Free Zone promotion and development aiming at fomenting investment, exports, employment and international economic integration have been declared by law to be of national interest.
Free Zones may be government-run or private. In both cases, they must be authorized and monitored by the Free Zone Area at the General Trade Bureau of the Ministry of Economy. Currently, Free Zones exist in the cities of Colonia, Nueva Palmira, Montevideo, Florida, Rivera, Río Negro, Nueva Helvecia and Libertad.
Free Zones are ideal for the following activities:
- Sales, storage, preparation, classification, fractioning, mixing, assembly and disassembly of merchandise or raw materials of international or domestic origin.
- Installation and operation of factories.
- Rendering of all types of services, both within the Free Zone as well as to other countries.
- Free Zone users may also render the following services to domestic non-free zone areas of the country: e-mail, distance education, electronic signature certificate issuance and international call centers (except in cases where the only or main destination is national territory).
- Likewise, logistics support services and IT consulting and training services may be carried out from a Free Zone to non-free zone territory (although in this case, activities are subject to the general tax system).
A significant difference between Uruguayan Free Zones and their foreign counterparts is that in Uruguay, Free Zones are not only customs enclaves, but also grant users broad national tax exemptions. Free Zone users enjoy the following tax benefits (when 75% of personnel are Uruguayan citizens):
- Exemption from all current and future national taxes, including the Economic Activities Income Tax (IRAE).
- Dividend payments by the Free Zone user to shareholders domiciled abroad are not subject to tax retentions in Uruguay.
- Entry and departure of goods and services are exempt from all taxes and any other equivalent instrument.
The aforementioned exemptions do not cover social security contributions, except for foreign personnel, who may opt to not contribute to the Uruguayan social security system.
Another attraction of the Free Zone system is the exemption from IRAE for the following income obtained by non-resident entities, even when they are not considered Free Zone users:
- Income from activities carried out on foreign merchandise in transit or stored at the Free Zones when the merchandise is not from or for national customs territory.
- Income from aforementioned merchandise when destined for national customs territory, as long as said operations do not exceed 5% of the total amount of sales in the period for in-transit or stored merchandise.
From a customs standpoint, goods entered into Free Zones from the national territory are considered exports, and the departure of goods from Free Zones abroad is completely tax free.
The introduction of goods from a Free Zone to non-free zone national territory is considered importing and is subject to corresponding tariffs. Meanwhile, merchandise from Uruguayan Free Zones that enters Mercosur member countries are subject to the common external tariff that is in effect for goods from countries outside Mercosur.
It should also be noted that the State's commercial and industrial monopolies are not in effect in Free Zones.
Contact Information for the Tax Free Zones
Aguada Park - http://www.aguadapark.com/
Colonia Free Zone - http://www.zonafrancacolonia.com/
Colonia Suiza Free Zone - http://www.coloniasuiza.com/
Floridasur Free Zone - http://www.floridasur.com.uy
Libertad Free Zone - http://www.zonafranca.com.uy/
Nueva Palmira Free Zone - http://www.zfrancas.gub.uy/espanol/zfuruguay/nuevapalmira/index.htm
Río Negro Free Zone - http://www.zfrancas.gub.uy/espanol/zfuruguay/rionegro/index.htm
Rivera Free Zone - http://www.zfrancas.gub.uy/espanol/zfuruguay/rivera/index.htm
WTC Free Zone - http://www.wtcfreezone.com/
Zonamerica - http://www.zonamerica.com/
Source: http://www.zfrancas.gub.uy/espanol/zfuruguay/index.html (in Spanish)
