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What is normal abroad but works differently in Uruguay

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

Uruguay is an open, rules based market, but several habits that foreign investors take for granted at home work differently here, and each has a cost, a ceiling or a deadline written into law. Employers cannot dismiss without paying a statutory indemnity of one month per year up to six months, must pay a 13th salary and a vacation bonus, and follow minimum wages set by tripartite Wage Councils for each activity. Interest has a legal ceiling tied to BCU average rates, cash payments are capped at about UI 200,000 per deal, lawsuits normally start with a compulsory conciliation hearing, owners above 15 percent are reported to the BCU, and consumers can cancel distance sales (10 calendar days from 2027).

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 (BCU, 27 October 2026), except the cash limits, which the law converts at the first day of the month: UYU 6.6516 per UI on 1 October 2026 (BCU). All retrieved from the BCU quotations service on 2026-10-27; conversions are for orientation only.

Key facts

Dismissal indemnity per year of service or fraction	1 months of payLey 10.489 art. 4, as of 2026-10-27 · in force
Dismissal indemnity cap (3 if entitled to retirement)	6 months of payLey 10.489 art. 4, as of 2026-10-27 · in force
13th salary (aguinaldo)	1/12 of annual pay ratioLey 12.840 art. 1 and 2, as of 2026-10-27 · in force
Minimum paid annual leave	20 daysLey 12.590 art. 1, as of 2026-10-27 · in force
Vacation bonus (salario vacacional), minimum	100 % of net leave payLey 16.101 art. 4, as of 2026-10-27 · in force
Usury ceiling markup over BCU average, loans below UI 2,000,000	55 %Ley 18.212 art. 11, as of 2026-10-27 · in force
Usury ceiling markup over BCU average, loans of UI 2,000,000 or more	90 %Ley 18.212 art. 11, as of 2026-10-27 · in force
Usury ceiling, medium companies, non indexed UYU up to 366 days, from 1 Oct 2026	19.809 %BCU Comunicación 2026/188, as of 2026-10-01 · in force
Cash payment ceiling per operation	200000 UILey 19.210 art. 35 (Ley 20.469 art. 3), as of 2026-10-27 · in force
Alternative cash ceiling (if not above UI 450,000)	5 % of operationLey 19.210 art. 35 (Ley 20.469 art. 3), as of 2026-10-27 · in force
Beneficial owner threshold	15 %Ley 19.484 art. 22, as of 2026-10-27 · in force
Days to report a change in non resident registered holders to the BCU	90 daysLey 19.484 art. 25, as of 2026-10-27 · in force
Consumer withdrawal period for distance and off premises sales	5 business daysLey 17.250 art. 16, as of 2026-10-27 · in force
Consumer withdrawal period from 1 January 2027	10 calendar daysLey 20.531 art. 108, as of 2027-01-01 · pending
Unidad Indexada (UI) value	6.6792 UYULey 17.761 art. 1, as of 2026-10-27 · in force

The rule

1. No dismissal at will without cost. An employee who is dismissed is entitled to an indemnity equal to one month of total pay for each year or fraction of a year of service, capped at six months' pay (three months if the worker already qualifies for retirement, which Ley 12.597 defines as more than ten years of recognised service and age 40, or a special retirement right). Day and piece workers get the equivalent in daily wages. Only dismissal for 'notoria mala conducta' (serious misconduct) removes the indemnity, and the employer bears the burden of proving it. An indemnity paid only after a final judgment carries a 1 percent monthly surcharge.
Cost to do it: One month's pay per year or fraction, up to six months. On a monthly salary of UYU 80,000 the ceiling is UYU 480,000 (US$11,936).
Example: An employee earning UYU 80,000 a month dismissed after 4 years and 3 months (five years or fractions) receives UYU 400,000. / UYU 400,000 is about US$9,947; at the six month cap, UYU 480,000 is about US$11,936.Ley Nº 10.489 (commerce employees, dismissal indemnity) and Ley Nº 12.597 (dismissal indemnities), Ley 10.489 art. 4; Ley 12.597 art. 1, 5, 8 and 10, 1944-06-06 official text · verified 2026-10-27

2. Two extra statutory payments every year. Every private employer must pay a 13th salary (aguinaldo, sueldo anual complementario) equal to one twelfth of all remuneration paid in the twelve months before 1 December, within the ten days before 24 December; a proportional amount is due when employment ends for any reason other than serious misconduct, and an employer who fails to pay is fined double the amount owed per worker. Separately, every worker has at least 20 days of paid annual leave, taken in one continuous period, and a vacation bonus (salario vacacional) of at least 100 percent of the net pay for the leave days.
Cost to do it: The aguinaldo adds one twelfth (about 8.3 percent) to annual payroll, and the vacation bonus adds the net pay of at least 20 leave days; both before employer social security contributions.
Example: An employee paid UYU 80,000 a month from December to November receives an aguinaldo of UYU 80,000 in mid December. / About US$1,989 on top of twelve monthly salaries.Ley Nº 12.840 (aguinaldo); Ley Nº 12.590 (annual leave); Ley Nº 16.101 (salario vacacional), Ley 12.840 art. 1, 2, 3 and 7; Ley 12.590 art. 1; Ley 16.101 art. 4, 1960-12-22 official text · verified 2026-10-27

3. Wages are set by sector, not only by the contract. Tripartite Wage Councils (government, employers and workers) fix minimum wages by job category and update the pay of all private sector workers in each activity group, and may also set working conditions where the employer and worker delegates agree. Their decisions bind the whole activity group once registered and published by the Executive Power. The Executive must convene a council within 15 days when a representative organisation of the sector asks; no council is needed where a collective agreement signed by the most representative organisations is in force.
Cost to do it: No filing fee; the cost is compliance with the published category minimums and periodic adjustments for the relevant group, which can exceed the national minimum wage.
Example: A software company and a construction company hiring the same job title can owe different minimum pay and increases, depending on the Wage Council group each belongs to. / Budget USD costs from the group's published scale converted at the BCU rate, not from a single national figure.Ley Nº 10.449 (Wage Councils), as reworded by Ley Nº 18.566 of 11 September 2009 (collective bargaining), Ley 10.449 art. 5 (text given by Ley 18.566 art. 12), 2009-09-11 official text · verified 2026-10-27

4. Interest has a legal ceiling. For loans and discounted documents below the equivalent of UI 2,000,000 (principal, excluding interest), interest is usurious when the implicit rate exceeds by more than 55 percent the BCU average rate for the previous moving quarter for that type of operation; for UI 2,000,000 or more the markup is 90 percent. In default the ceilings rise to 80 percent and 120 percent above the average. Payroll loans (créditos de nómina) are capped at 20 percent and other salary deduction loans at 30 percent above the average. Foreign currency amounts are converted through the US dollar and the UI value at the time the obligation is agreed. For loans to medium sized companies in non indexed pesos up to 366 days, the BCU average for June to August 2026 is 12.78 percent and the published ceiling from 1 October 2026 is 19.809 percent; in US dollars the figures are 5.53 percent and 8.5715 percent.
Cost to do it: No fee; the limit caps pricing. UI 2,000,000 is about UYU 13,358,400 (US$332,183) at the 27 October 2026 UI.
Example: A one year UYU 4,000,000 loan to a medium sized company agreed in October 2026 cannot carry more than 19.809 percent, that is UYU 792,360 of interest for the year; a 22 percent rate would be usurious. / About US$99,468 of principal and at most US$19,704 of interest; a US dollar loan of the same profile is capped at 8.5715 percent.Ley Nº 18.212 (interest rates and usury), as reworded by Ley Nº 19.732 of 28 December 2018; BCU Comunicación Nº 2026/188 (Resolución RR-SSF-2026-601 of 16 September 2026), Ley 18.212 art. 11 (text given by Ley 19.732 art. 22); BCU Recopilación de Normas de Regulación y Control del Sistema Financiero art. 340, 2018-12-28 official text · verified 2026-10-27

5. Cash is capped in every deal. Any payment in any transaction, whoever the parties are, may be made in cash (Uruguayan or foreign notes and coins) only up to UI 200,000, or up to 5 percent of the total value of the operation provided that amount does not exceed UI 450,000; cash is valid if either condition is met, and the balance must be paid by other means such as bank transfer. The same limit applies in commercial companies to capital contributions, irrevocable contributions, advances, capital refunds, profit distributions, redemptions and similar corporate payments. UI amounts are converted at the UI value on the first day of each month.
Cost to do it: No fee; transfers cost only bank charges. In October 2026 UI 200,000 equals UYU 1,330,320 (US$33,081) and UI 450,000 equals UYU 2,993,220 (US$74,432).
Example: On a UYU 40,214,000 purchase in October 2026, cash may cover at most UYU 2,010,700 (5 percent, below the UI 450,000 limit of UYU 2,993,220); the remaining UYU 38,203,300 must be paid by transfer or another non cash means. / On a US$1,000,000 deal, at most US$50,000 in cash; the other US$950,000 by transfer.Ley Nº 19.210 (Financial Inclusion Law), as reworded by Ley Nº 20.469 of 19 March 2026, Ley 19.210 art. 35 (text given by Ley 20.469 art. 3), 2026-03-19 official text · verified 2026-10-27 · changed: Ley Nº 20.469 of 19 March 2026 art. 3 gave article 35 its current wording (cash up to UI 200,000, or 5 percent of the operation up to UI 450,000, extended to corporate capital and profit flows).

6. You must try conciliation before suing. Before starting any lawsuit the claimant must request a hearing to attempt conciliation with the future defendant, before the Juzgado de Paz or Juzgado de Conciliación of the defendant's domicile. It is skipped where the defendant's domicile is unknown or outside the department of the competent court, and does not apply to non ordinary proceedings, interim or preparatory measures, family, lease and labor matters (labor conciliation takes place in the administrative route), consumer claims under Ley 18.507, and other cases the law excludes.
Cost to do it: An extra preliminary step before filing a commercial claim; budget the lawyer's time for the hearing. Court and lawyer fees are not set in these articles.
Example: A supplier owed UYU 2,000,000 by a Montevideo customer first summons the customer to a conciliation hearing in Montevideo and only then files the ordinary claim if no settlement is reached. / The same step applies to a claim of about US$49,734; arbitration clauses are covered in the disputes section.Código General del Proceso (Ley Nº 15.982), as reworded by Ley Nº 19.090 of 14 June 2013, CGP art. 293 and 294, 2013-06-14 official text · verified 2026-10-27

7. Owners are reported to the central bank. Resident entities must identify their beneficial owners, meaning individuals holding directly or indirectly at least 15 percent of capital or votes or exercising final control by other means, with supporting documents. Companies with registered shares, partnerships limited by shares and other entities that issue registered interests must also report to the BCU the identity and percentage of each holder; later changes must be reported within 45 days, or 90 days where the holders are non residents. Hiding the beneficial owner through inappropriate legal forms is fined up to 1,000 times the maximum contravention fine of Código Tributario art. 95.
Cost to do it: No registration fee is set in these articles; the cost is the filing and keeping documents on the whole ownership chain, and the fine exposure for failure.
Example: A Uruguayan S.A. owned 100 percent by a US parent reports the parent as registered shareholder and the individuals behind it holding 15 percent or more; if the parent sells to a new group, the change is reported to the BCU within 90 days. / The thresholds are percentages, so they apply the same to a US$1 million or a US$1 billion company.Ley Nº 19.484 (tax transparency), art. 25 as reworded by Ley Nº 19.924 of 18 December 2020; Decreto Nº 166/017, Ley 19.484 art. 22, 23, 25 and 35, 2017-01-05 official text · verified 2026-10-27

8. Consumers can walk away from distance and off premises sales. When a product or service is offered outside the business premises (post, phone, TV, internet or similar), the consumer may cancel without penalty within five business days from the contract or delivery, the supplier must refund immediately, and if the supplier did not inform the right in writing the consumer may cancel at any time. From 1 January 2027 the period becomes ten calendar days, also counted from the start of a service, and online sellers must show a visible 'Botón de arrepentimiento' (withdrawal button) on first access, which counts as valid notice, and must themselves arrange the card refund or cancellation.
Cost to do it: Refund of the full price on cancellation; each party bears its own return costs. Online stores need a website change before 1 January 2027.
Example: A customer who buys a UYU 30,000 appliance online on 4 January 2027 can cancel until 14 January 2027 through the withdrawal button and must be refunded UYU 30,000. / About US$746 refunded in full.Ley Nº 17.250 (consumer relations); Ley Nº 20.531 (Rendición de Cuentas 2025, promulgated 1 October 2026, published 16 October 2026), Ley 17.250 art. 16; Ley 20.531 art. 2 (in force 1 January 2027) and art. 108 (substitutes art. 16), 2026-10-01 official text · verified 2026-10-27 · changed: Ley Nº 20.531 art. 108, in force from 1 January 2027 under art. 2, replaces the five business day period with ten calendar days and adds a mandatory online withdrawal button.

Common practice abroad	Uruguayan rule	Cost or limit	Rule
Dismissal at will with notice only	Statutory dismissal indemnity unless serious misconduct is proven	1 month per year, up to 6 months	Ley 10.489 art. 4; Ley 12.597 art. 10
Twelve salaries a year	13th salary in December plus vacation bonus	1/12 of annual pay; 100% of net leave pay; 20 days leave	Ley 12.840 art. 1 and 2; Ley 16.101 art. 4; Ley 12.590 art. 1
Pay set by contract and market	Wage Council minimums and adjustments per activity group	Binding once published	Ley 10.449 art. 5
Interest freely agreed between businesses	Usury ceiling above BCU average rates	+55% (below UI 2M) or +90% (UI 2M or more)	Ley 18.212 art. 11
Large deals settled in cash	Cash capped per operation, including capital and dividend flows	UI 200,000, or 5% up to UI 450,000	Ley 19.210 art. 35
File suit straight away	Prior conciliation hearing for most civil and commercial claims	One extra hearing	CGP art. 293 and 294
Shareholder list kept privately	Beneficial owners (15%) and registered holders reported to the BCU	Changes within 45 days, 90 for non residents	Ley 19.484 art. 22 and 25
Returns at the seller's discretion	Statutory withdrawal right for distance sales	5 business days; 10 calendar days from 2027	Ley 17.250 art. 16; Ley 20.531 art. 108

Common practice abroad against the Uruguayan rule

Worked example

Hiring cost check: an employee on UYU 80,000 a month (US$1,989) costs at least 13 monthly salaries a year (12 plus the aguinaldo) plus a vacation bonus, before social security; if dismissed after four years and three months without proven serious misconduct, the indemnity is UYU 400,000 (US$9,947).
Closing a property or share deal of UYU 40,214,000 (US$1,000,000) in October 2026: cash may cover at most UYU 2,010,700 (US$50,000); the rest goes by bank transfer, which also leaves the documentary trail notaries and banks need.
Pricing a one year peso loan of UYU 4,000,000 (US$99,468) to a medium sized company agreed in October 2026: the ceiling is 19.809 percent, so interest of up to UYU 792,360 is lawful and any higher rate is usurious.

Step by step

Before hiring, identify the Wage Council group for your activity and load its category minimums and adjustment dates into payroll.
Accrue monthly for the aguinaldo (one twelfth of pay), the vacation bonus and the potential dismissal indemnity, so year end and exit costs are funded.
Document misconduct carefully before any dismissal for cause; the employer must prove it, otherwise the full indemnity applies.
Before signing loans, leases with financing or supplier credit, check the rate against the BCU table in force for the date of the agreement (published monthly for rolling quarters).
Structure closings, capital contributions and dividend payments as bank transfers whenever the amount could exceed the cash ceiling; convert UI at the first day of the month.
When creating or buying a Uruguayan entity, collect beneficial owner documents for the whole chain up to individuals holding 15 percent or more, and diarise the 45 or 90 day deadline to report later changes to the BCU.
Online sellers: add the withdrawal button and update terms for the 10 calendar day period before 1 January 2027.
Before suing a local counterparty in court, file the request for the conciliation hearing at the court of the defendant's domicile, unless an exception or an arbitration clause applies.

Common traps

Calling a dismissal 'for cause' does not avoid the indemnity: the employer must prove serious misconduct, and an indemnity paid only after a final judgment carries a 1 percent monthly surcharge (Ley 12.597 art. 8 and 10).
Forgetting the proportional aguinaldo on exit: it is owed on resignation, retirement or dismissal (except serious misconduct), on top of any indemnity, and unpaid aguinaldo is fined at double the amount (Ley 12.840 art. 3 and 7).
Assuming only the national minimum wage applies: Wage Council minimums for your activity group bind once published (Ley 10.449 art. 5).
Applying a foreign standard rate to a small local loan: below UI 2,000,000 the ceiling is only 55 percent above the BCU average, and even US dollar loans have a ceiling (Ley 18.212 art. 11; BCU Comunicación 2026/188).
Paying a capital contribution or dividend in cash above the ceiling: the cash limit expressly covers corporate capital and profit flows (Ley 19.210 art. 35).
Missing the 90 day window to report a change of non resident shareholders to the BCU after a group reorganisation abroad (Ley 19.484 art. 25).
Not telling consumers in writing about their withdrawal right: the cancellation window then never closes (Ley 17.250 art. 16).

Sources

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