Why you should consider establishing a trading business in Uruguay:
- Trade connections and agreements,
- Free port and airport
- Free trade zones,
- Fiscal benefits
- An outstanding geographical location for regional operations.
Uruguay is well-connected via trade agreements
Uruguay’s GDP grew by 2.7% in 2017. This has brought the country’s growth streak to an unprecedented 15 years. While neighboring countries like Brazil or Argentina are seeing fluctuations in their GDP, Uruguay remains a force of stability. Uruguay is now one of the most attractive Latin American jurisdictions for the establishment of companies. Uruguay allows 100% foreign ownership of local companies, and companies can be formed with only one shareholder.
One of the key benefits of setting up shop in Uruguay is its far-reaching trade agreements. Trade agreements ensure a smoother flow of goods across borders. For trading companies in Uruguay, this ensures a reduction in export or import taxes, which benefits business. Also, Uruguay is part of the World Trade Organization (WTO). The WTO is an alliance made up of 164 countries worldwide (plus 23 ‘observer’ governments) that have relaxed the ‘red tape’ at their borders to facilitate trade. However, Uruguay reaps the biggest benefits from its membership to two major trade associations. These associations are ALADI and MERCOSUR.
Uruguay has also established free trade zones within its border. These free zones are areas in Uruguayan territory which can be both public or privately owned. Companies can develop any business, industrial and service activity in these zones. These areas are located near the metropolitan area.
Operating in free trade zones gives companies various attractive tax advantages, granted by law.
Free Trade Zones are a haven for business activity
Free trade zone users are exempt from all existing and future national Uruguayan taxes. Additionally, Uruguay offers fiscal benefits within the following taxes for companies operating in free trade zones such as exoneration of:
- Corporate Income Tax (IRAE)
- Net worth taxes (IP)
- Value Added Tax (VAT)
- Internal Specific TAX (IMESI)
- Tax on Public Limited Companies (ICOSA)
Uruguay’s Free Trade Zones liberate businesses and offer great financial benefits. These zones are designed to facilitate business success, illustrating Uruguay’s willingness to attract foreign investors.
A strategic location for regional business
Uruguay also has a promising geographical location; the coastline allows the country to be a home for trade by sea. Furthermore, because of its central location, there is a lot of opportunity for distributing further into Latin America. This is an opportunity the government seeks to capitalize on and consequently, Uruguay has a beneficial regulatory framework for logistics companies.
Uruguay’s regulatory framework offers significant advantages for logistics operations, offering high incentives for the establishment of Regional Distribution Centers (RDC) and for managing goods in transit. This includes free trade zones, free port and airport access, bonded warehouses, and temporary admission systems.
Uruguay has the heaviest road transport flow in all of Latin America, and its port infrastructure is the only port in the South Atlantic coast that uses a Free Port system.
Need assistance? We can help you
The government continues to develop industrial, business, and service activities in Uruguay, and as the government welcomes foreign business and foreign capital, investment opportunities in the region grow. Investors see Uruguay as one of the most appealing destinations in Latin America to set up a trading business.
If you are interested in taking advantage of the benefits for trading businesses in Uruguay, get in contact with HD8 ASSOCIADOS. We are experienced in helping companies to develop their commercial operations in Latin America.
Reach out to a member of our team today at: email@example.com and see how we can support your business development.