Uruguay as a business platform

Some benefits of Uruguay

Stability: For more than 30 years, Uruguay has maintained the same State policies consistently focused on attracting foreign capital, regardless of changes in political parties.

International Reputation: Uruguay is not considered a “Tax Haven” by any country, despite offering excellent tax benefits and asset protection.
Broad network of double taxation treaties

Some benefits of Uruguay

To carry out activities within a Free Trade Zone, the company must have as its sole and specific purpose in its bylaws the performance of activities within a Free Trade Zone.

Then, it is necessary to submit a project to the National Free Trade Zones Directorate, and once approved (estimated timeframe of 1 to 2 months), the company may begin its operations.

For its activities, it is necessary to apply for the corresponding license before the Financial Services Superintendency (SSF) of the Central Bank (BCU) to operate, prior to starting activities. This specific license as “Financial Advisor” takes approximately 4 months to be approved.

Another essential requirement is to enter into a contract with a Free Trade Zone provider, whether a physical office or a third party that offers storage, warehousing, or other related services.

If opting to install a physical office, it is mandatory to hire employees to ensure operational substance. The employee does not necessarily have to be a third party, but may be the administrator themselves. The substance of operations must be consistent with the business plan and the company’s income (for example, a company billing 100 million dollars with one employee will not be accepted in a Free Trade Zone).

The costs of offices and providers within the Free Trade Zone are usually higher than outside, although the services are of high quality. (Approximately USD 1,300 for a 12 m² office – 2 employees)

All activities carried out within the Free Trade Zone are exempt from all taxes.

The only mandatory charges are employee social security contributions (in cases where personnel is hired).

These contributions represent approximately 45% of the employee’s net salary.

Additionally:

At least 70% of employees must be Uruguayan. (there are exceptions)

Foreign employees may opt to be taxed under IRNR (Non-Resident Income Tax), with a fixed rate of 12%, instead of IRPF, which is progressive and usually higher.

Products maintain their origin, and in some cases it is possible to attribute “Uruguayan origin”, which generates commercial benefits for future exports to Mercosur or to countries with which Uruguay has trade agreements.

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Investment Law (COMAP)

For investments in fixed assets in Uruguay exceeding USD 30,000, it is possible to submit an investment project to COMAP.

This project must include at least one of the established development indicators, such as: employment, clean technologies, exports, innovation, decentralization, among others specific to the sector of activity.

Based on these indicators, a score is assigned that determines a tax exemption between 40% and 100% of the invested amount, which can be used as a credit against income tax (IRAE) starting from the first month of project submission.

All imports of fixed assets are exempt from customs duties and advance tax payments.

There is also VAT exemption on purchases, treated as a “tax credit”, and exemption from Net Worth Tax (IP).

It is necessary to submit monitoring reports during the project execution period.

Used fixed assets are also accepted, provided they have not remained in Uruguay during the last three years.

Promoted Housing Law

In certain areas of Montevideo, Maldonado, and currently expanding to other regions of the country, real estate businesses carried out in these areas benefit from a total tax exemption for a period of 10 years.

There are specific restrictions regarding the constructions or improvements that may be carried out in these areas.

The most common business models are:

Real estate developers;

Property renovations;

Investments in pre-construction apartments, with 10 years of tax exemption.

Properties are often sold after 5 years so that the new investor can benefit from another 5 years of exemption, thus extending tax benefits over time.

Free Ports and Airports Law in Uruguay

Official definition: these are port customs areas with special tax/customs regimes where there is free circulation of goods, without authorizations or formal procedures, and activities that add value without modifying the nature of the goods are allowed.

Free change of destination: once inside, the destination of goods can be freely changed (re-shipment, re-export, etc.).

Where it applies: the Ministry of Economy (MEF) mentions the regime for Montevideo and also for Nueva Palmira, Fray Bentos, and Colonia

To access the benefits of this law, operations may be carried out through a foreign company or a Uruguayan company whose sole activity is to introduce goods in transit into ports and/or airports in Uruguay, add value (without modifying the product) through activities associated with the goods and port services: transportation, transshipment, re-shipment, transit, handling, storage/warehousing, disposition, and related services (including even ship repairs within the area, among others).

Goods with added value may be sent to other countries without losing or altering their origin. These may remain for 5 years, with possible extensions.

In addition to labeling/packaging/fractioning, the MEF lists activities associated with goods and port services: transportation, transshipment, re-shipment, transit, handling, storage/warehousing, disposition, and related services (including even ship repairs within the area, among others).

All income generated from this activity is exempt from any tax.

Bonded warehouses are used, and goods enter Uruguay under the customs transit regime.

It is allowed to import into Uruguay up to 5% of goods in transit without losing tax benefits on the remaining cargo.

On the portion imported into the Uruguayan market, applicable local taxes must be paid according to the tax regime of the company used.

Carrasco Airport is one of the seven free airports in the world and the only one in South America (a spectacular fact for a brochure)

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Tax Holiday – Uruguayan Tax Residence

Benefits

Access to the territorial tax system, which taxes only Uruguayan-source income (foreign income is generally not taxed).

Take advantage of the “tax holiday” regime: possibility to choose not to tax foreign passive income derived from financial assets for 10 years, or to tax it indefinitely at a reduced rate of 7%.

Protect assets under a stable, secure legal framework with high international reputation, where business liabilities are separated from personal ones.

Efficiently plan succession and asset organization without paying taxes.

Gain facilitated access to the international banking system from Uruguay, with multi-currency accounts.

Generate tax certainty vis-à-vis the country of origin and avoid double tax residence, provided international and local criteria are met.

Unlike other jurisdictions with tax benefits, in Uruguay an official asset declaration is obtained, allowing formalization of the origin of funds before banks and other entities, contributing to strong international reputation.

Application Paths
To access the Tax Holiday, it is necessary to have been a foreign tax resident for at least 5 years and to acquire Uruguayan tax residence. It is not enough to simply obtain Uruguayan tax residence; it is also necessary to apply for the tax holiday. Not all paths to obtain residence grant access to the Tax Holiday, nor vice versa.

Ways to obtain tax residence:
a) Physical presence: this path also grants access to the Tax Holiday

More than 183 days in Uruguay during a calendar year.
Departures from the country for less than 30 days are considered “sporadic” and therefore continue to count within the 183 days.

b) Center of economic interests:
Real estate investment in Uruguay exceeding 15 million UI (approx. USD 557,000) and minimum physical presence of 60 days. (This path does NOT grant access to the Tax Holiday)

Investment in a Uruguayan company with at least 15 direct employees or investment exceeding 15 million UI (approx. USD 2.4 million). (This path also grants access to the Tax Holiday)

Real estate investment in Uruguay exceeding approximately USD 2,100,000. (This path also grants access to the Tax Holiday)

In addition to the previously mentioned options, there is a new path to access the Tax Holiday as of 01/01/2026, but which by itself does not grant access to tax residence (it must be combined at least with real estate investments exceeding 15 million UI); this consists of investments of approximately USD 100,000 annually in funds established by the Executive Power (not yet precisely defined).

Documentary Requirements
To initiate the process before the Dirección General Impositiva (DGI), the following is required:

Signed application form for change of tax residence (DGI).

Proof of the invoked criterion (for example: certificate of entries and exits from the National Migration Directorate in the case of 183 or 60 days; deeds and certificates for investments; employment certificates, etc.).

Personal documentation: identity card or foreign document.

Documentation proving representation (power of attorney, notarial certificate, etc.).