Countries › Uruguay › Guide › 15. Exiting › Returning capital without closing: capital reductions, redemptions and creditor rights

Returning capital without closing: capital reductions, redemptions and creditor rights

Last verified: 2026-10-27 · Status: Stable

An S.A. can return paid in capital to a foreign parent through an extraordinary meeting resolution, ten days of publications and a 30 day creditor opposition window before payment. Reductions to absorb losses, mandatory reductions and redemptions out of profits or free reserves skip the creditor stage, while dissenters may withdraw within 30 days unless the company is listed. The redemption gain is exempt from IRNR and capital refunds are not IRAE income, but reserves created for tax benefits are recaptured and payouts above UI 200,000 must go by bank transfer.

USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026. UI amounts use UYU 6.6792 per UI, the BCU quotation for 27 October 2026. Both were retrieved from the BCU quotations service on the verification date; conversions are for orientation only.

Key facts

Publication period for a voluntary capital reduction	10 daysLey 16.060 art. 294, as of 2026-10-27 · in force
Creditor opposition period after publication of a voluntary capital reduction	30 daysLey 16.060 art. 294, as of 2026-10-27 · in force
Mandatory capital reduction trigger	Losses absorb reserves and 50 percent of paid in capital textLey 16.060 art. 293, as of 2026-10-27 · in force
Withdrawal (receso) notice period after a capital reintegration resolution	30 daysLey 16.060 art. 363, as of 2026-10-27 · in force
IRNR on redemption gains in IRAE taxpayers	Exempt textT.O. 2023 Title 8 art. 19 literal D), as of 2026-10-27 · in force
Cash limit on capital refunds and similar payments	200000 UILey 19.210 art. 35, as of 2026-10-27 · in force

The rule

1. The extraordinary shareholders' meeting of an S.A. may reduce paid in capital, by redeeming shares or by lowering their par value with a bylaw amendment, treating shareholders equally; if paid in capital falls below 25 percent of the authorized capital, the latter must be amended. A voluntary reduction needs, where applicable, a reasoned report of the síndico or comisión fiscal. Resolutions on reintegration of paid in capital need the absolute majority of voting shares (unless the bylaws require more) and an extract is published once in the Diario Oficial and another newspaper.
Cost to do it: Publication costs in the Diario Oficial and another newspaper; no official fee in the law.
Example: A foreign parent returning UYU 4,021,400 of paid in capital of its S.A. passes an extraordinary meeting resolution by absolute majority of voting shares. / US$100,000 capital return, same approval.Ley Nº 16.060 (Commercial Companies Law), Art. 290, art. 291 and art. 362.1 (as worded by Ley 17.243 art. 59), 2000-06-29 official text · verified 2026-10-27

2. The reduction resolution must be published for ten days, with the documents available to creditors, who have 30 days from the last publication to oppose by formal notice; the reduction can then proceed only once opposing creditors are paid or adequately secured, and a court settles disputes on the guarantee by an unappealable decision. Holders of negotiable obligations must approve beforehand. These requirements do not apply to reductions to absorb losses, mandatory reductions or redemptions of fully paid shares out of profits or free reserves, and the bylaw amendment is processed only after the creditor stage ends.
Cost to do it: Ten days of publications and a 30 day waiting period before payment.
Example: The UYU 4,021,400 can be paid out only after about six weeks (10 days of notices plus 30 days for opposition). / US$100,000 paid about six weeks after the first notice.Ley Nº 16.060, Art. 292 to art. 295, 1989-09-04 official text · verified 2026-10-27

3. Reductions to restore balance after losses are allowed, and a reduction is mandatory when losses absorb the reserves and 50 percent of paid in capital; losses that cut equity below one quarter of paid in capital are a dissolution cause unless capital is restored or reduced.
Cost to do it: No creditor procedure for these reductions (art. 294 last paragraph).
Example: A company with UYU 4,021,400 of paid in capital and no reserves whose losses reach UYU 2,010,700 must reduce capital. / US$100,000 capital, US$50,000 of losses: mandatory reduction.Ley Nº 16.060, Art. 292, art. 293, art. 159 numeral 6) and art. 160, 1989-09-04 official text · verified 2026-10-27

4. Shareholders who vote against, abstain or are absent may withdraw (receso) from a resolution to reintegrate paid in capital, by formal notice within 30 days of the last publication; if any do, a new extraordinary meeting within 60 days decides whether to keep the resolution. In listed open companies a capital reintegration does not give a withdrawal right.
Cost to do it: Withdrawing shareholders are paid their participation value.
Example: A 20 percent minority that objects to a capital return can exit at book value instead. / Same mechanics at any amount.Ley Nº 16.060, Art. 362.1, art. 362.3 and art. 363, 2000-06-29 official text · verified 2026-10-27

5. For the shareholder, gains from redemptions (rescates) in the equity of IRAE taxpayers are exempt from IRNR; for the company, capital contributions, reintegrations and redemptions are not IRAE gross income. However, reserves created to obtain tax benefits cannot be distributed except on sale or closure of the business or as share dividends, and capital redeemed or reserves distributed in breach of the conditions of a tax benefit are IRAE income of the year the distribution is approved.
Cost to do it: No IRNR on a redemption gain; IRAE recapture where benefit conditions are broken.
Example: Returning UYU 4,021,400 of contributed capital to the foreign parent bears no IRNR; distributing a reserve created for an investment exemption would be taxed in the company. / US$100,000 capital back tax free; reserve recapture taxed at the 25 percent IRAE rate.Texto Ordenado 2023 (DGI), Title 8 IRNR and Title 4 IRAE; Decreto Nº 150/007, Title 8 art. 19 literal D); Title 4 art. 25 literal H) and art. 29 literal B); Decreto 150/007 art. 23, 2007-04-26 official text · verified 2026-10-27

6. Capital refunds, redemptions, reductions and similar payments by commercial companies are subject to the cash limit: cash may be used only up to UI 200,000, or 5 percent of the total if that does not exceed UI 450,000, with the UI converted at the first day of each month; the rest must be paid by other means.
Cost to do it: Bank transfer costs.
Example: UI 200,000 is about UYU 1,335,840. / About US$33,218.Ley Nº 19.210, art. 35 as worded by Ley Nº 20.469, Art. 35, 2026-03-19 official text · verified 2026-10-27 · changed: Ley Nº 20.469 of 19 March 2026, art. 3, gave art. 35 its current wording, which applies the cash limit expressly to capital refunds, redemptions and reductions of commercial companies.

Route	Creditor publication and 30 day window	Withdrawal right	Tax for a foreign shareholder
Voluntary reduction returning capital	Yes	Yes (except listed open companies)	Redemption gain exempt from IRNR
Reduction to absorb losses	No	Per art. 362	No payment
Mandatory reduction (losses over reserves and 50 percent of capital)	No	Per art. 362	No payment
Redemption of fully paid shares out of profits or free reserves	No	Per art. 362	Redemption gain exempt from IRNR (Title 8 art. 19 literal D))

Capital reduction routes for an S.A. (Ley 16.060 art. 290 to 295 and 362 to 363)

Worked example

Capital return: the foreign parent of an S.A. with UYU 8,042,800 (US$200,000) of paid in capital returns UYU 4,021,400 (US$100,000). Timeline: resolution, ten days of publications, 30 days for creditor opposition, payment by bank transfer. IRNR on the redemption gain: none under Title 8 art. 19 literal D).
Profits first: if the company also has UYU 4,021,400 of IRAE taxed retained profits, paying them as a dividend costs 7 percent IRNR (UYU 281,498, US$7,000), while leaving them for more than three years triggers the same 7 percent as a deemed dividend.

Step by step

Check reserves and accumulated losses: the legal reserve must be restored before profits can be distributed (Ley 16.060 art. 93 and 98).
Obtain the síndico or comisión fiscal report where the company has one (art. 291).
Pass the extraordinary meeting resolution and publish the extract (art. 362.1).
Publish for ten days and wait 30 days for creditor opposition; pay or secure any opposing creditor (art. 294).
Handle any withdrawal notices received within 30 days (art. 363).
Amend the bylaws and register, then pay by bank transfer above the cash limit (art. 295; Ley 19.210 art. 35).
Report changes in shareholdings to the BCU beneficial ownership register where percentages change (Decreto 166/017 art. 11).

Common traps

Returning capital while IRAE taxed profits stay undistributed does not stop the deemed dividend clock on those profits (Title 8 art. 14).
Distributing reserves created for tax benefits is recaptured as IRAE income (Title 4 art. 25 literal H); Decreto 150/007 art. 23).
An opposing creditor can block payment until paid or secured, even if its debt is not yet due (art. 294).
Dividends and other profit distributions need the DGI annual certificate; the fine for distributing without it is 50 percent of unpaid tax (T.O. 2023 Title 1 art. 149 literal B)).

Sources

← Dissolving and liquidating a solvent Uruguayan company (S.A., SRL and SAS)Taking profits out before an exit: dividends, deemed dividends and the 2026 change →