Description of the core change(s) brought by this policy instrument
The new Uruguayan legal framework enables crowdfunding platforms to operation and establishes the option of startups to set up as simplified joint stock companies.
Please list the implementing agencies
The third chapter talks about crowdfunding, a point that will need to be articulated with the Central Bank of Uruguay.
If you marked "start-up" and/or "scale-up" firms, please provide the specific definitions used
Companies that have an annual turnover of less than USD 100,000 (approximate conversion) will be able to register as simplified joint stock companies (known as SAS for its acronym in Spanish). These companies will not be required to have a Board or administrator.
Abstract summary of this Policy resource
Known as the "Entrepreneurs Law”, the legislation introduces 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.
In 2017, the first attempts to articulate a law containing solutions to the barriers reported by stakeholders of the entrepreneurial ecosystem: the bureaucratic and financing difficulties for startups. In collaboration with academia and entrepreneur support organizations, two bills initiated by Congressmen Rodrigo Goñi of the National Party and Walter De León of the Broad Front began to be discussed in Parliament, to promote the development and articulation of the entrepreneurial ecosystem, which finally derived in a single document in 2018.
Finally, on September 11, 2019, the Senate unanimously passed the law. Now the challenge is in the regulation and implementation.