Contributed By Ferrere Abogados
Law 19.484 was enacted in 2017, and modified the tax aspects of sales of offshore holding companies having assets in Uruguay. The sale of shares of offshore low or no tax jurisdiction companies (which are defined on a list prepared by the General Revenue Service) now carries taxation when more than 50% of its assets are, directly or indirectly, located in Uruguay. Therefore, companies doing M&A transactions through holding companies from low or no tax jurisdictions should assess potential tax impacts in this regard.
In recent years, with Law No 18.930 enacted in 2012 and Law No 19.484 enacted in 2017, with its regulations, Uruguay imposed the obligation for commercial companies and other entities based or operating through a permanent establishment in Uruguay to disclose certain information about the entity, its owners and its final beneficial owners to the Central Bank of Uruguay. Every change in the information that has been disclosed to the Central Bank has to be communicated within the timeframes established in the regulations. These disclosures to the Central Bank of Uruguay should be taken into consideration in the context of an M&A transaction. It is important to note that the information disclosed to the Central Bank pursuant to the aforementioned laws and regulations is not publicly available.
There is a draft law being discussed in Congress which, if approved, will amend the antitrust merger control system in Uruguay.
Currently, a prior authorisation from the Antitrust Commission or specific regulator is required only for transactions that create a de facto monopoly (100% of the relevant market), and transactions that involve economic concentrations should be notified to the Antitrust Commission or specific regulator only when any of the following thresholds are met:
The draft law eliminates the relevant market threshold for the purposes of obtaining authorisation or notifying the Antitrust Commission or specific regulator, but requires that all transactions that meet the gross sales threshold are authorised by, instead of communicated to, the Antitrust Commission or specific regulator. It is not yet clear whether the required gross sales amount will remain the same.