The following diagrams illustrates a SAFI’s role in a trade operation:When the object is to provide financing to a country in the region:
a. As a first step, an Argentine importer opens a letter of credit in favour of a Uruguayan offshore corporation (SAFI).
b. When the SAFI receives the letter of credit, it issues a new letter o credit (in a back-to-back operation) to a Mexican exporter.
c. The Mexican exporter can sell its trade receivable to a bank in Uruguay.
d. The goods flow directly from the exporter to the importer.
When the object is to generate a transfer price in Uruguay:
I. As a first step, an Argentine importer opens a letter of credit in favour of a Uruguayan offshore corporation (SAFI), for USD 100,000.
II. The SAFI issues a new letter o credit (in a back-to-back operation) to a Mexican exporter, for USD 80,000.
III. The Mexican exporter sends the documentation to the SAFI for USD 80,000.
IV. The SAFI issues an invoice for USD 100,000, and sends that invoice plus the documentation issued by the Mexican exporter to the Argentine importer.
V. The Argentine importer pays the SAFI USD 100,000.
VI. The SAFI transfers USD 80,000 to the Mexican exporter, and retains the difference (USD 20,000) for the SAFI.
VII. The goods flow directly from the exporter to the importer.
As a provider of loans and investments
A SAFI can be used to give loans to third parties, or to channel capital increases in other companies.
As a Special Purpose Vehicle (SPV) to secure assets in a third country
A SAFI is the ideal vehicle to use as an SPV owning the assets that may result in a securities operation of any type, in any country in the region.
As an owner of patents and copyrights
An offshore company owning patents and copyrights may make it easier to justify the transfer of royalties for their use.
As an asset-protection vehicle
Offshore companies are commonly used to protect assets from eventual legal claims from commercial or other parties.
To engage in leasing agreements
An offshore company that owns and leases out capital goods avoids the payment of taxes on the leasing-related income.
To hire personnel abroad
An offshore corporation may be utilized to hire executives of a company.
To provide professional services
An offshore corporation may be the sole owner of the rights of services that a client may want to offer to third parties.
Captive Insurance and Re-Insurance activities
Uruguayan Safi’s can be engaged in captive Insurance and/or Re-Insurance activities, as permitted by law