URUGUAY URUGUAY
Dec 26, 2015
Presentation SchedulePresentation Schedule
Country ProfileCountry Profile
Uruguayan Free Trade Zones Uruguayan Free Trade Zones
Tax and Corporate RegimesTax and Corporate Regimes
UruguayUruguayGeneral OverviewGeneral Overview Population – 3,314 millionPopulation – 3,314 million Area – 173.215 km2Area – 173.215 km2 GDP 2006 – US$ 18,590 millions GDP 2006 – US$ 18,590 millions GDP per capita 2006 – US$ 5,812 GDP per capita 2006 – US$ 5,812 Annual growth rate – 7,0%Annual growth rate – 7,0% Unemployment (Sept. 2007) – 8,5%Unemployment (Sept. 2007) – 8,5% Common external tariff – 0 to 20%Common external tariff – 0 to 20% Exports 2006 - US$ 3,985 millionsExports 2006 - US$ 3,985 millions Exports 2007 – US$ 4,496 millionsExports 2007 – US$ 4,496 millions Imports 2006 – US$ 4,775 millionsImports 2006 – US$ 4,775 millions Imports 2007 – US$ 5,588 millionsImports 2007 – US$ 5,588 millions
Social and Political BackgroundSocial and Political Background Quality of LifeQuality of Life
Security Security Distances Distances Pollution Pollution Close contact among peopleClose contact among people
Social Characteristics of our CommunitySocial Characteristics of our Community Small sized and homogenous populationSmall sized and homogenous population Sophisticated, trained and qualified workforceSophisticated, trained and qualified workforce High literacy levelsHigh literacy levels One child, one PC One child, one PC
Political Reasons Political Reasons Tradition of democracyTradition of democracy StabilityStability
Economic Policy of the Economic Policy of the Uruguayan Governments Uruguayan Governments
over the Last Three over the Last Three DecadesDecades • Market economy Market economy
• Free inflow and outflow of foreign currency Free inflow and outflow of foreign currency • No exchange rate controlsNo exchange rate controls• Bank secrecy protectionBank secrecy protection
• No foreign investment registryNo foreign investment registry• Equal treatment to foreign Equal treatment to foreign
investors guaranteed by lawinvestors guaranteed by law
Legal PerspectiveLegal PerspectiveSophisticated legal systemIndependent judicial systemEnforceability of foreign rulings and
awardsEnforceability of contracts on foreign
currencyNo taxes on foreign sourced
incomeMERCOSURInvestment Promotion Act
Investment climateInvestment climate: B+ : B+ grade (Standard and grade (Standard and Poors - 3 March 2008)Poors - 3 March 2008)
Currently Growing Currently Growing SectorsSectors
Pulp projects (BOTNIA, ENCE)Pulp projects (BOTNIA, ENCE)ForestryForestry
Agribusiness (meat, wool and soybean) Agribusiness (meat, wool and soybean) Real EstateReal EstateCall CentersCall Centers
Transparency Transparency International 2006International 2006
Source: Source: www.transparency.orgwww.transparency.org
Economic FreedomEconomic FreedomIndex 2007Index 2007
Source: Heritage Foundation
Factors considered:- Corruption- Non Tariff Barriers imposed on trade- Tax burden from the government- Respect for the law- Regulatory burden- Restrictions on banks- Job Market regulations- Black Market activities
Democracy IndexDemocracy Index
Source: The EconomistSource: The Economist
The Economist – “The World in 2007”
Survey on Democracy around the world
Fu
ll D
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Fla
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5 Categories:1. Electoral
process and pluralism
2. Functioning of government
3. Political participation
4. Political culture
5. Civil liberties
HighlightsHighlights – Major Business – Major Business OpportunitiesOpportunities
Distribution and logistics center for the regionDistribution and logistics center for the regionMERCOSUR: HeadquartersMERCOSUR: HeadquartersMultiple tax incentives:Multiple tax incentives:
- Free ports- Free ports
- Industrial parks- Industrial parks
- Software - Software
- Free trade zones- Free trade zones
Uruguayan Free ZonesUruguayan Free Zones
I. ConceptI. Concept
Areas excluded of customs territoryAreas excluded of customs territory
Uruguayan Free ZonesUruguayan Free Zones
II. LocationII. LocationRIVERARIVERA
MONTEVIDEOMONTEVIDEO
RIO NEGRORIO NEGRO
NUEVA NUEVA HELVECIAHELVECIA
COLONIACOLONIA
Uruguayan Free ZonesUruguayan Free Zones
III. Pulp ProjectsIII. Pulp Projects
BOTNIA and ENCE are FZBOTNIA and ENCE are FZ
Uruguayan Free ZonesUruguayan Free Zones
IV. ActivitiesIV. ActivitiesTrading hub in the region:Trading hub in the region:
- Financial servicesFinancial services- Bank Rep. OfficesBank Rep. Offices- Logistic providersLogistic providers- Trading operatorsTrading operators
- Call centersCall centers- Software development industriesSoftware development industries
Uruguayan Free ZonesUruguayan Free Zones
V. FZ UsersV. FZ UsersConceptConceptSpecial bylaws Special bylaws Agreement with a FZ operator Agreement with a FZ operator Filing with FZ BureauFiling with FZ BureauCustomer practice: acquisition of a shelf Customer practice: acquisition of a shelf
corporation corporation
Uruguayan Free ZonesUruguayan Free Zones
VI. Tax TreatmentVI. Tax TreatmentEntrance and exit of goods abroad are tax Entrance and exit of goods abroad are tax
exempted. exempted. Circulation of goods and services within the Circulation of goods and services within the
FZ is exempted from sales taxes. FZ is exempted from sales taxes. Sale of products into Uruguayan territory = Sale of products into Uruguayan territory =
import transaction. import transaction.
Uruguayan Free ZonesUruguayan Free Zones
VI. Tax TreatmentVI. Tax TreatmentRemittance of dividends abroad (by Users) is Remittance of dividends abroad (by Users) is
untaxed (as opposed to companies who are not untaxed (as opposed to companies who are not FZ operators).FZ operators).
Payment of technical assistance fee exempted.Payment of technical assistance fee exempted.Payment of interests to foreign entities Payment of interests to foreign entities
exempted.exempted.Payment of royalties abroad exempted.Payment of royalties abroad exempted.
Uruguayan Free ZonesUruguayan Free Zones
VII. RequirementVII. Requirement
At least 75% of the personnel employed by At least 75% of the personnel employed by the FZ Users must be native or legal the FZ Users must be native or legal
Uruguayan citizenUruguayan citizen
Tax and Corporate Regimes Tax and Corporate Regimes
I. Tax AspectsI. Tax Aspects• Only locally sourced income is taxed.Only locally sourced income is taxed.• Corporations with no activity and assets in Corporations with no activity and assets in
Uruguay are subject to no taxation in Uruguay Uruguay are subject to no taxation in Uruguay except for an annual fixed duty of US$ 400 per except for an annual fixed duty of US$ 400 per year.year.
• Remittance of dividends abroad is exempted when Remittance of dividends abroad is exempted when the local company has no locally sourced income.the local company has no locally sourced income.
• Transfer of shares of an Uruguayan bearer share Transfer of shares of an Uruguayan bearer share corporation is exempted from non residents corporation is exempted from non residents income tax.income tax.
Tax and Corporate Regimes Tax and Corporate Regimes
II. Corporate AspectsII. Corporate Aspects
• Bearer shares corporations admitted. Bearer shares corporations admitted. • Single shareholder admitted. Single shareholder admitted. • Shareholders may be all foreign non residents, Shareholders may be all foreign non residents,
individuals or legal entities.individuals or legal entities.• Directors may be nationals or foreigners, Directors may be nationals or foreigners,
individuals or legal entities. One is sufficient.individuals or legal entities. One is sufficient.
Other Tax Structures Other Tax Structures
II. Corporate AspectsII. Corporate Aspects
• Transfer of the stock is effected by means of the Transfer of the stock is effected by means of the physical delivery of the stock certificate.physical delivery of the stock certificate.
• Shareholders Meetings may be gathered per Shareholders Meetings may be gathered per proxy.proxy.
• Re-domiciliation is possible (into Uruguay or Re-domiciliation is possible (into Uruguay or abroad).abroad).
• Holding companies expressly contemplated under Holding companies expressly contemplated under local legislation.local legislation.