Below we will refer to the main aspects that we must bear in mind when considering Uruguayan Limited Liability Company as holding companies.
What do we understand by holding companies?
These are companies whose assets are mainly made up of shares in other entities. Its usual purpose is to control the shares of other companies to provide financing, collect dividends, interest on loans, royalties, sell the group, among others.
This legal form is usually used by capitalist groups that are acquiring different properties and firms, in order to obtain returns from each one of them but without integrating their particular activities.
As an advantage we can highlight that the transfer of the shares of a company can be carried out with the simple sale of the holding company.
What conditions does Uruguay offer?
The most suitable places to establish this type of company are those where their profits are not taxed (or if it is does is in a small amount) and where the profits obtained abroad, have a low or no tax burden.
Historically, this business modality found refuge in countries with low or no taxation (also known as tax havens).
In recent years, in order to converge towards the international standards of International Tax Transparency, the different countries of the region have proceeded to establish various tax treatments that seek to discourage the use of companies whose jurisdiction is a tax haven.
This last point, leaves open the consultation on the possibility of resorting to Uruguayan Limited Liability Companies as a valid instrument to act as a holding company.
Most relevant aspects to consider:
It is worth emphasizing that the list of countries with low or no taxation has been updated by the Internal Tax Revenue Office of Uruguay (Dirección General Impositiva – DGI) through the Resolution No. 1/020.
Based on the current fiscal framework in our country, the trend with respect to the guidelines of fiscal transparency standards worldwide, and also considering that our financial system ensures the free entry and exit of capital, we understand that Uruguay becomes a good alternative to consider when defining the corporate strategy of a company and establishing a holding company for setting up business.