Setting Up an E-Commerce Business in Uruguay: Company Type, VAT and E-Invoicing
Uruguay offers a favourable environment for e-commerce: first-class connectivity, advanced digital infrastructure, free movement of capital and a relatively clear tax framework for digital businesses. However, setting up an e-commerce company in Uruguay and operating correctly from a tax point of view requires well-informed decisions about the company type, the tax regime and electronic invoicing obligations with DGI. In this guide we answer the most frequent questions from people who want to start an online business in Uruguay.
Do I Need a Company to Do E-Commerce in Uruguay?
The short answer: it depends on the volume and scale of the business. In Uruguay an individual can carry on commercial activity — including selling online — as a sole proprietor registered with DGI. However, above certain revenue levels and scale, a company structure becomes more efficient both for tax and operational reasons.
The factors that most influence the decision to set up a company rather than operate as a sole proprietor are:
- Projected sales volume and how fast the business will grow.
- The need to separate personal and business assets to limit liability.
- The possibility of bringing in partners or investors in the future.
- Image and credibility with suppliers, marketplaces and institutional clients.
- Tax efficiency depending on revenue and the ability to deduct real expenses under IRAE.
E-Commerce in Uruguay: Sole Proprietorship vs. SRL vs. SAS
Choosing between operating as a sole proprietor or setting up an SRL or SAS in Uruguay for e-commerce is one of the most common decisions for those starting an online business.
Sole proprietorship (individual):
- No company incorporation or maintenance costs.
- Taxed under the small business regimes (Monotributo or minimum VAT) while revenue is small, or under IRAE and VAT in the general regime.
- No separation between personal and business assets: the owner is liable with all their assets for the business’s debts.
- Suitable for small businesses or those validating an idea, but with limits on growing, raising investment or selling to companies.
SRL for e-commerce in Uruguay:
- Asset separation between partners and company: partners are liable only up to their contribution.
- Lower incorporation and running costs than an SA.
- Suitable for online stores with one or a few partners who know each other (an SRL needs at least two partners).
- Taxed under IRAE (25% of net income), with the ability to deduct real business expenses.
SAS for e-commerce in Uruguay:
- The most modern and flexible company type, ideal for digital businesses and e-commerce startups; it can have a single shareholder.
- Simpler and cheaper to incorporate than an SA.
- More flexible articles to structure ownership and rights among founders.
- Same tax regime as the SA or SRL (IRAE), and no ICOSA.
- Especially recommended for online businesses planning to scale, raise investment or bring in partners in the future.
How to Set Up an Online Store in Uruguay as a Company
The process to set up a company for an online store in Uruguay follows the standard steps of any incorporation, with some considerations specific to the digital sector:
- Choosing the company type: SAS for growing digital businesses, SRL for more traditional online stores with known partners.
- Defining the corporate purpose: it should expressly include e-commerce, the sale of goods or services through digital platforms and any related activity (logistics, digital marketing, etc.).
- Incorporation before a notary (SA/SRL) or by private document (SAS): with articles defining the capital distribution and how the company operates.
- Registration with the DGR and legal publications where applicable.
- Obtaining the RUT from DGI: with the economic activity correctly classified (online retail, digital services, etc.).
- Enabling electronic invoicing: obtaining the digital certificate and an electronic invoice (CFE) issuing system authorised by DGI.
- Opening a business bank account: needed for digital payment methods, payment gateways and international transfers.
- Trademark registration: if the business operates under its own brand, registering it with the DNPI protects e-commerce’s most valuable intangible asset.
E-Commerce Taxation in Uruguay: VAT and IRAE
E-commerce taxation in Uruguay generally follows the tax regime of any commercial activity, with some features specific to the digital environment.
VAT in Uruguayan e-commerce:
Sales of goods or services through digital channels to final consumers in Uruguay are subject to VAT at the same rates as in-person sales: a basic rate of 22% for most products and services and a reduced rate of 10% for certain goods (staple foods, medicines, etc.).
Another relevant point is that certain digital services provided from abroad to Uruguayan consumers (audiovisual streaming, intermediation platforms, etc.) are subject to VAT under the rules introduced in 2018, through registration of the foreign provider or collection mechanisms involving payment methods.
IRAE in e-commerce:
Uruguayan e-commerce companies pay IRAE at 25% on their net income. IRAE allows deducting the expenses necessary to generate taxable income: cost of goods, logistics, storage, digital advertising, hosting, platform fees, salaries, etc. As a result, the effective tax base is significantly lower than gross revenue.
For entrepreneurs with low volumes, the simplified small business regimes (Monotributo or minimum VAT) may apply, with a lighter administrative burden but no deduction of real expenses.
DGI Electronic Invoicing for Online Stores in Uruguay
Electronic invoicing is mandatory in Uruguay for companies, including online stores. Since DGI generalised the electronic tax document (CFE) system, an e-commerce company cannot legally invoice on paper.
The most relevant aspects of electronic invoicing for an online store in Uruguay are:
- Document types: the company must issue e-Tickets (for sales to final consumers) or e-Invoices (for sales to other companies, with itemised VAT), depending on the client.
- Integration with the sales platform: the most widely used e-commerce platforms (WooCommerce, Shopify, Tiendanube) have integrations or plugins that issue CFEs automatically with each sale.
- CFE solution: most companies hire a DGI-authorised e-invoicing provider for issuing and sending documents; DGI also offers a free solution for small volumes.
- Retention of documents: issued CFEs must be kept for the period set by tax rules (generally 5 years).
- Reporting: DGI receives issued documents in real time, allowing automatic cross-checking with tax returns.
E-Commerce in Uruguay: Sales Abroad and Taxes
Sales abroad from Uruguay have a favourable tax treatment that is one of the big attractions of export-oriented e-commerce:
- VAT relief on exports: exports of goods and qualifying exports of services are not subject to VAT in Uruguay, with the right to recover input VAT. An online store selling to clients abroad does not charge VAT on those transactions, which improves its price competitiveness.
- IRAE on Uruguayan-source income: income from sales abroad by a Uruguayan company is in principle Uruguayan-source income subject to IRAE, but the available deductions reduce the effective burden.
- Exporting digital services: companies selling software or related services abroad may access the IRAE exemption for software used abroad, subject to the substance rule.
- Customs and international logistics: exporting physical goods from Uruguay requires completing export procedures with the DNA (Customs), with the corresponding logistical and documentary implications.
Marketplaces: Mercado Libre and Taxes in Uruguay
Selling through Mercado Libre or other marketplaces in Uruguay does not exempt the seller from tax obligations. This is a frequent source of confusion:
- Taxes apply regardless of the channel: selling on Mercado Libre, Instagram Shopping or any other marketplace does not change the seller’s tax obligations. A regular commercial activity must be registered and pay the corresponding taxes like any other business.
- Information available to DGI: platforms and payment methods generate information that tax authorities can cross-check, so operating informally through marketplaces carries a growing risk.
- Requirements for professional sellers: sellers with significant volumes are usually asked to prove their status as taxpayers registered with DGI, providing their RUT.
- Electronic invoicing: depending on the sales model, the seller must issue CFEs to the final buyer, and the platform invoices the seller for its commissions and services.
Digital Businesses in Uruguay for Foreigners
Uruguay is especially attractive for foreigners who want to build a digital business with a solid legal base in Latin America. The specific advantages for foreign entrepreneurs in the digital sector are:
- Incorporation without residency: a foreigner can own 100% of a Uruguayan SAS, SRL or SA without living in the country. The company can operate with the support of a local representative or professional.
- A favourable framework for exporting digital services: Uruguayan companies exporting qualifying digital services abroad are relieved of VAT on those sales, and software and related services can access the IRAE exemption under the software regime.
- Free movement of capital: no restrictions on receiving payments from abroad, holding dollars in Uruguayan bank accounts or repatriating profits.
- Access to international payment gateways: a Uruguayan company can access PayPal Business, Stripe, Payoneer and other international gateways more easily than from many other countries in the region.
- Tax benefit for new foreign residents: founders who become tax residents in Uruguay may opt for a tax holiday on certain foreign income, under the conditions of Law 20,446 (183 days of presence or a qualifying investment), which is relevant for those with income in other countries while building their Uruguayan business.
Requirements to Operate a Marketplace in Uruguay
If the business model is not just selling but running a marketplace in Uruguay — a platform connecting sellers and buyers and charging commissions — the additional requirements include:
- A corporate purpose that expressly covers digital commercial intermediation and operating marketplace platforms.
- Compliance with e-commerce and consumer protection rules: Consumer Relations Law No. 17,250 and its regulations set information, returns and warranty obligations that apply to marketplaces.
- Tax obligations as a withholding agent if DGI so establishes for platforms of a certain scale.
- A privacy policy and data protection under Personal Data Protection Law No. 18,331, with registration of databases with the Personal Data Regulatory and Control Unit (URCDP) where applicable.
- Terms and conditions drafted in line with Uruguayan consumer and e-commerce law.
Conclusion
E-commerce in Uruguay operates within a clear and relatively favourable legal and tax framework, especially for export-oriented or digital services businesses. The key to operating correctly is choosing the right company type from the start — with the SAS as the most recommended option for growing digital businesses — complying with electronic invoicing, settling VAT and IRAE correctly and using the available relief for sales abroad.
For foreigners seeking to establish a digital business based in Uruguay, the country offers a combination that is hard to match in the region: legal stability, quality digital infrastructure, free movement of capital and a tax regime that rewards the export of services and products.
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