qualifying software exports and tech companies can access exemptions of up to 90% on income tax under Uruguayan software incentives.
Pros and cons
Why founders pick Uruguay
- Stable democracy and strongest institutions in the region
- 0% in free zones; tax holiday for qualifying new residents
- Solid banking system with a long history of private banking
- Easy residency and a good quality of life
Watch out for
- 22% VAT, 25% corporate tax and high living costs for the region
- The tax holiday became stricter in 2026
- Company setup and RUT registration need local presence or representatives
- Foreign capital income is now taxed at 12% for residents outside the holiday
Best for: Remote workers and investors who qualify for the new-resident tax holiday · Tech exporters using Zonamerica and software incentives · Founders who want stability and a strong banking system in South America
Uruguay: common questions
Does Uruguay tax foreign income?
Uruguay has a mostly territorial system for companies. For resident individuals, foreign capital income (interest, dividends, capital gains and rent) is taxed at 12% from 2026, while foreign labour income is generally not taxed. New tax residents may qualify for a tax holiday under the stricter 2026 conditions.
What is the Uruguay tax holiday for new residents?
New tax residents can be exempt on foreign-source capital income for 11 years if they meet the 2026 conditions, such as spending over 183 days a year in Uruguay, investing roughly US$2 million in real estate, or contributing about US$100,000 a year to an innovation fund. The earlier regime with lower thresholds and a 7% option was narrowed, so check current rules with the DGI before moving.
What is Uruguay's corporate tax rate?
The IRAE corporate income tax rate is 25% on Uruguayan-source profits. Companies in free trade zones such as Zonamerica pay 0% on qualifying activity, and software exporters can obtain large partial exemptions.
Can I incorporate in Uruguay as a non-resident?
Yes, an S.A.S. can be formed with foreign shareholders and a local registered address, typically through a local lawyer or accountant. In practice, opening a bank account and obtaining a tax ID (RUT) require documentation and often a visit, so full remote setup is uncommon.
Does Uruguay have a digital nomad visa?
There is no dedicated digital nomad visa with a set income threshold. Many remote workers use the standard residency process and a tourist stay of up to 90 days while applying. Check Uruguay's migration authority for any updated remote-worker programs.
Sources
- DGI Uruguay (Dirección General Impositiva)
- Dirección Nacional de Migración (Uruguay)
- PwC Worldwide Tax Summaries: Uruguay
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.