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Hiring employees & recruitment requirements in Uruguay


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Uruguay is home to a vast array of attractive business sectors, and the country has a highly educated local population. These two factors create an enticing business environment for foreign companies looking to establish operations in the region.

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Hiring employees & recruitment requirements in Uruguay

  1. 1. Recruitment & Hiring Requirements in Uruguay
  2. 2. Key Considerations: Employment Find below some of the key considerations that should be taken into account before contracting staff in Uruguay. Max employer contribution is 23.125% Total cost of employment • Pension contribution • Health insurance social security • Unemployment insurance • Work related injures and/or illnesses coverage • Special leave (maternity, study, death of a relative, marriage, etc.) Employee benefits Yes, 3 months maximum Is there an employee probation period? 1.66 days of vacation per month worked. Vacation entitlement Employers - they must also pay employee’s social security Who manages withholding tax? Yes Can expatriate staff be hired? Yes Do staff need a local employment contract?
  3. 3. Through a local legal entity Through a PEO solution: Professional Employer Organization Pathways to hiring staff
  4. 4. Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations Forming a Legal Entity in Uruguay In Uruguay, there are (2) main types of legal entities: Corporations (S.A) and Limited Liability Company (SRL)
  5. 5. Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture Professional Employer Organisation International PEO is a method to employ staff without having your own company
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