Why invest in Uruguay…
- a completely safe legal framework for the investor.
- the ease, swiftness and low cost in the acquisition of “Sociedades Anonimas” (Corporations), as well as their safety in the functioning of the controlling organizations.
- prepared agreements to be signed to avoid the double international taxation with Mexico, Spain, Portugal and the ratification of the already existing one with Germany.
- Political and institutional stability.
- Social stability. No racial issues exist. 97% of Uruguay’s population is of European descent, maintaining a peaceful and safe environment, both in the cities and the rural countryside.
- In general, without climate problems, with the added advantage of the counter-season (between the Northern and Southern hemispheres).
Tax System in Uruguay
The tax system in Uruguay is borne and maintained under the Source Principle as a counter position to the Global Income Principle, adopted in most countries in the region and the world.
Under this criteria, Uruguay’s system only taxes capital within the national territory and the income obtained from said capital generated domestically, without considering if the investor has other investments, activities or income abroad.
As of July 1, 2007, a tax reform has taken effect that has incorporated the Non-Resident Income Tax (IRNR). This is a fixed tax of 12% annually on income obtained by non-residents from capital based in Uruguay or activities developed within the national territory. In the case of income obtained from rents (rural or urban) the tax is of 10.5%.
Likewise, Uruguay’s tax system is very favorable for agricultural activity, since any land being exploited is exempt from the Wealth Tax. The ownership of livestock and its commercialization receives the same treatment, which are not taxed by the VAT (Value Added Tax).
It is also worth noting the Investment Promotion scheme, where exemptions are established on Income Tax and Wealth Tax, based on a number of exercises that can reach up to 25 years; in Investment Projects in different areas that are beneficial to the country and that need be previously approved by the Executive Power, which encloses a very swift process.
Information prepared for Live Uruguay by the Accountant. Ma. Gabriela Pintos. ESTUDIOPRO.