All About Investing: Uruguay

Business Environment

Uruguay has one of the best business environments in Latin America, currently holding the fourth position in the region according to the Latin Business Index. Its favorable situation may benefit further from a possible free trade agreement with the United States, closer ties with Europe and less emphasis on Mercosur.

Openness to Foreign Investment

The Government of Uruguay recognizes that foreign investment plays an important role in the continuing development of the economy, and maintains a favorable investment policy through a number of incentives. It grants equal treatment to both national and foreign investors, and foreign investors do not receive any additional benefits.
 
In 1998, the Uruguayan Government approved an investment promotion and protection law (no.16906) that declares that the promotion and protection of national and foreign investment is in the nation’s interest. The main aspects of the law are that foreign and national investments are treated alike, that investments are allowed without prior authorization or registration, that the Government does not prevent the establishment of investments in the country, and that investors may freely transfer abroad their capital and profits from the investment. There are no restrictions on technology transfer. In June 2003, the government established a single-window mechanism to channel all investment requests. 100% foreign ownership is permitted, except where restricted for national security purposes.

Bilateral Investment Agreements

Uruguay has signed bilateral investment treaties with China, Spain, France, Great Britain, Chile, Belgium, Luxembourg, Hungary, Italy, Mexico, Panama, The Netherlands, Poland, Rumania and Switzerland. Bilateral investment treaties with Israel, Malaysia, Portugal, the Czech Republic, Sweden, and Venezuela are pending parliamentary approval. In addition, Uruguay signed Double Taxation Agreements with Germany, Korea and Hungary.
 
Uruguay has signed a bilateral investment treaty with the United States, which is pending to be revised by the Senate of the U.S. Further negotiations towards a Free Trade Agreement are expected in the near future.

OPIC and Other Investment Insurance Programs

The Uruguayan Government signed an investment insurance agreement with the Overseas Private Investment Corporation (OPIC) in December 1982. The agreement allows OPIC to insure U.S. investments against risks resulting from expropriation, inconvertibility, war or other conflicts affecting public order. OPIC programs are currently used in Uruguay.

Foreign Trade Zones (FTZ) / Free Ports

All types of commercial, industrial, and service activities can be performed within the free trade zones. Activities carried out in a free trade zone are considered as taking place outside of the national territory. When goods from a free trade zone are introduced into the rest of the country, they are treated as “imports.”