Uruguay is a country that sits in the southern cone within Latin America. The weather is mild and the cost of living is relatively low compared to the U.S. Compared with its neighboring countries, Uruguay has experienced more rapid economic growth and the best-educated workforce in South America.Uruguay is home to many technological industries, such as Fintech and other digital
engineering solutions.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.
The Importance of Small and Medium-sized Companies
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 smal
l and medium
sized enterprises. These companies create more than 60% of jobs in the country.
Population Characteristics
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.
Business Culture in Uruguay
Eye Contact Maintaining direct eye contact is considered polite. Close speaking and even touching a shoulder or arm is common.
Prompt Work, Flexible Leisure Workers in Uruguay expect exact adherence to work schedules or meeting starting times. Uruguayans are comfortable conducting business over lunch. Business dinners are to socialize. Away from the workplace, punctuality yields to a relaxed pace. If invited to a co-worker’s gathering it is rude to bring up business, unless the host introduces the subject.
European Flair Uruguayans pride themselves on their lineage linked to Spain and Italy. They have flexible schedules for social engagements and use the right cheek kiss as a greeting.
Uruguay Gastronomy: regional and traditional cuisines
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
| Year | 2021 |
| Country | Uruguay |
| Capital | Montevideo |
| Num. States/Provinces | 23 States |
| Principal Cities | 1. Montevideo
2. Salto
3. Paysandú
4. Las piedras, Canelones |
| Language | Spanish |
| Local Currency | Uruguayan peso |
| Major Religion | Christianity |
| Date Format | dd-mm-yyyy |
| Thousands Separator Format | 9,999,999,99 |
| Country Dial Code | +589 |
| Time Zone | GMT-3 |
| Population | 3,489,392 |
| Border Countries | Argentina & Brazil |
| Continental surface | 176.215 km² |
| Fiscal Year | Calendar year |
| VAT % | 22% standard
10% applies to certain goods and services such as basic food |
| Minimum Wage | 10,000 Uruguayan pesos per month (approximately $226 USD) |
| Taxpayer Identification Number Name in the country | DGI |
| Current President | Luis Lacalle Pou |
What you need to know about employing personnel in Uruguay:Laws and Agencies that regulate labor relationships
| Laws | Brief Description |
| Constitution of Uruguay | Constitución de la República Oriental del Uruguay is the supreme law of Uruguay |
| Labor Code | Uruguayan Labor Law |
| Tax Code | Uruguay Ministry of Labor and Social Security |
| Social Security | Uruguay Ministry of Labor and Social Security |
Key Tax and Labor Authorities
| Uruguay Ministry of Labor and Social Security | They overlook security in workplaces |
Labor Contracts
| Executive decree (No. 42522-MTSS) | |
| Contracts | There is no legal obligation to put things into a contract in this country. |
| Ministry of Labor and Social Security | This sector overlooks employment laws in this country |
| Work Hours | 8 hours per day 48 hours per week except for retail workers who are capped at 44 hours |
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.
| Minimum Wage (National Council on Wages) | 10,000 Uruguayan pesos per month (approximately $226 USD) |
| Wages | Minimum wage is 17,930 Uruguayan pesos |
| Overtime | Double the normal pay rate on a normally scheduled workday.
Two and a half times when it’s scheduled as a non-working day. |
| Christmas Salary (13th salary) | Bonus is equal to one month’s salary It is payable in two installments, in June then December. |
| Vacations or PTO | All workers hired by individuals or a business are entitled to 20 days of annual paid leave |
| Leaves of Absence Employees have the right to paid absences for the following things: | Maternity leave:
12 weeks Paternity leave:
3 days Marriage Leave:
3 days Study leave for university students:
6, 9 or 12 days per year based on the number of work hours during the year Bereavement Leave:
3 days Leave for union activities
Based on the union’s collective agreement |
Employers Contribution or Labor Cost
Annual Taxable Income
| Over this amount | Not over this amount | Tax % on Excess |
| 0 | 409,080 | 0% |
| 409,080 | 584,400 | 10% |
| 584,400 | 876,600 | 15% |
| 876,600 | 1,753,200 | 24% |
| 1,753,200 | 2,922,000 | 25% |
| 2,922,000 | 4,383,000 | 27% |
| 4,383,000 | 6,720,600 | 31% |
| 6,720,600+ | | 36% |
Corporate Tax Rates
| Taxable Gross Income | Tax Rate |
| All corporations operating within Uruguay, regardless of residency, are subject to taxes on Uruguayan sourced income. | 25%. |
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
Public holidays observed in Uruguay:| Date | Holiday Name |
| 1 January | New Year’s Day |
| 6 January | Three Kings Day |
| 15 & 16 February | Carnival |
| Thursday before Easter Sunday | Maundy Thursday |
| Friday before Easter Sunday | Good Friday |
| 19 April | Disembarkation of the 33 Orientals |
| 1 May | Workers’ Day |
| 17 May | Battle of Las Piedras |
| 19 June | Birth of Artigas |
| 18 July | Constitution Day |
| 25 August | Independence Day |
| 11 October | Columbus Day |
| 2 November | All Souls Day |
| 25 December | Christmas Day |
Termination
The Labor Code outlines rules for termination of an employment contract:
| Type of Termination | Brief Description |
| Justified Dismissal or For a Cause | In general dismissal is allowed without providing any cause, provided that severance indemnity is paid Inclusively there is no obligation of a notice prior to dismissal |
| Unjustified Dismissal or Without Cause | In Uruguay there is no legal definition of unfair or unjustified dismissal Doctrine and jurisprudence (although not a source of law in Uruguay) have created the category: abusive dismissal Abusive dismissal is for those cases of notorious abuse by the employer when dismissing a worker
Such as:
offending worker´s dignity
shouting or insults
dismissal as a consequence of testifying against the employer at a labor court In these cases, apart from the regular severance indemnity, if the employee proves the case at Court, the employer is obliged to pay pain and damages. Those damages will be one to three times the usual severance amount plus regular severance indemnity |
| Voluntary Resignation | Resignation is always free and voluntary If there is any breach by the employer or conduct that forces the employee to resign it is not a resignation but an indirect dismissal |
Other forms of compensation upon termination: Severance pay grades are based on the following table:
| Length of Employment | Severance Amount |
| 0-30+ | Three (3) months’ salary for each year |
