Regulatory Framework 

The current investment promotion system is outlined in law  No.16.906, which declares that the promotion and protection  of investments made by domestic and foreign investors in  the country is an issue of national interest. The regulatory  framework for that regime has been developed and enhanced  in recent years, leading to the regulations currently in force  contained in Decree N ° 02/2012.

It is very important to note that the regime does not distinguish  between local and foreign investment, both of which can enjoy  the same benefits.

Computable investments

  • An eligible investment is understood to be the acquisition of the  following assets intended to make up the fixed assets of the  companies:
  • Personal property destined directly to the activity of the  company with a minimum individual value of approximately  USD 50, being expressly excluded those property destined  for the home. These possible investments include  machinery, facilities, equipment in general, furniture and  utility vehicles.
  • Improvements in civil works in own or third-party properties  as long as there is a current contract.
  • Seedlings and implantation costs (multi-year nursery  plants, fruit trees and shrubs).
  • Likewise, used goods acquired on the spot, directly or indirectly  affected by the production process, will also be considered  eligible, provided that they have never been subject to tax 
  • benefits before.

The investments foreseen in the projects, computable to obtain  the benefits, will be those executed from the beginning of the  fiscal year of presentation of the request for the promotional  declaration by the company, or in the 6 (six) months prior to the  first day of the month of presentation of said request and for  up to a maximum total period of 10 (ten) exercises that must be  contemplated in the project schedule.

Indicators to grant benefits 

Although there are specific indicators in relation to the different  activities, the evaluation of investment projects is carried out 
based on a score derived from a general matrix where the  following indicators are considered and weighted:

  • Employment generation 50 %
  • Increase of exports 20 %
  • Decentralization 15 %
  • Clean technologies 20 %
  • Research, development and innovation 20 %
  • Sector indicator 25 %

To access the promotional regime, companies must ensure  at least 1 point in this matrix of indicators that allows them  to obtain a minimum base of 30% exemption from IRAE to be 
used within a period, also at least, of 4 years

Tax Benefits

Among the benefits to be obtained, we highlight the  following:

Corporate Income Tax (IRAE): depending on the  percentage that arises from the matrix of indicators, and by virtue of temporary regulations that allow in certain periods to increase said benefits with additional percentages, a Minimum savings floor of 30% of the  invested amount.
It is also highlighted that, to those companies categorized  as micro or small that present investment projects within  the fiscal year for a cumulative total of up to UI 3,500,000, 
they are granted an additional 10% of IRAE benefit and an  additional exercise to the term of exemption obtained for  said tax.

Property Tax (IP): In the case of real estate, the exemption  will include civil works carried out, for a term of eight years if  the project is located in Montevideo and a 10-year exception 
if it is based in the interior of the country.

National Value Added Tax (IVA): the approved projects will  be able to enjoy the refund of this tax associated with  the purchase in place of materials and services destined 
for civil works and of movable property destined for the  project.

Taxes and taxes on the import of goods: movable  goods and civil works materials that are declared noncompetitive with the national industry by the National  Directorate of Industries (DNI-MIEM) will enjoy a total  exemption from import taxes and fees. 

On the other hand, there are in the current regulations  some specific incentives for users of industrial parks and  science-technology parks linked both to the increase in 
the percentage of exemption from IRAE and to the term to  enjoy said benefit.

Foreign Trade


Goods can be imported without significant restrictions,  except for a few special products that can only be  imported with prior authorization from the Executive  Power. Customs duties are imposed on the customs  value of imported goods, which is determined according  to the valuation criteria provided by the World Trade  Organization.

Uruguay is a member of MERCOSUR (Southern Common  Market), so imports of any product from these countries  are generally free of customs duties. Imports of goods 
from other countries are subject to a common external  tariff (CET). 

In addition to custom rates, imports are subject to VAT at a  rate of 22% plus import surcharges. 

A at a rate of 22% plus import surcharges.


Exports are not subject to any taxes and there are practically  no prohibitions regarding the type of goods to be exported.

Various instruments are offered to promote exports:

  • Reimbursement of taxes: there is a system for  reimbursement of indirect taxes where the exporter can  recover internal taxes that are added to the cost of the  exported product. 
  • Temporary admission: supply imports for exportable  products are exempt from customs tariffs if the final  products are exported within an 18 month period.
  • Refund: for certain products, the refund system allows  the reimbursement of tariffs paid on imports at the time  of export
  • Special financing: exporters can access credit at a  preferential interest rate.

Projects of great economic dimension

Although there was already a previous regulation that  protected this type of “megaprojects” called Large Economic  Dimension (GDE), on May 4, 2020 Decree 138/020 was  published, where construction activities for sale were  declared promoted. or leasing of real estate destined to  offices or housing and urbanization that, among other  conditions, have a value in civil works and personal property  destined for common use areas greater than 60: 000,000  Indexed Units, something like some USD 6,500 .000  approximately.

Likewise, and along the same lines, through a new Decree  published on November 24, 2020, new modifications were  established seeking to grant greater facilities to this type of  undertakings, basically, reducing the amounts required to be  included within the definition of GDE projects. 

Those constructions that:

  • They have a value in civil works and personal property  destined to common use areas, of 20: 000,000 UI or  higher (about USD 2,200,000 approx.).
  • They are registered with the BPS with or without activity  as of the entry into force of this Decree, and in which  investments for a value in civil works and personal  property destined to common use areas of 20: 000,000  UI or higher remain to be executed .
  • In the cases of investments less than 60: 000,000 UI,  the project as a whole must have at least 5% of the area  destined for common use, in the rest of the cases it must  have at least 10%.

The following table details the income tax exemption (IRAE) 

IRAE exemption Investment in UI Approximate investment in USD
5% 20.000.000 and 40.000.000 2.250.000 and 4.500.000
10% 40.000.001 and 60.000.000 4.500.000 and 6.700.000
15% 60.000.001 and 90.000.000 6.700.000 and 10.100.000
20% 90.000.001 and 205.000.000 10.100.001 and 23.000.000
25% 205.000.001 and 287.000.000 23.000.001 and 32.200.000
30% 287.000.001 and 574.000.000 32.200.001  and 64.300.000
40% 574.000.000 64.300.000

The maximum term for the use of the benefit will be up to  10 years, starting in the first fiscal year in which tax income  is obtained (and with a maximum of up to 4 years from the  promotional declaration).