Disclaimer: This article is not a substitute for legal nor accounting advice. Look for professional advice before you take action.
Uruguay’s neon scenes and dream-like beaches are really hard to go without. Many senior software developers, like you, weigh in if they are ready to sacrifice them for a higher value from their work through better compensation.
While you consider this, you start picturing yourself facing great challenges and learning from great minds. Then you realize, you could be finally getting your dream job as a senior software developer, and if that's not enough, the job could be remote too! The feeling sure is great!
But, there are some things you need to know beforehand, such as visa requirements, how to get paid, and the Uruguay tax system. As a senior software developer in Uruguay looking for American companies hiring overseas, you may encounter several complex rules and regulations that come with the recruitment process. Lucky you, this blog post will answer all of your questions. And more. So let's get right to it.
What Working Arrangement Will I Have As A Remote Worker?
Most remote workers in Uruguay choose to register as a sole proprietor (unipersonal). This type of business structure is very easy to set up and has many benefits such as including the healthcare of the owner in its tax payments. They are liable for independent worker taxes. And as independent remote team members, they don't need to have an online payroll service.
Registering as a sole proprietor is quite easy and does not imply additional costs to you. Firstly you must register at the Tax Administration, or at the Registry of Taxpayers and Companies if you wish to register in person. To learn more about the registration procedure you can follow this link.
Which Taxes Will I Be Paying In Uruguay As A Remote Worker?
While living in Uruguay, you are not required to pay taxes until your yearly income is more than 323,232 Uruguayan Pesos which is 7,313 USD. If you exceed this yearly income then your tax payments will be established on a progressive income tax basis. This tax for remote workers ascends from 10% to 36% progressively adjusting to the amount of income you generate. This tax covers everything from health insurance to sick pay.
There are, however, some charges you can deduct from your tax payments such as Social security charges, some of the costs entailed with raising children and mortgage loans. Luckily, Uruguay allows you to file your taxes online. The deadline is the 30th of April of the year following the income tax year. For more specific information about Uruguay's taxes, you can read this article from Contractor Taxation that can be of assistance.
If you registered as a sole proprietor, you need to file and complete forms 351 and 205 and present them to the DGI (Dirección General Impositiva) and to the BPS (Banco de Prevision Social). This will allow you to generate invoices for your employer up to 641,946 Uruguayan pesos per year (approximately 22,000 US Dollars). You must take into account that the VAT in Uruguay is 22%.
Do I Need A Work Visa to work for a US company?
One of the many benefits of remote working is that there are currently no laws that require you to get a US working permit or visa if you want to work from Uruguay. The IRS states that only people working physically from the US require a work visa.
This also applies to their taxing system! Which means you will only have to pay Uruguayan taxes. Now if you are getting ready to pay taxes this must mean that you are getting paid!
Read on to learn about the best payment options available to you.
How Will I Get Paid?
You have probably massively hiked up your salary through remote working. And now you need to ensure you can get paid. Currencies, exchange rates and frequency of payments are some of the factors you will need to consider before choosing the best payment option for you. Here are some of the best solutions out there and their benefits, for you to make a proper decision:
- Bank transfers: Bank transfers are one of the most common ways to get paid but they can usually leave you subject to expensive bank fees. Nevertheless, they are secure and agile and generally provide a debit card that you can use for your expenses.
- PayPal: This payment platform, Co-founded by Elon Musk, is known for being safe and fast. Plus, the process of creating an account is super easy. Once set up, you can create a custom contractor invoice to send to your employer. When they receive it, they can make payment immediately and you'll receive it within minutes!
- Wise: Additionally to having low transfer costs, convenient exchange rates and conversion fees, and instant transfers (for some countries), Wise has many tools such as batch payment that make it easier for employers to pay contractors in different currencies. Using this platform will be beneficial both for you and your employer. Plus, you don’t need to set up a Wise account to receive payments.
- Cryptocurrency: Today, everyone knows how big of a deal crypto is. Regardless, there are many alternative coins out there that can be more or less trustworthy. That said, it's best to stick to the ones you know and trust. Bitcoin, USDT, and Ethereum are some of the most popular. They are fast, secure, and easy to use.
- Payoneer: A perfect substitute for PayPal. This platform is used in over 200 countries, so if your employer doesn't want to use PayPal, then this is the next best option. Plus, it has fewer operational costs and transactional fees.
When selecting your payment option, make sure to check the exchange rates and service fees. This way, you can select the option that provides you with the most advantages.
Kickstart An Extraordinary Remote Working Career
Software developers are in high demand. In addition, there has been a surge in American companies hiring in Latin America. The pandemic forced many companies to adopt remote work arrangements. The much-expected switch from working at the office to remote work accelerated and brought with it the possibility of hiring talent anywhere, even overseas, bringing up opportunities for many senior software developers.
Finding your dream job can be stressful and time-consuming. But Nexton is here to make things easier for you. With Nexton as your partner, you will get the best know-how and assistance to transition smoothly to a remote working arrangement. Our process is simple and transparent. And we match our candidates with top-notch opportunities.
Follow our tips and you will find it easy to set yourself up as a remote worker living in Uruguay and working for your favorite US startup. If you have questions do not hesitate to connect with our team to know more.