Key Issues for Investors

Investor Friendly Country:

  • Foreign investors and local ones: equal treatment
  • No limitations to ownership of property by foreigners
  • No restrictions to enter/exit the country

Business rules are Investor Friendly:

  • No currency exchange controls or forced conversion
  • Foreign Currency can be used freely: Dollars, Euros, etc.
  • Free flow of capital
  • No capital/dividend repatriation issues

Stable Economy and Rules:

  • Macroeconomic stability
  • Investor-grade

Solid Legal System:

  • Strong reputation for respect of contracts & private property
  • Independent and reputable judiciary
  • Corruption is not an issue

Private Property rights protected:

  • Constitutional right, enforced
  • No history of expropriations

Indexes (Latin America)

  • # 1 in Educational Index (Latin Business Chronicle)
  • # 2 in Economic Freedom (The Heritage Foundation)
  • # 1 in Democracy Index (The Economist Intelligence Unit)
  • # 1 in Quality of Life (Mercer)
  • # 1 in Corruption Perception (Transparency International)
  • # 1 in Rule of Law Index (World Justice Project)

Tax System for Businesses

Applicable taxes:

Corporate Income Tax: 25% of net income (plus Dividend Distribution Tax: 5.25%) or:

  • 12% of gross income, available for small businesses, or
  • 0-2% of gross sales: available for small farms

Corporate Asset Tax: 1.5% (or less)

  • Farmland: applicable only after 2,000 hectares, scaled *

Sale of goods and services: VAT of 22%

Import duties: variable

Reduced Taxation for Businesses

Companies operating in Uruguay have two reduced taxation systems available. Both are widely used:

  • Widespread tax exemption system available for new investments of any size: reduction in Income Tax, Asset Tax, VAT and import duties.
  • Set up in a Free Trade Zone (FTZ), where there is no taxation. FTZs are an option for companies selling products or services outside of Uruguay

Tax System for Individuals

Individuals working in Uruguay pay:

  • Personal income tax on salary: 0 to 36%.
  • Tax on capital: dividends, capital gains, etc.: 12%

Foreign individuals who relocate and become tax residents (183 days in country in calendar year):

  • First five years plus year one became a tax resident: tax holiday.
  • Afterwards: two types of foreign income are taxed: dividends and interest. At 12%.
  • But there is no double taxation: Uruguay credits tax paid overseas on those dividends and interest.

No death / inheritance / estate tax

Tax System for Property Owners

  • Property Tax: 0.3 to 0.5% of market value (avg., urban properties). Farmland usually has lower rates.
    • In addition, a corporate asset tax of 1.5% is levied if owned by a corporate vehicle. Personal asset tax exists but seldom applies, due to non-taxable minimums, and tax phase-out in progress.
  • Rental income tax: 10.5% of gross rental
  • Capital gains tax:
    • 12% of the gain if owned by individual(s)
    • 12% of the gain if owned by a foreign corporate vehicle
    • 25% of the gain if owned by a local corporate vehicle

The Property Purchase Process

The three key questions to get started:

  • Who can purchase property?
  • How can property be purchased?
  • What can one purchase?

Answers: 3 A’s

  • Anyone: There is no differential treatment, nor restrictions or impediments for foreign buyers of property.
  • Any way: individual(s), corporate vehicle (local/foreign).
  • Anything: No limitations (such as restrictions on borderline or beachfront property)

Structuring the Property Purchase

The purchase process requires the assistance by an “Escribano” (a conveyance attorney), appointed by the buyer.

The conveyance attorney’s role:

  • Analyzes the ownership history and other details to ensure the buyer obtains a clean title
  • Drafts the reservation and the purchase document
  • Escrow agent for the deposit on the property
  • Records the purchase at the Property Registry

Proof of Ownership: Public Registry recording

The Purchase Process: Steps

  • 1) Buyer selects a property, and agrees on the price.
  • 2) Buyer appoints a conveyance attorney who will draft the the reservation document (“Boleto de Reserva”):
    • Securing the purchase, by committing seller and buyer.
    • Setting a penalty if either party breaches the commitment.
    • Setting the amount that is deposited when signing the reservation (usually 10% of the price). The deposit stays with the buyer’s appointed conveyance attorney, not with seller or realtor.
    • Allowing for a 30-60 day window to verify the deeds, title search.
    • Setting the closing date: price is paid and property is transferred.
  • 3) Title search and deed study is undertaken by the conveyance attorney.
  • 4) The conveyance attorney drafts the purchase document (“Escritura de Compraventa”).
  • 5) The purchase document is signed, the property is transferred, and the price is paid (*or the first installment, if it has more than one).
  • 6) The deed is recorded in the Public Registry.

Property Transaction Costs

Buyer: 5% to 8.5%:

  • Real Estate Agent Fee (optional): 3% plus VAT (22%) = 3.66%
  • Conveyance Attorney Fee: 3% plus VAT (22%) = 3.66%
  • Deed Registration Stamp Duties (“Montepios”): 0.55%
  • Registry and Tax Certificates Stamp Duties: USD 700 avg.
  • Property Transfer Tax: of market value: 0.5% (avg.)

Seller: 0.5% to 4.1%

  • Real Estate Agent Fee (optional): 3% plus VAT (22%) = 3.66%
  • Property Transfer Tax: of market value: 0.5% (avg.)

Main Industries for Investors

Food commodities


  • 5% of global beef exports
  • High quality, high sanitary status
  • 100% of the country’s herd has traceability


  • 6th global exporter of soybeans
  • 4th global exporter of rice


  • 5th global exporter

Forestry / Timber

Unique conditions for growth of eucalyptus:

  • Growth cycles of 8-10 years
  • Widespread water availability
  • Stable soils

World’s largest pulp mills are in Uruguay

  • UPM (Finland), one plant operating; building second plant
  • Stora Enso (Sweden)

World’s highest FSC certification

  • 85% of forests are certified

Logistics & Free Trade Zones

Logistics and services hub for the region

  • Competitive ports
  • Adequate infrastructure
  • Favorable tax treatment

Free Trade Zones

  • 12 Free Trade Zones throughout the country
  • Qualified workforce
  • Business parks, office towers, storage facilities
  • No taxation within Free Trade Zones
  • Hub for hundreds of multinationals


Uruguay receives 4 M tourists per year

  • Tourism industry: 7.5% of GDP
  • Main attractions: coastal cities, especially Punta del Este
  • Cruise ships: 275,000 visitors per year

Tourism-related investment

  • Real estate development in Punta del Este and other coastal cities is widespread
  • Hotel industry in permanent growth, with investments receiving significant tax breaks

Real Estate Development

Main markets for commercial development:

  • Montevideo
  • Punta del Este

Main markets for residential development:

  • Punta del Este
  • Montevideo
  • Colonia
  • Widespread development of condominiums, single homes, gated communities
  • High-end projects: Cipriani, Fendi, Venetian, Trump Tower

Tips and Suggestions for Investors

  • Tax breaks are widely available for investments of any size: determine the way to optimize exemptions.
  • Companies may set up operations in Free Trade Zones, plus other convenient alternatives with favorable tax treatment are also available: evaluate the options.
  • Location, facilities and services vary across the 12 Free Trade Zones: determine which one fits your needs.
  • Determine which type of corporate vehicle is most convenient and tax efficient, both in Uruguay and for the parent company’s jurisdiction.
  • When purchasing property, rely on advisors with global scope, who understand estate and tax rules in the buyer’s country of origin.
  • When purchasing property, consider the different ownership options, and their different tax treatment.
  • Consider the reduced taxation system for small farmland investments, and adopt the type of ownership structure that qualifies.
  • Evaluate obtaining tax and legal residency, and understand the benefits of each.

What We Can Do For You

Our firm is is a full-service Law and Tax firm, providing all the required services for investors under a one-stop-shop concept.

We are the only firm in Uruguay that is a fully integrated member of a leading global law firm.

Our partners are partners of one global firm, and we provide the support and scope of our worldwide partners in 160 locations in over 65 countries.

Our bilingual professionals assist foreign and local investors across all industries, with the highest standard of quality and integrity.

Andersen is the Uruguayan member firm of Andersen Global®, an international association of member firms comprised of tax and legal professionals worldwide.