Market Analysis & Legal: Uruguay

Dispute Settlement

The investor is given the option of choosing between arbitration and recourse to the courts for the settlement of disputes. Although Uruguay is not a member of the ICSID (International Center for the Settlement of Investment Disputes), the Uruguayan Government has requested that Parliament agree to membership. Uruguay's legal system is based on a civil law system derived from the Napoleonic code. There are effective means for enforcing property and contractual rights. There is no government interference in the court system. The Judiciary is independent, but sometimes slow.

Conversion and Transfer Policies

Uruguay has maintained a long-lasting tradition of imposing no restrictions on the purchase of foreign currency or the remittance of profits abroad. Foreign exchange can be freely obtained.
 
There are no laws that force local ownership, except in the areas reserved for the State.

Protection of Property Rights

Secured interests in property, both movable and real, are recognized and enforced. Mortgages exist, and there is a recognized and reliable system of recording such security interests. Uruguay has a legal system that protects the acquisition and disposition of all property rights, including land, buildings, and mortgages. Execution of guarantees is, however, usually a slow process.
 
Property  Ownership - Everyone – Uruguayan nationals, foreign residents and even non-residents – can own property in Uruguay. Certain areas are limited, such as those near beaches, although there are exceptions in certain areas.

Transparency

Uruguay has strong laws to prevent bribery and other corrupt practices. In 2005, Uruguay was ranked second best in Latin America (after Chile) according to Transparency International’s Corruption Perception Index.

Labor

The Uruguayan labor force of some 1.2 million is well educated and adept in the application of modern industrial techniques. The government has instituted technical training programs to help meet industry's skilled labor requirements. At 97%, Uruguay’s literacy rate is the highest in Latin America and on par with that of the United States.
Services and trade employ more than half of the Uruguayan workforce, whereas about one-fifth of workers are engaged in manufacturing. Relatively few are employed in financial institutions and agricultural enterprises.

Taxation

Uruguay has not had inheritance or personal income taxes since 1974. The government's main sources of revenue are value-added taxes and export taxes. Real estate taxes and corporate taxes are also levied. Currently a tax reform is under study.

Property Ownership

There are no restrictions on private ownership, the establishment of a business or engaging in any form of remunerative activity, except in areas declared to be of national security interest, or those in which the government maintains a legal monopoly.