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.
The third chapter talks about crowdfunding, a point that will need to be articulated with the Central Bank of Uruguay.
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.