Due to their geographical locations, all free trade zones in Uruguay allow an easy access to comfortable housing, spaces adequate for entertainment and recreation, and cultural and educational centers that guarantee a peaceful and secure living, where assets are also safe, in addition to the internationally renowned beaches.
Free trade zones in Uruguay are exploited by the State, or by private companies. Private free trade zones are managed by firms authorized by the government. The State free trade zones are administered by the Area of Free Trade Zones of the General Trade Bureau, which in turn supervises and controls the whole free trade system.
Free trade zones allow for all types of trade, industrial or services activities, with no restrictions and entitled to an exemption of all national taxes, whether existent or to be created in the future, except for the case of contributions to social security made in the name of Uruguayan employees. The entry of goods into the free trade zone areas is also exempt from all taxes. The Uruguayan State guarantees, by law, the rights that the law on free trade zones has determined for users and shall be liable for all damages to users.
The companies entitled to perform activities at free trade zones may be natural or legal persons incorporated in any type of partnership, even companies with bearer shares, a fact that preserves the anonymity of investors. No differences are considered between national and foreign investments, and no special requirements apply to the latter, where foreign companies are allowed to establish branches. Of the hired personnel, 25% – or more, in specific cases to be considered by the Government – may be composed by foreign citizens who are allowed to choose not to make contributions to the Uruguayan social security system.
INFRAESTRUCTURE AND SERVICES OFFERED
Apart from obtaining the necessary authorization from the Government to operate, Uruguayan free trade zones are responsible for providing users the infrastructure needed to operate, in what concerns building aspects of a minimum urban development (plot division, warehouses, offices, etc.) and basic services (electrical power supply, sewage systems, telecommunications, security, etc.)
Each free trade zone offers a variety of possibilities, according to its specific location and to the particular development chosen, all subject to the State’s supervision:
- Plots of different dimensions where companies may build their own facilities according to their specific needs. For this purpose, the entry of components and machinery shall be exempt from all documentary procedures and taxes
- Buildings for developing the users' activities regarding industries, trade, or services, adapted to the different needs of the companies.
- Container terminal
- Office space adaptable to various needs
- Green areas designed especially to improve the physical environment
- Highly reliable energy and communications services
- Qualified manpower, easily adaptable to the latest technologies
- Quality transportation services available in the amounts necessary
Users of free trade zones are, in regards to the activities performed therein, exempt from all national taxes, existing or to be created in the future, even those requiring a specific exemption by law.
They shall be exempt from the following taxes, among others:
- Tax on Income from Economic Activity (“IRAE”)
- Net Worth Tax (“IP”)
- Value Added Tax (“IVA”)
- Specific Internal Tax (“IMESI”)
- Tax on Control of Corporations (“ICOSA”)
- Special contributions to social security (made in the name of Uruguayan employees), and pecuniary compensations determined in favor of non-state legal entities in the field of social security are not included in the abovementioned tax exemptions. Dividends or profits credited or paid to the name of natural or legal persons resident abroad shall not be exempt from the referred taxes to the extent that they are subject to taxes in the country of residence of the person benefited and such country allows for the possibility of tax credits for taxes paid in the Republic of Uruguay
- All goods, services, merchandise and raw materials, regardless of their origin, entering or exiting the free trade zones are exempt from all taxes
- The Uruguayan State, subject to liability for damages, ensures users of free trade zones, for the whole period of duration of the contract, all tax exemptions, benefits and entitlements agreed upon
- A special regulatory system for the incorporation of partnerships, including more benefits than the usual regulations, is applicable to companies incorporated as users of free trade zones.
- In what concerns the collection of duties by the National Ports Bureau, entries and exits of goods and their transportation from and to free trade zones will be considered as international transit where fees will be charged for only one entry and one exit.
- The State monopolies relative to industrial and commercial services are not applicable in free trade zones.
- Free trade zones offer the possibility of free entry and exit of currencies, securities and precious metals.
- All requirements, existing or to be determined in the future, relative to the mandatory inclusion of national components in goods manufactured do not apply in the case of goods-manufacturing activities carried out in free trade zones. Likewise, all requirements that condition, or might possibly condition, the entry or exit of goods to or from free trade zones are not applicable, with the sole exception of those relative to the control of such goods.
- Certificates of origin are issued for all products manufactured in the free trade zones. The preferential treatment given by third countries to exports of certain Uruguayan products, and in cases of limited volumes and values will be applied to the benefit of exporting industries already established in the non-free-trade territory in regards to such products.
From: Ministerio de Economía y Finanzas.