How to pay a US company legally from Uruguay
Uruguay has emerged as a stable and attractive hub for entrepreneurs and digital nomads in Latin America, creating a growing corridor of cross-border payments to the United States. For Uruguayan founders and diaspora business owners, understanding the legal pathways to remit funds to US entities is essential for maintaining compliance and optimizing operational costs.
The short answer
The fastest legal path to pay a US company from Uruguay is through digital payment platforms like Wise Business or Payoneer, which offer lower fees and faster processing times compared to traditional SWIFT wire transfers. Payments for technical services rendered abroad by a US company may be subject to a non-resident withholding tax (IRNR) of up to 12%, though effective rates can be lower depending on the nature of the service and its association with Uruguayan-sourced income.
For a detailed comparison, see our full Payoneer vs Wise comparison.
Does Uruguay have a US tax treaty?
The United States and Uruguay do not have a comprehensive income tax treaty in place [1]. However, they do share a Tax Information Exchange Agreement (TIEA) and a totalization agreement to prevent double social security taxation [2]. Practically, the absence of a double taxation treaty means there is no treaty-based relief for withholding tax (WHT) rates on payments made to US companies.
Under Uruguayan domestic law, the Non-Resident Income Tax (IRNR) applies to Uruguayan-sourced income obtained by non-residents. The general WHT rate is 12% [3]. Specifically:
- Dividends: Taxed at 7% if paid from taxable income [3].
- Interest: Taxed at rates ranging from 0.5% to 12%, depending on the currency and term of the deposit or loan [3].
- Royalties: Generally subject to a 12% WHT [3].
- Services: Technical services rendered abroad but associated with taxable income in Uruguay are subject to WHT. If the local user's taxable income does not exceed 10% of its total income, the effective WHT rate can be reduced to 0.6% (5% of the 12% rate) [3].
The central bank and FX rules
The Central Bank of Uruguay (Banco Central del Uruguay, or BCU) oversees the financial system and payment regulations [4]. Uruguay operates with an open capital account and does not impose foreign exchange (FX) controls or restrictions on the movement of capital [5]. International transactions can be freely completed in US dollars [6].
While there are no FX restrictions, the BCU and local financial institutions enforce strict Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Outward payments require proper documentation, typically including invoices, contracts, and proof of the source of funds. Processing times for international wire transfers generally range from 1 to 5 business days, depending on the intermediary banks involved [7].
Step-by-step: how to pay a US company
- Open a Business Account: Establish a corporate bank account in Uruguay or set up a business account with an international payment platform like Wise or Payoneer.
- Request an Invoice: Obtain a formal, detailed invoice from the US company, clearly stating the services provided, the amount due in USD, and their banking details (including SWIFT/BIC or routing numbers).
- Determine Withholding Tax: Consult with a local tax advisor to determine if the payment is subject to IRNR (Non-Resident Income Tax) and calculate the applicable withholding rate.
- Prepare Documentation: Gather necessary documents, such as the commercial contract and the invoice, to satisfy your bank's AML/KYC requirements for international transfers.
- Initiate the Transfer: Submit the payment request through your bank's corporate portal or your chosen digital payment platform, ensuring all beneficiary details are accurate.
- Pay the Withholding Tax: If applicable, declare and remit the withheld tax to the Uruguayan Tax Office (DGI) by the following month.
- Retain Records: Keep copies of the invoice, transfer receipt, and tax payment confirmation for at least five years to comply with local accounting and tax regulations.
Best payment rails for this corridor
| Payment Method | Typical Fees | Processing Speed | Best For |
|---|---|---|---|
| Wise Business | Low fixed fee + small conversion markup (approx. 1-2%) | 1-2 business days | Cost-effective, transparent transfers for SMEs |
| Payoneer | Flat fee (e.g., $1.50 - $3.00) or up to 3% depending on funding source | 1-3 business days | Freelancers and B2B payments with existing Payoneer accounts |
| SWIFT Wire Transfer | $30 - $50+ (plus potential intermediary bank fees) | 2-5 business days | Large, high-value corporate transactions |
| Western Union Business | Variable exchange rate markup and transfer fees | 1-3 business days | Alternative corporate payments |
Common compliance mistakes
- Ignoring Withholding Tax: Failing to withhold and remit the IRNR on payments for technical services or royalties, leading to penalties from the DGI.
- Inadequate Documentation: Attempting to send large transfers without proper invoices or contracts, resulting in delayed or rejected payments by the bank's compliance department.
- Misclassifying Services: Incorrectly categorizing the type of service received, which can alter the applicable withholding tax rate.
- Overlooking Intermediary Fees: Not accounting for correspondent bank fees in SWIFT transfers, causing the US company to receive less than the invoiced amount.
What Keystone Bridge clients in Uruguay do
Keystone Bridge helps founders in Uruguay set up a US entity, such as a Delaware LLC, to streamline their international operations. By establishing a US presence, Uruguayan entrepreneurs can pay US vendors domestically, access US banking infrastructure, and receive global payments more efficiently, bypassing the complexities of cross-border wire transfers.
References
- Uruguay — Individual — Taxes on personal income — PwC Tax Summaries
- US Treasury: Agreement between US and Oriental Republic of Uruguay
- PwC Tax Summaries: Uruguay - Corporate - Withholding taxes
- Uruguay Trade Financing — International Trade Administration
- IMF eLibrary: Uruguay: Central Bank Transparency Code Review
- International Trade Administration: Uruguay - Trade Financing
- Stripe: How long does an international wire transfer take?