CORPORATE FEATURES OF A SAFI
A SAFI is an excellent offshore tool for those interested in doing international business or providing a wide variety of financial services to others. We have compiled this information in order to give you a better understanding of just how a SAFI can be if use to you.
GENERAL
Political Stability - Good
British Based Legal System - No
Type of Company - SAFI
Disclosure of Beneficial Owner - No
Migration of Domicile Permitted - No
Tax on Offshore Profits - 0.3%
Non-English Language Names Allowed - Yes
CORPORATE REQUIREMENTS
Minimum Number of Shareholders - One
Minimum Number of Directors- One
Bearer Shares Allowed - Yes
Corporate Directors Permitted - Yes
Company Secretary Required - Yes
Standard Authorised Share Capital - $50,000
LOCAL REQUIREMENTS
Registered Office/Agent - Yes
Company Secretary - No
Local Directors - No
Local Meetings - Yes (AGM)
Government Register of Directors - Yes
Government Register of Shareholders - No
ANNUAL REQUIREMENTS
Annual Return - Yes
Audited Accounts - Yes
RECURRING GOVERNMENT COSTS
Minimum Annual Tax/Licence Fee - Varies
Annual Return Filing Fee - Nil
Type of Company for International Trade and Investment
Offshore Companies are called SAFI (Sociedad Anonima Financiera de Inversion).
PROCEDURE TO INCORPORATE
Submission of Bylaws, together with forms signed by two founders to obtain Bylaws approval. Registration in the Public Registry and publication of bylaws summary in the Official Gazette and a Public Newspaper. Type of company is stated in the Bylaws.
POWERS OF COMPANY
A company incorporated in Uruguay has all the powers of a natural person.
LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
Spanish, but foreign language translations may be obtained.
REGISTERED OFFICE REQUIRED
Yes, must be maintained in Uruguay. All statutory records, including registers of directors, members, charges and the minute book must be held at the Registered Office.
TIME SCALE TO INCORPORATE
30 days.
NAME RESTRICTIONS
A name that is similar or identical to an existing company. A name that is known to exist elsewhere. A name that in the opinion of the Registrar is undesirable or offensive. A name that implies illegal activities or implies Government patronage.
LANGUAGE OF NAME
Can be in any language which uses the Latin alphabet, but the Registrar may request a Spanish translation.
NAMES REQUIRING CONSENT OR A LICENSE
Bank, Buildings Society, Savings, Loans, Trust, Insurance, Assurance, Re-Insurance, Fund Management, Investment Fund, Fiduciary, Broker or their foreign language equivalents.
SUFFIXES TO DENOTE LIMITED LIABILITY
Sociedad Anonima Financiera de Inversion, SAFI
DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
No.
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
AUTHORISED AND ISSUED SHARE CAPITAL
The maximum authorised share capital for the minimum capital duty payable on incorporation is US$30,000. The capital can be in any currency, but the capital duty payable is in Uruguay Pesos based on the exchange rate applicable on the date of Incorporation. The minimum issued capital is US$2,500 or its currency equivalent.
CLASSES OF SHARES PERMITTED
- Registered shares
- Preference shares
- Bearer shares
- Shares with or without voting rights.
BEARER SHARES PERMITTED
Yes
TAXATION
SAFI's are exempted from domestic taxation.
DOUBLE TAXATION AGREEMENTS
Uruguay has not entered into any double taxation agreements.
LICENSE FEES
The Annual License fee, which has to be paid within four months of the end of the company's fiscal year, is calculated on the basis of shareholder's equity and the company's liabilities, as follows:
Shareholders Equity + (Liabilities - Shareholders Equity x 2) = Taxable Base.
License Fee = Taxable Base x 0.3%.
FINANCIAL STATEMENT REQUIREMENTS
All Uruguay companies must prepare financial statements, which have to be audited by a local CPA. These financial statements are published in the Official Gazette and presented to the tax authorities to ensure that the correct amount of license fee has been paid over.
BOOKS
A SAFI must maintain five statutory books at its legal domicile; a minute book (meetings of the board of directors and shareholders), a register of shareholder's meetings, an inventory, a journal ledger and a correspondence record. In practice the latter is not used. In nominative share companies an additional register of nominative shares is maintained.
These books are so called “copybooks”, with numbered pages, that must be certified by the Public and General Register of Commerce. In Uruguay, a system of special carbon copying paper allows the transfer of an impression from a normal sheet of paper to the numbered folio in the copybook. This service is included in our annual fees and they do not impact on the principal or his activity.
ANNUAL ADMINISTRATION
LEGAL DOMICILE
A SAFI must have a legal domicile in Uruguay and a legal agent with sufficient powers to represent it before fiscal and other government authorities.
ORDINARY MEETINGS
The Annual General Meeting of Shareholders must take place in Uruguay each year within the four months following the close of the financial year. At least 50% of the issued shares must be present. The shareholders may be represented by proxy.
The register of shareholders' meetings is kept at the legal domicile of the company. The names of representatives attending the meetings are entered into the register as well as the capital that they represent respectively.
TAX DECLARATION
Within the four months after the close of the financial year, the company must present financial statements to the General Tax Board (DGI) in order to pay the tax, which corresponds, to a licence fee. The information must be presented on forms provided by DGI.
These financial statements must be certified by a Uruguayan Certified Public Accountant.
ANNUAL TAX
SAFIs pay a licence fee of 0.3% calculated as follows:
Shareholders equity i.e. capital plus accumulated profit, plus reserves + (liabilities - (2 X Shareholders Equity)) = taxable base
Taxable base X 0.3% = Annual Licence Fee or tax to be paid
The only motive for the existence of the tax declaration is to control the calculation and payment of the annual tax/licence fee. SAFIs have never been subject to any other control nor audit procedure since the 1948 law was passed.
ACCOUNTING
We are able to provide, through our agents, a complete accounting service based on modern equipment and computing systems. They are able to maintain orderly and adequate accounting records based on the compliance with generally accepted international accounting rules, and to meet international auditing standards.
STRUCTURE OF MANAGEMENT
DIRECTORS
The minimum number of directors is one. They can be natural persons or bodies corporate. They can be of any nationality and need not be resident in Uruguay.
COMPANY SECRETARY
Although there is no statutory requirement for a Uruguay company secretary a Uruguay company may have a company secretary appointed. They can be natural persons or bodies corporate. They can be of any nationality and need not be resident in Uruguay.
SHAREHOLDERS
The minimum number of shareholders is two. They can be natural persons or bodies corporate. They can be of any nationality and need not be resident in Uruguay.
ACTIVITIES
INVESTMENT HOLDING
SAFIs were originally designed to hold investments on their own account or for the account of third parties. They are ideal vehicles for the holding of investments of any nature in third countries. Uruguay is an attractive platform for investment into Latin America, and is not generally recognised as a tax haven jurisdiction in Europe.
SAFIs may not maintain investments in Uruguay with exception of deposits in foreign currency in banks or investments in public debt, or mortgage of municipal bonds issued by the Uruguayan government.
TRADING
SAFIs may also be used for trading activities, i.e. re-invoicing. They can be attractive vehicles for triangular operations between countries especially members of ALADI (such as Brazil, Chile and Argentina). They cannot be used to import products into Uruguay, even if such products are destined for re-export. If the latter is an objective, then consideration should be given to the use of a Free Trade Zone company, details available on request.
SAFIs are ideal for invoicing services, marketing research in respect of the viability of business in Latin America, and for collecting export and/or import commissions related to commercial exchange with Latin America.
CAPTIVE INSURANCE COMPANIES
A popular use for SAFIs is as Captive Insurance and Re-Insurance Companies. SAFIs are permitted to conduct offshore insurance activity although it is important to remember that unlike many jurisdictions these insurance companies will not be regulated by any special insurance authority.
OTHER USES AND APPLICATIONS
SAFIs may be used for nearly any activity worldwide, except in Uruguay.
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