Employer of record in Uruguay

The economy

There is a high level of social spending in Uruguay. With an export-oriented agricultural sector and a strong focus on tech training for its young people, many work in information, communication and technology sectors.

Small and medium businesses

Small and medium enterprises (SMEs) play an important role in the development of a country. This is fortunate as SMEs contribute to economic development in various ways by creating employment for rural and urban growing labor force, providing desirable sustainability and innovation in the economy as a whole.

In Uruguay there are around 170,000 small and medium sized enterprises. These companies create more than 60% of jobs in the country.

Population 

A well educated workforce of 3.5 million citizens, Uruguay is an attractive location for business. In fact, they have the best-educated workforce in South America.

With each generation entering the workforce going forward, there will be a higher education in both computers and technology. At least 11% of all who go to college enroll in engineering programs.

The country’s workforce is highly skilled, highly educated, and highly capable.

Economic opportunities

Uruguay funds significant time and money toward educating future populations, and the country expects to see a rise in the information technology sector, which is currently booming.

One company, GeneXus, an artificial intelligence developer, is located in Uruguay and has seen tremendous success within the country. The co-founder of GeneXus says, “The world of technology is looking at Latin America” (Forbes), indicating a positive expectation in the country’s technological leadership.

Key sectors of the national economy

Uruguay has five major sectors that make up its annual GDP:

• Exports / Imports: Uruguay exports goods such as wool, timber, grains, and beef. They have a unique import/export ratio that imports almost as much as they export to other countries.

• Tourism and hospitality: Like most Latin American countries, Uruguay makes a significant amount of money through tourism. This industry employs a large portion of the population.

• Agriculture: Uruguay is a member of the Cairns Group, the world’s leading association of countries that create a lot of agricultural exports.

• Financial service industry: Despite a financial crisis in 2001, Uruguay remains a favorable place for banking due to its flexible financial laws.

• Information technology: Uruguay is home to a few startup tech companies that are labeled “unicorns” by Forbes; meaning they were valued above $1 billion before traded on the stock market.

Human talent

Uruguay’s citizens are highly educated in technology, this is thanks to the amount of resources they pour into education. They achieve above the regional average in Human Capital and research.

It is expected that business professionals should have some understanding of English. With that being said, however, it appears the majority of people within Uruguay use Uruguayan Spanish as their primary language.

Prominent cities for business

Here are a few large cities within Uruguay ripe for a business looking for excellent outsourcing opportunities:

• Montevideo: The biggest city within Uruguay, Montevideo, is known as a vibrant cultural city that serves as the chief financial and educational hub of the country.
• Ciudad De La Costa: This is the third-largest city in the country, but is often thought of as an extension of Montevideo. This city serves as an important commercial and tourist hub for Uruguay.
• Paysandú: This city is the center of the plantation forest industry for Uruguay and hosts many popular tourist attractions

Technological ecosystem

Uruguay has poured considerable resources into spreading technology and expanding internet access for the region. Almost 100% of the country’s public education has internet access and guaranteed free laptops to students.

The country’s workforce is highly skilled, highly educated, and highly capable. Public sector employment is roughly 80% unionized, giving the workforce a large amount of negotiating power regarding working conditions. The majority of the younger workforce works within the information, communication, and technology sectors.

Facilities for foreign investment

Uruguay has favorable banking regulations from companies investing here. Their skilled workforce is ideal and they have a variety of incentives, with this said technology companies have thrived in Uruguay.

Gastronomy

A dinner invitation for 9:00 p.m. usually means to arrive by 10:00 p.m. When you do you may be served one of the most popular meals in Uruguay called Asado, which is basically barbecue meat. In fact, Uruguayans may rival Americans when it comes to the love of meat on the menu.

Chivito is Uruguay’s fast food. It is a sandwich with sliced steak, ham, cheese, eggs and mayonnaise. For your sweet tooth churros are popular as are Alfajors, both filled with dulce de leche.

Uruguayan cuisine is a fusion of foods from mainly western European countries.

General highlights

What you need to know about employing personnel in Uruguay:

Laws and agencies that regulate labor relationships

Key tax and labor authorities

Labor contracts

Basic requirements

Indefinite employment contracts are what is most commonly used in this country. There are also fixed term contracts which allow for a specific period of time and specific task contracts which allow the employer to outline a task that must be completed with no timeline attached.

Payroll

Legal benefits in Uruguay

• Your employees must receive supplementary and guaranteed benefits the moment they begin working.
• 20 vacation days are required per year, and for every 5 years this increases by one day.
• There are a total of 5 public holidays that Uruguans can take off, but not all require pay.
• Once you meet minimums you can add market norm benefits to ensure your job offer is more appealing. These can be private healthcare, or more paid time off especially during holidays.

Employers contribution or labor cost

Annual taxable income

Corporate tax rates

Disability

There are two types of disability Benefits – total and temporary allowance. Furthermore, the National Care System (NCS) offers services for those who are disabled.

Public holidays

Termination

The Labor Code outlines rules for termination of an employment contract:

Other forms of compensation upon termination:

Severance pay grades are based on the following table: