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Benefits of Making Business in Uruguay | Buy & Sell Business

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Benefits of Making Business in Uruguay | Buy & Sell Business

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  1. BENEFITS OF MAKING BUSINESS IN URUGUAY WWW.MERGERSCORP.COM

  2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

  3. BENEFITS OF MAKING BUSINESS IN URUGUAY WWW.MERGERSCORP.COM

  4. Country Overview Uruguay has traditionally been more affluent than other countries in South America, and is known for its advanced education and social security systems and liberal social laws. It was the first nation in Latin America to establish a welfare state, maintained through relatively high taxes on industry, and developed a democratic tradition that earned it the sobriquet "the Switzerland of South America". By the end of the year the rebels had been crushed, but the military continued to expand its hold throughout the government. Civilian rule was not restored until 1985. Uruguay's political and labor conditions are among the freest on the continent. But economic and political turmoil, in particular left-wing urban guerrilla attacks in the early 1970s, led the government of the day to suspend the constitution and launch a period of repressive military rule that lasted until 1985.Since the restoration of democratic government, successive governments have liberalised the economy. Colonial towns, beach resorts and a year-round mild climate have contributed to a growing tourist industry.

  5. Executive Summary Uruguay, officially the Oriental Republic of Uruguay, a country on the South Atlantic Ocean coast of southern South America, south of Brazil, it borders Argentina in west. With an area of 176,000 km², the country is the second-smallest nation (after Suriname) in South America, but still almost twice the size of Portugal or slightly smaller than the U.S. state of Washington. Uruguay has a population of 3.25 million inhabitants (2011 census) of whom 1.3 million live in the capital and largest Montevideo, the majority of the country's population resides in the southern half of the country. Official language is Spanish. The mostly flat topography of Uruguay is the transition of the landscape between the Argentine plains in west to the hilly lands of southern Brazil. Extensive plains are found along the country’s eastern, southern, and western borders, with fertile coastal lowlands, the interior consists of rolling plains and hills. The country's highest point is Cerro Cathedral with just 514 m.

  6. Introduction – Doing business in Uruguay Uruguay is a country located between Argentina and Brazil, with a democratic tradition and social and political stability. It fully integrates Mercosur, (200 million inhabitants) and it has had continued growth and investment, since new laws have come into effect to make investment more attractive. Besides, it counts the highest internet, mobile and PC penetration in Latin America. For these reasons is a safe, reliable and competitive location, providing an unbeatable logistics base in the heart of the wealthiest region of South America. However, there are a number of issues, which you must consider when you are looking to set up your business in Uruguay. This document takes you through some of the common questions we come across and gives you practical information about the issues you need to consider. Based on political stability, clear and solid rules, a well-trained labour force along with international conditions, foreign investment has jumped hitting almost 5% of GDP in recent years. Investments in food production facilities, pulp mill, agricultural and retail business fueled the economy.

  7. Conducting business in Uruguay Uruguay Limited Liability Company (LLC) A Uruguay Limited Liability Company (LLC) is the only totally tax exempt corporation entity in all of South America. Most foreigners creating new companies in Uruguay prefer the private limited liability company because they can be 100% foreign owned. The Sociedad Anónima Uruguay (SAU) is a private limited liability company. Normally, a SAU is used to possess assets, engage in trading operations, and act as a holding company. Uruguay has been an independent republic in South America since 1825. It is located between Argentina and Brazil. For the past 20 years, Uruguay has been a growing international financial center. Political stability, strong banking structure, good communication infrastructure, and a favorable tax regime all make Uruguay appealable to foreign investors. Its political system consists of three branches: executive, legislative, and judicial. Free elections are held every five years where the President is chosen who maintains a cabinet of 12 members. The General Assembly is similar to many Parliaments with a Lower Chamber of Representatives and an Upper Chamber of Senators

  8. Taxation in Uruguay IRNR is levied on Uruguayan gross income at rates that vary from 7% to 25%. Income obtained by entities resident, domiciled, or located in low or no-tax jurisdictions (LNTJs) is taxed at 25%. This tax is mainly collected by way of withholding. Uruguay's wealth tax is impuesto al patrimonio. It's based on the net worth of your holdings in Uruguay. For individuals, this is usually your home and other real estate you may own in Uruguay. It's a progressive tax that starts at 0.7% and goes up to 2.8% of a property's registered value. In Uruguay, capital gains on a property sale is considered the same as any income from capital assets. So, the rate is 12% of the gain. The gain is calculated as the difference between the purchase price and the sale price. In Uruguay, the gain is also adjusted for inflation. Social Security Taxes As an employee in Uruguay, you’ll pay into Uruguay’s social security system. Both the employer and the employee pay a portion of the total contribution. The employer’s part is an amount equal to around 12 percent of your earnings. Your part, as an employee, ranges between 19% and 24% of your earnings.

  9. Trade Uruguay is the 87th largest export economy in the world and the 51st most complex economy according to the Economic Complexity Index (ECI). In 2017, Uruguay exported $8.85B and imported $9.7B, resulting in a negative trade balance of $867M. In 2017 the GDP of Uruguay was $56.2B and its GDP per capita was $22.6k. The top exports of Uruguay are Sulfate Chemical Woodpulp ($1.43B), Frozen Bovine Meat ($1.14B), Soybeans ($671M), Rice ($464M) and Bovine Meat($391M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($955M), Refined Petroleum ($683M), Cars ($416M), Broadcasting Equipment ($290M) and Delivery Trucks ($217M). The top export destinations of Uruguay are China ($2.02B), Brazil ($1.32B), the Netherlands ($492M), the United States ($474M) and Argentina ($452M). The top import origins are Brazil ($2.45B), China ($1.71B), Argentina ($1.18B), the United States ($975M) and Mexico ($231M).

  10. Banking in Uruguay The Banco Central del Uruguay regulates and supervises all financial institutions and banks in Uruguay. It is also responsible for managing monetary, credit, and currency exchange in accordance with the law. Uruguay’s financial system is greatly dependent on banks, offshore banks, foreign banks, and representative offices that require permission from the central bank to operate within the country. Banco Santander Uruguay S.A. Banco Santander Uruguay started its operations in 1978, providing a wide range of credit solutions to individuals and corporate clients through more than 30 branches. Headquartered in Montevideo. the bank operates a subsidiary of Banco Santander, a Spain-based group. HSBC Bank (Uruguay) S.A. HSBC, one of the world’s largest banking and financial services organizations, established its presence among banks in Uruguay in 1977 with headquarters in Montevideo. It used to be called National Bank of New York Uruguay S A. It operates as a subsidiary of HSBC Latin America Holdings (UK) Limited and offers a wide range of financial products and services that can be tailored based on customers’ needs.

  11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

  12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

  13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com

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