Uruguay continues to consolidate its position as one of the most stable and reliable destinations in the region for foreign investment. Its well-known political and economic stability, combined with a tax system based on the source principle and a robust set of promotional regimes, positions the country as a strategic hub for companies across a wide range of sectors.
According to Revista Tributaria No. 309 (27 October 2025), Uruguay offers a broad array of incentives that promote sustainable development, innovation, and job creation, facilitating both the establishment of new projects and the expansion of existing operations.
Investment Promotion Law: a key pillar
Law No. 16,906 establishes tax benefits applicable to both local and foreign investments, including:
- Exemption from Net Worth Tax (IP).
- Exemption from VAT and customs duties on the import of capital goods.
- VAT refunds on local purchases.
- Partial or total exemption from Corporate Income Tax (IRAE), depending on indicators such as employment, innovation, exports, and decentralisation.
This regime represents one of the main drivers for attracting productive investment projects to the country.
Free trade zones: a competitive ecosystem
Uruguay’s free trade zones remain one of the country’s key differentiating factors. Users benefit from exemptions from national taxes—including IRAE, IP, VAT, ICOSA, and customs duties—allowing them to operate in a highly tax-efficient environment with a strong international focus.
Free port and free airport: world-class logistics
The free port and free airport regime allows for the storage and movement of goods without the payment of taxes while they remain within these areas, making it a key tool for logistics companies and global trade operators.
Incentives for the technology sector
Uruguay strongly promotes the knowledge-based economy through incentives for:
- Software companies.
- Exportable technology services.
- Biotechnology and R&D projects.
These regimes provide IRAE exemptions on income derived from licences, services rendered from Uruguay, and innovative projects that meet substance requirements. In addition, there are incentives aimed at attracting foreign IT talent.
International trading: a highly competitive regime
Under the international trading regime, only 3% of the margin is subject to taxation, resulting in an effective tax rate of 0.75%, compared to the standard corporate tax rate of 25%. This makes Uruguay particularly attractive for international trading and intermediary structures.
Strategic sectors: forestry, agribusiness, and renewable energy
Uruguay promotes activities considered to be of national interest through exemptions from IRAE and IP, along with other sector-specific benefits. Key sectors include:
- Forestry, with significant tax advantages for both natural and planted forests.
- Renewable energy and green hydrogen projects, which are priority areas within the country’s energy transition strategy.
Incentives for real estate development
Social housing projects and large-scale real estate developments benefit from exemptions and tax credits designed to encourage investment in the construction sector.
Tax regime for new residents: tax holiday
Uruguay offers a highly attractive option for individuals who acquire tax residence. New tax residents may choose between:
- A 10-year exemption on foreign-source movable capital income, or
- An indefinite reduced tax rate of 7% (instead of the general 12%).
This choice must be formalised through a sworn statement upon obtaining tax residence.
Network of double taxation treaties
Finally, Uruguay has signed more than 20 Double Taxation Agreements (DTAs), strengthening legal certainty and the country’s international competitiveness.
Interested in investing or establishing operations in Uruguay?
At Feliu N&I, we can advise you on identifying the most suitable tax regime for your project, as well as on all procedures required for your establishment in Uruguay. Our team is available to support you at every stage of the process.
