Castellán

When they have a perspective of continuity, they usually choose to establish themselves as a branch or acquire/constitute a subsidiary, and hire Uruguayan personnel in whole or in part. But when it is for a short period of time, the action is usually direct by the foreign company, usually using their own foreign workers.
This sometimes involves the massive arrival of foreign workers (and their families) to occupy managerial positions or perform technical and specific tasks. And the formulation of endless queries by companies and workers that we intend to clarify.

Does the foreign company need to register with the Tax Authorities?

It depends. As a general rule, the foreign company that arrives in Uruguay with the aim of developing an activity for a short period of time (less than 6 months) must register with the tax authorities of our country as a "foreign company with temporary or accidental activity". This registration is a simple procedure that can be carried out before the activities begin or at the same time as the start. However, it is always advisable to do it as far in advance as possible, since the company will have to provide certain information and documentation. It is important to bear in mind that since the documents will come from abroad, they must be legalized or apostilled (and if they are in another language, they must be translated into Spanish in Uruguay) in order to be valid in our country, which takes a certain amount of time.

However, in practice, many times this registration can be dispensed with. This occurs, for example, in the case that the foreign company carrying out temporary activities in Uruguay invoices its services to a Uruguayan company, in which case the latter will be a withholding agent and as such the payment of taxes will be channeled through that route. Likewise, to dispense with this registration, it would also be essential for foreign workers to be able to be part of the payroll of the Uruguayan company (either through temporary transfer or directly in case of such an agreement between the contracting parties). Otherwise, the registration as a company with temporary or accidental activity will also be required for the foreign company to have its own payroll.

What requirements must foreign workers meet?

Foreign workers have several options on how to legally work in the country, depending on the time they will stay in it. For temporary jobs (up to 180 days), workers must always process the "provisional identity card".

How is the Provisional Identity Card (HPI) processed?

It is a procedure that is carried out in two stages, before two different organizations. The first will be prior to the worker's entry into the country and is carried out at the National Directorate of Migration, as this organization will authorize him to work in the country. The second stage requires the presence of the worker in the country to process and collect the HPI at the National Directorate of Civil Identification.

To start the first stage, a letterhead from the company that will have the worker on the payroll must be presented, which must include: their identifying information, the worker's personal data, the period they will work in Uruguay, and the position they will hold. Eventually, if the temporary transfer system is chosen, it must be expressly stated. Additionally, a notarized certificate with the complete control of the company and a legible copy of the worker's passport and/or identity document (if they are a national of a MERCOSUR country) and of the company representative who signs the Letterhead will be presented.

Is a visa required?

Depending on the nationality and/or origin of the worker's passport, in some cases it may be necessary to apply for a visa before entering Uruguay. In such a case, the visa is requested at the Uruguayan Consulate where the worker is located. If there is no Consulate, at the Uruguayan Embassy in that country.

Must contributions be made to Social Security in Uruguay?

Uruguay has signed International Agreements with certain countries that allow foreign workers who will perform tasks in Uruguay to request their temporary transfer, to avoid making contributions to social security in Uruguay.

Indeed, with the temporary transfer system, double contribution to social security is avoided and the time worked in Uruguay is recognized in the foreign worker's home country. However, this regime is only admitted when provided for in a Social Security Agreement between Uruguay and the worker's country of residence.

Likewise, this temporary transfer regime can only be used for a certain period, established in the International Agreements themselves. Regarding the procedure for requesting temporary transfer, the foreign company from which the worker comes must request it from the social security agency of the worker's home country, with a minimum recommended advance notice of 45 days before their arrival in Uruguay. Then, once the temporary transfer is authorized, the company registered in Uruguay must temporarily incorporate the foreign worker into its Payroll, paying only a premium for the worker to have coverage in case of work accidents and professional illnesses.

Conclusions

As can be seen, the Uruguayan legal system provides adequate solutions for the temporary establishment of foreign companies in Uruguay. It is vital that foreign companies seeking to carry out these temporary activities seek advice well in advance, so that the installation process is as smooth as possible. For this, our firm has experience in providing foreign companies with agile results in these processes.

 

Dr. Valeria Motta

 

Montevideo, May 16, 2018.