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Uruguay SAFI
Uruguayan Sociedad Financiera de Inversion
Uruguay is South America's only low-tax, offshore jurisdiction but is not generally considered an offshore haven. Uruguay's offshore corporations, regulated by Law 11,073 of 1948, have a beneficial tax treatment and provide anonymity for their shareholders, elements that allow for an efficient protection of assets and income.
The Uruguayan SAFI is a type of Uruguayan offshore company which is exempt from all forms of taxation on profit. SAFIs do pay an annual licence fee to the government. This is calculated with reference to the assets and liabilities and referred to below. SAFIs cannot trade or own real estate within Uruguay but otherwise are subject to few restrictions on their activities and little in the way of bureaucracy. Because of their ease of use and the fact that Uruguay is not immediately perceived as a tax haven jurisdiction, SAFIs can be extremely useful vehicles through which to conduct trading and investment activities around the world.
Activity:
These companies can:
Make direct or indirect investments, on their own or for third parties. These investments can be on titles, bonuses, shares, warrants, debentures, real property or movable goods.
Use Uruguayan corporate vehicles to conduct brokerage, trading and money management for non-Uruguayan citizens worldwide.
Hold assets and investments, under anonymity.
Hold bank accounts for foreign citizens.
Make trade structures to avoid excessive taxation in the countries where goods are imported to.
SAFIs are commonly used to trade instruments, including currencies, etc. for itself or for third parties, as allowed by law, and operating through a website.
Main Advantages:
Complete anonymity with respect to the identity of the shareholders of the corporation.
This investment / ownership can be done directly or indirectly, for its own purpose or on behalf of a third party. It is this factor in particular which has received attention from knowledgeable operators, since it in effect allows for investment and financial activity to be carried out on behalf of third parties. This broad interpretation has lead to many using these companies for investment and other private fiduciary services where third party funds are being managed. This of course may not have been the intent of the original framers of the 1948 law but the text is clear and unambiguous.
Main Disadvantages:
Incorporation takes between 3 and 4 months but ready made companies are available for immediate purchase. The main prohibitions are the public offering or stock exchange offering of shares, their assets may not include shares, debentures and other commercial papers issued by local companies which are not SAFI´s. Since incorporation can take several months, unused shelf companies are typically what clients purchase, the price of which can vary depending on current availability as well as age and authorized capital.
Taxation:
Unlike regular corporations incorporated in Uruguay, SAFIs have no income tax of any kind, or any tax on any of the goods it owns. As stated, the SAFI is not subject to tax on corporate profits but does pay an annual tax or licence fee equal to 0.3% of the net asset value. This somewhat complicated calculation normally results in only a nominal figure becoming payable. The taxable base is calculated by taking the amount of shareholder equity and adding to it a figure equal to all liabilities minus twice the shareholder equity. This somewhat complicated calculation normally results in only a nominal figure or zero becoming payable.
Requirements:
Companies need have only one shareholder and shares can be issued in bearer or registered form. There is no requirement to file the details of shareholders on any public record. A minimum of one director is required and corporate directors are permitted. There is no requirement to file the details of directors on any public record, but their details do have to be lodged with the tax office. Full accounts, in the prescribed format, must be prepared, audited and presented to the tax authorities within 4 months of the financial year end selected by the company. As with all corporations liability is limited, and thus not extendable to shareholders beyond the capital invested in the company. SAFIs have an "authorized capital" stated in their by-laws, of which the law requires that only 5% be paid up. This is usually done when the company is incorporated and then funds are removed and is a service provided automatically by the incorporator.
There are few restrictions on name and activity. All company names must end with the words "Sociedad Anonima" or its abbreviation "SA". The company name cannot contain any words indicating that the company is undertaking banking or insurance business without obtaining the requisite licence. names which are considered undesirable or offensive or implying government patronage would also be disallowed. However, words which in other jurisdictions would not be allowed without further procedure such as trust, and investment services are not restricted nor is the company restricted from undertaking the indicated activities.
USes:
There are many uses to which a SAFI can be put to, that would normally require a more specialized licence. The key of course would depend on where the operations office is physically located since local laws may conflict. Examples of businesses being operated as SAFI’s:
Investment fund management
Investment trading operations
Fiduciary services
Securities transactions on behalf of third parties
Banking services related activities
Debit/credit card issuance and management
Foreign Exchange activities
Uruguay Financial Company Packages
If you have more questions about Uruguay (SAFI) Financial Companies please contact us.
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