Entrepreneurship Promotion Law

Back to Atlas

Uruguay’s Entrepreneurship Promotion Law (Law No. 19,820) is a comprehensive legislative framework designed to foster entrepreneurial culture, simplify company formation, and promote financing and ecosystem development.
What are the main aims and objectives?

The law aims to stimulate economic growth and job creation by consolidating a state policy that promotes entrepreneurship across Uruguay. It seeks to develop a vibrant entrepreneurial ecosystem, integrate entrepreneurship education throughout the formal education system, facilitate business creation through simplified legal structures, expand access to seed financing—including crowdfunding—and enhance national reach and equity in entrepreneurial support. Central objectives include fostering an entrepreneurial culture, enabling business scaling and internationalization, reducing regulatory barriers, and promoting collaboration among public and private sector stakeholders to build sustainable, competitive ventures.

How does the program work?

The new Uruguayan legal framework enables crowdfunding platforms to operation and establishes the option of startups to set up as simplified joint stock companies.

Known as the "Entrepreneurs Law”, the legislation introduced the following main changes:

1) It defines crowdfunding platforms as trading markets for public offering securities open to the direct participation of investors in small amount issues;

2) It defines the constitution, capital and shares, organization, and dissolution of simplified joint stock companies; 

3) It applies taxation rules of private companies to the simplified joint stock companies; and 

4) It explains the transitional tax provisions for the conversion of sole proprietorships into simplified joint stock companies relating to VAT and property tax.

5) It simplifies the process of setting up a business: For SAS companies, registration costs will be reduced, with an entirely digital registration process and a maximum of 48 hours for registration.

What is the overall cost?

The Entrepreneurship Promotion Law itself does not allocate a dedicated budget but acts as a policy framework. Funding for initiatives under its scope flows through agencies like the National Agency for Research and Innovation (ANII).

How was it implemented?

Law No. 19,820 was enacted on September 18, 2019, following multi-stakeholder policy design processes aligned with Uruguay’s National Plan for Productive Transformation and Competitiveness (Transforma Uruguay). Implementation involved institutional coordination among government bodies, private sector entities, incubators, and educational institutions. Regulatory development established digital registration procedures for SAS companies and frameworks for crowdfunding platform operation. The law mandated creation of a national entrepreneurship promotion system and a comprehensive plan to disseminate entrepreneurial culture nationwide. Complementary programs like ANII’s seed capital and the Uruguay Innovation Hub were integrated as financial pillars. Implementation emphasized digital facilitation, regional equity, and sectoral inclusion, while establishing September 18 as National Entrepreneurship Culture Day to promote awareness annually. Subsequent amendments in 2020 fine-tuned processes and enhanced coordination. Despite policy establishment, ongoing efforts focus on ecosystem consolidation, educational integration, and expanding financing access.

What impact has been measured?

There is currently no available information about the impact of the law. 

What lessons can be learned?
  • The law’s framework approach requires successful coordination among multiple institutions, which can slow implementation and create regional disparities.
  • Absence of a unified, dedicated funding stream strictly tied to the law’s initiatives creates dependency on diverse budgets and donor programs.
  • Digital processes, while reducing formal barriers, may unintentionally exclude entrepreneurs in rural or underserved areas lacking infrastructure or digital literacy.
  • Crowdfunding regulatory complexity presents challenges for nascent platforms and startups unfamiliar with securities compliance.
  • The innovative SAS corporate structure’s contractual governance flexibility necessitates investor sophistication to avoid uneven power dynamics and protect founders.
  • Entrepreneurial education integration depends heavily on educational system adoption, teacher training, and sufficient resourcing, which may vary considerably.
  • Lack of comprehensive impact evaluations limits understanding of the law’s actual effectiveness on employment and economic outcomes.
  • Continued emphasis on equitable access and regional inclusivity is essential to avoid concentration of entrepreneurship in metropolitan centers.
  • Long-term sustainability of incubators, accelerators, and co-investment programs requires ongoing public and private commitment.
  • Future policy iterations could benefit from rigorous data collection, impact assessment, and adaptive strategy adjustment to maximize entrepreneurial ecosystem growth.

CURATED BY

Cristina Fernandez

Director for Knowledge + Programming
Global Entrepreneurship Network
United States