Free Trade Zones


Free Trade Zones (FTZs) are specific geographic areas with a special regulatory status: Companies operating within them face no taxation.

Uruguay has eleven FTZs in different parts of the country (near airports, ports, inland, or in Montevideo’s business district).

Operations which may be performed within FTZs include a broad range of services (such as financial, trading, IT, BPO, shared services) and logistics (storage, handling, and classification of goods) Uruguay’s Free Trade Zones.

Free Trade Zones (FTZs) are a strategic sector of Uruguay’s economy, representing between 5% and 7% of GDP in recent years.

FTZs were first established under legislation approved in 1987 and have grown to occupy an important part of Uruguay’s economy and labor market.

Hundreds of global and regional companies operate within Uruguay’s FTZs servicing customers worldwide.

Services Free Trade Zones


Services FTZs allow for companies operating from within to provide any type of services to:

  • clients located within the FTZ
  • clients located abroad
  • clients located in other FTZs
  • clients located in Uruguay (as longs as they are payers of local corporate income tax)

The Key Advantage of FTZs: No Taxes


When a company establishes itself in a FTZ, it faces no Uruguayan taxes, except social security taxes on its local employees (as any employer).

Tax exemptions are guaranteed for current or future taxes.

Thus, the company will not pay:

  • Import taxes or duties
  • Corporate Income Tax (IRAE)
  • Dividend distribution tax
  • Capital Tax (IP)
  • Value Added Tax (VAT) on goods or services

Requirements to operate within a FTZ


The only requirement that a company operating within a FTZ faces is that 75% of its workforce must be Uruguayan citizens. However, in services, a company may obtain a waiver and employ only 50% of local labor.

The company’s officers do not need to be local.

To operate within a FTZ a company must incorporate an SPV, and file its user/lease agreement and a business plan with the Finance Ministry.

Process to operate within a FTZ


Simple and clear process:

  • The Company chooses the FTZ which best fits its needs in terms of infrastructure, location, etc.
  • A fully-owned local vehicle is incorporated (a corporation or a limited liability company) or a branch of the foreign company is established
  • The company signs the user/lease agreement with the operator of the FTZ
  • A memorandum explaining the company’s intended activity and operations (the ”business plan”) is filed with the Finance Ministry. It is usually approved within 60 days

The Local Vehicle


When incorporating a local vehicle, it may be a Corporation or an LLC:

  • No minimum capital requirement
  • A sole officer / director is possible
  • A sole shareholder is possible in the case of Corporations
  • Officers / directors may be foreign nationals
  • Physical presence of officers / directors not required

Uruguay’s Advantage: a Stable Business Environment


  • Uruguay offers a business-friendly environment
  • Free inflow and outflow of capital and repatriation of profits
  • Open financial system, with no capital controls
  • Free exchange and use of foreign currency
  • Solid banking system

Our Services in Free Trade Zones


Our firm has broad experience advising foreign companies on the set-up of operations within a FTZ, plus the ongoing support:

  • Helping select the appropriate FTZ
  • Incorporating the local vehicle
  • Drafting the “business plan” to be filed with the Finance Ministry
  • Drafting / reviewing user lease agreements
  • Providing the company’s annual maintenance, tax and accounting services
  • Legal residency / work permits for foreign nationals
  • Legal services in general

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