Investment Climate Statements for 2019 - Uruguay

2019 Investment Climate Statements: Uruguay

Executive Summary

The Government of Uruguay (GoU) recognizes the important role foreign investment plays in economic development and continues to maintain a favorable investment climate that does not discriminate against foreign investors. Uruguay has a stable legal system in which foreign and national investments are treated alike, most investments are allowed without prior authorization, and investors can freely transfer the capital and profits from their investments abroad. International investors can choose between arbitration and the judicial system to settle disputes. Local courts recognize and enforce foreign arbitral awards.

The World Bank’s 2019 “Doing Business” Index placed Uruguay fifth out of twelve countries in South America (and 95th out of 190 worldwide). Even with some tax incentives for investors, foreign direct investment (FDI) remains low compared to the period before 2015. Domestic and FDI dropped significantly between 2015 and 2018.

About 120 U.S. firms operate locally and distribute their investments among a wide array of sectors, including forestry, tourism and hotels, services, and telecommunications. U.S. firms have not identified corruption as an obstacle to investment. In 2018, Transparency International ranked Uruguay as the most transparent country in Latin America and the Caribbean. Uruguay is a stable democracy. Political risk is low, and there have been no recent cases of expropriation.

Uruguay has strengthened bilateral trade, investment, and political ties with China, its principal trading partner. In August 2018, Uruguay was the first country in the Southern Cone to join the Chinese One Belt One Road initiative. Since 2016, Uruguay and China have held numerous meetings concerning trade issues, but no comprehensive bilateral free trade agreement has been advanced despite both sides’ stated aims to do so.

Uruguay has bilateral investment treaties with over 30 countries, including the United States. The United States does not have a double-taxation treaty with Uruguay. Both countries have a Trade and Investment Framework Agreement in place, and have signed agreements on open skies, trade facilitation, customs mutual assistance, promotion of small and medium enterprises, and social security totalization.

A 2018 survey by Uruguay’s export and investment promotion agency and the Ministry of Economy shows that about half of foreign investors are satisfied or very satisfied with Uruguay´s investment climate, principally its rule of law, macroeconomic stability, strategic location, and investment incentives. Almost all investors were satisfied or highly satisfied with Uruguay´s free trade zones and free ports. On the other hand, roughly one-fourth of investors were dissatisfied with at least one aspect of doing business locally, and expressed concerns about high labor costs and taxes, as well as unions and labor conflicts.

Labor unions are vocal and labor conflicts can escalate fast, with strikes affecting overall productivity. The World Economic Forum’s 2018 Global Competitiveness Index ranked Uruguay 53rd out of 140 countries surveyed, and 138th in labor relations. Many U.S. and regional investors have voiced concerns that Uruguayan labor unions can legally occupy work spaces and in that way shut down operations with few repercussions. Private sector representatives have also pointed out that labor unions’ close relationships with the current government mean that the tripartite salary councils often increase salaries without sufficient regard for companies’ ability to absorb the increased costs.

Uruguay is a founding member of MERCOSUR, the Southern Cone Common Market composed of Argentina, Brazil, Paraguay, and Venezuela. [Note: Venezuela was suspended from MERCOSUR in December 2016 for failing to adopt the bloc’s democratic principles. End Note.] Uruguay has separate trade agreements with Bolivia, Chile, Colombia, Ecuador, and Peru, all of which are also MERCOSUR associate members. Montevideo is the headquarters of the MERCOSUR Secretariat and MERCOSUR’s parliamentary institution PARLASUR. In 2004, Uruguay and Mexico deepened a 1999 agreement, which resulted in Uruguay’s first comprehensive trade agreement with a non-MERCOSUR country. In October 2016, Uruguay signed an agreement with Chile to extend and augment the existing free trade agreement to increase trade in goods and services. The agreement was ratified in mid-2018 after a major internal debate within the ruling Frente Amplio ruling coalition.

Uruguay’s strategic location (in the center of MERCOSUR´s wealthiest and most populated area), and its special import regimes (such as free zones and free ports) make it a well-situated distribution center for U.S. goods into the region. Several U.S. firms warehouse their products in Uruguay’s tax-free areas and service their regional clients effectively. With a small market of high-income consumers, Uruguay can also be a good test market for U.S. products.

In 2012, Uruguay regained the international credit ratings agencies’ investment grade status it had enjoyed from 1998 through 2002, when the country was struck by a major economic and financial crisis. While its budget deficit and public debt ratios are relatively high compared to its rating peer group, as of April 2019, Standard&Poor’s and Moody’s rate Uruguay two steps above the investment grade threshold with a stable outlook.

Table 1: International Rankings and Statistics

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 23 of 180
World Bank’s Doing Business Report “Ease of Doing Business” 2019 95 of 190
Global Innovation Index 2018 62 of 126
U.S. FDI in Partner Country ($M USD, stock positions) 2017 $1,556
World Bank GNI per capita 2017 $15,250

1. Openness To, and Restrictions Upon, Foreign Investment

Policies towards Foreign Direct Investment

The GoU has traditionally recognized the important role that foreign and local investment plays in economic and social development and works to maintain a favorable investment climate. Uruguay has a stable legal system in which foreign and national investments are treated alike, most investments are allowed without prior authorization, and investors may freely transfer the capital and profits from their investments abroad. Investors can choose between arbitration and the judicial system to settle disputes. The judiciary is independent and professional.

Foreign investors are not required to meet any specific performance requirements. Moreover, foreign investors are not subject to discriminatory or excessively onerous visa, residence, or work permit requirements. The government does not require that nationals own shares or that the share of foreign equity be reduced over time, and does not impose conditions on investment permits. Uruguay normally treats foreign investors as nationals in public sector tenders. Uruguayan law permits investors to participate in any stage of the tender process.

Uruguay’s export and investment promotion agency, Uruguay XXI (, provides information on Uruguay’s business climate and investment incentives, at both a national and a sectoral level. The agency also has several programs to promote the internationalization of local firms and regularly participates in trade missions.

There is no formal business roundtable or ombudsman responsible for regular dialogue between government officials and investors. Some private business associations have suggested that formal, regular dialogue could ease concerns regarding perceived or actual government biases towards labor unions and against the private sector.

In 2017, Uruguay started taxing digital services with value-added and non-resident income taxes. Tax rates vary depending on whether the company provides audiovisual transmissions or intermediation services, and on the geographical locations of the company and of the consumers of the service.

Limits on Foreign Control and Right to Private Ownership and Establishment

Aside from a few limited sectors involving national security and limited legal government monopolies in which foreign investment is not permitted, Uruguay practices neither de jure nor de facto discrimination toward investment by source or origin, with national and foreign investors treated equally.

In general, the GoU does not require specific authorization for firms to set up operations, import and export, make deposits and banking transactions in any particular currency, or obtain credit. Screening mechanisms do not apply to foreign or national investments, and investors do not need special government authorization for access to capital markets or to foreign exchange.

Other Investment Policy Reviews

Uruguay is a member of the UN Conference on Trade and Development (UNCTAD), but the organization has not yet conducted an Investment Policy Review on the country.

Uruguay is not a member of the Organization for Economic Co-operation and Development (OECD), but even so, it has gradually endorsed several principles and joined some of its institutions. Uruguay is a member of the OECD Development Center and its Global Forum on Transparency and Exchange of Information for Tax Purposes, and it participates in its Program for International Student Assessment (PISA). In 2018, high-level Uruguayan government officials expressed interest in joining the OECD’s Investment Committee.

The World Trade Organization published its Trade Policy Review of Uruguay, which included a detailed description of the country’s trade and investment regimes in 2018 and is available at

Business Facilitation

Uruguay is ranked 65st in the World Bank’s “starting a business” sub-indicator, well ahead of its overall aggregate ranking of 95th for the ease of doing business. Domestic and foreign businesses can register operations in approximately seven days without a notary at

Uruguay receives high marks in electronic government. The UN’s 2018 Electronic Government Development and Electronic Participation indexes ranked Uruguay third in the entire Western Hemisphere (after the United States and Canada).

Recently, industrial small to medium-sized U.S. enterprises (SMEs) describe the Uruguayan market as difficult to enter in some sectors of the economy. Those SMEs pointed to legacy business relationships and loyalties, along with a cultural resistance by distributors and clients to trusting new producers. Local law firms working with U.S. companies said that industrial production companies entering the Uruguayan market might have to operate for two years to establish a client base and a revenue stream. U.S. company representatives said they filed a complaint with Uruguay’s Commission for the Defense of Competition regarding monopolistic business practices in Uruguay’s chemical production market.

Outward Investment

The government does not promote nor restrict domestic investment abroad.

2. Bilateral Investment Agreements and Taxation Treaties

In November 2005, Uruguay and the United States signed a Bilateral Investment Treaty (BIT) to promote and protect reciprocal investments. The BIT, which entered into force on November 1, 2006, grants national and most-favored-nation treatment to investments and investors sourced in each country. The agreement also includes detailed provisions on compensation for expropriation, and a precise procedure for settling bilateral investment disputes. The annexes include sector-specific measures not covered by the agreement and specific sectors or activities that governments may restrict further. The BIT is available at

Besides the United States, Uruguay has Bilateral Investment Agreements in force with 30 countries from different regions. The full list is available at

Uruguay and the United States do not have double taxation or tax information agreements in place.

Over the past decade, the GoU has endorsed OECD standards on transparency and exchange of information and upgraded several regulations prompted by the OECD including Uruguay in its 2009 grey list of jurisdictions that had not “committed to implement the internationally agreed tax standard.” In 2012, the OECD acknowledged the GoU’s progress and allowed Uruguay to move on to the second phase of the review process, consisting of a survey of the practical implementation of the standards. In 2016, the GoU passed a fiscal transparency law. In 2017, it began implementing an automatic exchange of tax information with the countries with which it has established Tax Information Exchange Agreements (TIEAs). In November 2018, Uruguay hosted the annual meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, which marked the worldwide rollout of automatic exchange of financial account information between countries that have TIEAs.

The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes indicates that Uruguay has exchange-of-information relationships with 35 jurisdictions through 21 double-taxation agreements and 16 Tax Information Exchange Agreements. The full list is available at

A social security totalization agreement with the United States was signed in December 2017, and took effect in November 2018. The agreement eliminates dual social security taxation and helps workers who have split their careers between the United States and Uruguay to meet the minimum eligibility requirements (years worked) more quickly by adding together years worked in both countries to qualify for benefits (

3. Legal Regime

Transparency of the Regulatory System

Transparent and streamlined procedures regulate local and foreign investment in Uruguay. Uruguay has state and national regulations. The Constitution does not provide for supra-national regulations. Most draft laws, except those having an impact on public finances, can start either in the executive branch or in the parliament. The President needs the agreement of all ministries with competency on the regulated matter to issue decrees. Ministers may also issue resolutions. All regulatory actions—including bills, laws, decrees, and resolutions—are publicly available at

The U.S. governemnt’s Fiscal Transparency Report labels Uruguay as a fiscally transparent country. Accounting, legal, and regulatory procedures are transparent and consistent with international norms. The government only occasionally proposes laws and regulations in draft form for public comment. Parliamentary commissions typically engage stakeholders while discussing a bill. Non-governmental organizations or private sector associations do not manage any informal regulatory processes.

Article 10 of the U.S.–Uruguay BIT mandates that both countries publish promptly or make public any law, regulation, procedure, or adjudicatory decision related to investments. Article 11 sets transparency procedures that govern the accord.

International Regulatory Considerations

Uruguay is a member of several regional economic blocs, including MERCOSUR and the Latin American Integration Association, neither of which have supranational legislation. In order to create local law Uruguay’s parliament must ratify these blocs’ decisions.

Legal System and Judicial Independence

The legal system in Uruguay follows civil law based on the Spanish civil code. The highest court in the country is the Supreme Court of Uruguay, which has five judges. The executive branch nominates judges and the Parliament’s General Assembly appoints them. Judges serve a ten-year term and can be reelected after a lapse of five years following the previous term. Other subordinate courts include the court of appeal, district courts, peace courts, and rural courts.

In 2017, Uruguay enacted a new criminal procedural code, expressed in Law No. 19.293. The law passed in December 2014, but because the changes it made were very significant it took three years for the authorities to bring it into force. The process for criminal cases is now accusatory instead of inquisitorial. Uruguay is implementing changes to improve criminal procedures carried out by police, prosecutors, and judges. Judges will not be involved at the start of an investigation or arrest, and prosecutors will take on a prominent role in leading the investigations. Other fundamental changes include the right to bail, instead of the courts’ remanding individuals into custody to await trial, and opening up hearings to the public.

The judiciary remains independent of the executive branch. Critics of the court system complain that its civil sector can be slow. The executive branch rarely interferes directly in judicial matters, but at times voices its dissatisfaction with court rulings. Investors can appeal regulations, enforcement actions, and legislation. International investors may choose between arbitration and the judicial system to settle disputes.

Laws and Regulations on Foreign Direct Investment

Uruguayan law treats foreign and domestic investment alike. Law 16,906 (passed in 1998) declares that promotion and protection of investments made by both national and foreign investors are in the nation’s interest, and allows investments without prior authorization or registration. The law also provides that investors can freely transfer their capital and profits abroad and that the government will not prevent the establishment of investments in the country.

Prompted by a fall in domestic and foreign investment since 2015, in May 2018 the GoU amended Decree 002/12 (with Decree 143/018) to strengthen incentives for investment further and advance a number of the GoU´s strategic goals, such as creating jobs, fostering research and development, and developing clean production.

Government tenders favor local products or services, provided that they are of comparable quality and any cost increase is no more than 10 percent. U.S. and other foreign firms are able to participate in local or national government financed or subsidized research and development programs.

Uruguay’s export and investment promotion agency, Uruguay XXI, helps potential investors navigate Uruguayan laws and rules.

Competition and Anti-Trust Laws

Uruguay has transparent legislation established by the Commission for the Promotion and Defense of Competition at the Ministry of Economy to foster competition. The main legal pillars (Law No. 18,159 and decree 404, both passed in 2007) are available at the commission’s site: percent20competencia—uruguay.html.

A 2017 peer review of Uruguay´s competition law and policy is available at

In 2001, the GoU created regulatory and controlling agencies for telecommunications (URSEC) and water and energy. Notwithstanding, in 2010, the executive branch transferred URSEC’s policy-design capacity to the National Telecommunications Directorate , leaving URSEC with only regulatory control attributes.

The GoU passed an Audiovisual Communications Law (No 19,307) in December 2014. Also known as the media law, it includes provisions on market caps for cable TV providers that could limit competition. In April 2016, Uruguay’s Supreme Court ruled that these market caps and some local content requirements were unconstitutional. In late 2017, the Executive Branch presented a draft regulation that, as of April 2019, was pending approval.

Expropriation and Compensation

Uruguay’s constitution declares property rights an “inviolable right” subject to legal determinations that may be taken for general interest purposes and states that no individuals can be deprived of this right—except in case of public need and with fair compensation.

Article 6 of the U.S.–Uruguay BIT rules out direct and indirect expropriation or nationalization of private property except under specific circumstances. The article also contains detailed provisions on how to compensate investors, should expropriation take place. There have been no cases of expropriation of investment from the United States or other countries in the past five years.

Dispute Settlement

International Center for the Settlement of Investment Disputes (ICSID) Convention and New York Convention

Uruguay became a member of the ICSID in September 2000 and is a signatory of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor–State Dispute Settlement

Local courts recognize and enforce foreign arbitral awards issued against the government. The U.S.–Uruguay BIT devotes over ten pages to establishing detailed and expedited dispute settlement procedures.

Over the past decade, two U.S. companies have sued the GoU before the World Bank´s ICSID. In 2010, the tobacco company Philip Morris International sued the GoU, arguing that new health measures involving cigarette packaging amounted to unfair treatment of the firm. They filed the case under the Uruguay–Switzerland Bilateral Investment Treaty, and in 2016 the ICSID ruled in the GoU’s favor. In 2015, U.S. telecom company Italba also sued the GoU before ICSID, which in March 2019 ruled in the GoU’s favor.

International Commercial Arbitration and Foreign Courts

Commercial contracts frequently contain mediation and arbitration clauses and local courts recognize them. Investors may choose between arbitration and the judicial system to settle disputes. Local courts recognize and enforce foreign courts’ arbitral awards.

Duration of Dispute Resolution

Uruguay’s judiciary is independent. The average time to resolve a dispute, counted from the moment the plaintiff files the lawsuit in court until payment, is about two years, according to contacts in local law firms. The courts’ decisions are legally enforced and Uruguayan law respects international arbitration awards.

Bankruptcy Regulations

The Bankruptcy Law passed in 2008 (No. 18,387) expedites bankruptcy procedures, encourages arrangements with creditors before a firm may go bankrupt, and provides the possibility of selling the firm as a single unit. Bankruptcy has criminal and civil implications with intentional or deliberate bankruptcy deemed a crime. The law protects the rights of creditors according to the nature of the credit, and workers have privileges over other creditors.

The World Bank’s 2018 Doing Business Report ranks Uruguay third out of twelve countries in South America for its ease of “resolving insolvency.” Uruguay ranks 70th globally in this sub-index, well ahead of its overall aggregate global ranking of 95th for ease of doing business.

4. Industrial Policies

Investment Incentives

The investment promotion regime, regulated by Law 16,906 (passed in 1998), grants automatic tax incentives of up to 40 percent of corporate income tax to several activities, including personnel training; research, scientific and technological development, reinvestment of profits, and investments in industrial machinery and equipment. The GoU provides other benefits to industrial and agricultural firms by regulatory decree.

In addition to the automatic tax exemptions, Uruguay has several other incentives for greenfield and brownfield investments that help achieve some of the government´s strategic goals, including creating jobs, contributing to geographical decentralization away from the capital, increasing exports, promoting research and development, and fostering the use of clean technologies. The principal incentive consists of the deduction from corporate income tax of a share of total investment over a pre-defined period. Other incentives include the exemption from tariffs and taxes on imports of capital goods and the refunding of the Value Added Tax paid on domestic purchases of certain goods.

There are also special regimes to promote specific sectors. Certain activities—such as the purchasing of land, real estate, or private vehicles—are not eligible for the benefits. Please refer to a detailed document on incentives to investment, available in English at

Foreign Trade Zones/Free Ports/Trade Facilitation

The GoU has increasingly promoted Uruguay as a regional, world-class logistics and distribution hub. In 2010, the GoU created the National Logistics Institute (INALOG by its Spanish acronym), a public-private sector institution that seeks to coordinate efforts towards establishing Uruguay as the leading MERCOSUR distribution hub. INALOG and Uruguay XXI have issued several reports on Uruguay’s role and advantages as a logistics hub.

The GoU established free trade zones (FTZs) in 1987 (Law 15,921) and in 2017 passed new legislation (Law 19,566). The new law provides for minor changes in tax benefits, streamlines the requirements and activities that companies must accomplish in order to be able to operate inside a FTZ, and improves international cooperation related to the prevention of international tax evasion. Full legislation and regulations are available at Almost all foreign investors surveyed in 2018 were satisfied or highly satisfied with Uruguay´s free trade zones and free ports.

There are 11 FTZs located throughout the country. Most FTZs host a wide variety of tenants performing various services, including, financial, software development, call centers, warehousing, and logistics. One FTZ is dedicated exclusively to the development of pharmaceuticals, and two to the production of paper pulp. MERCOSUR regulations treat products manufactured in most member states’ FTZs, with the exception of Tierra del Fuego, Argentina and Manaus, Brazil, as extra-territorial and charge them the common external tariff upon entering any member country. As a result, industrial production in local FTZs is usually destined for non-MERCOSUR countries.

Firms may bring foreign and Uruguayan origin goods, services, products, and raw materials into the FTZs. Firms may hold, process, and re-export the goods without payment of Uruguayan customs duties or import taxes. Uruguay exempts firms operating in FTZs from national taxes. Laws governing legal monopolies do not apply within the FTZs. Additionally, the employer does not pay social security taxes for non-Uruguayan employees who have waived coverage under the Uruguayan social security system. Uruguay treats goods of Uruguayan origin entering FTZs as Uruguayan exports for tax and other legal purposes.

Uruguay has other special import regimes in place called “temporary admission,” “bonded warehouse,” and “free port.” The temporary admission regime allows manufacturers to import duty-free raw materials, supplies, parts, and intermediate products they will use in manufacturing products for export. However, the regime requires government authorization, and firms must export all finished products within 18 months. Firms do not have to be in a specific location to benefit from temporary admission. Free ports and bonded warehouses are special areas where goods that remain on the premises are exempted from all import-related duties and tariffs. The two main differences between free ports and bonded warehouses are that goods can stay for an unlimited amount of time in free ports and up to one year in bonded warehouses, and that firms may not significantly modify goods in free ports. Firms may engage in “industrialization” in bonded warehouses. Firms operating in both premises may re-label and re-package merchandise.

Law 17,547 passed in August 2002 allows for the establishment of industrial parks. Several additional decrees signed since 2007 allow for the establishment of sector-specific industrial parks. Industrial park advantages include tax exemptions and benefits, and private sector, national, or local governments may establish them. There are three industrial parks that operate under Law 17,547, and eleven that operate under state’s regulations.

Performance and Data Localization Requirements

Foreign investors are not required to meet any specific performance requirements, and have not reported impediments or onerous visa, residence, or work permit requirements. The government does not require that nationals own shares or that the share of foreign equity be reduced over time, and does not impose conditions on the number of foreign workers or on investment permits. A labor-related requirement is that tenants of free trade zones employ at least 50 percent Uruguayan workers.

Article 8 of the U.S.–Uruguay BIT bans both countries from imposing performance requirements on new investments, or tying the granting of existing or new advantages to performance requirements.

Uruguay does not require foreign investors to use local content in goods or technology in order to invest. However, local content may be required in some sectors in order to become eligible for special tax treatment or government procurements. For instance, in 2016 the state-owned electric utility (UTE) offered a number of long-term purchase agreements for wind and solar generated electricity that included 20 percent local content requirements.

Uruguay does not require foreign IT providers to turn over source code or provide access for surveillance. Companies can freely transmit customer or business-related data across borders. Banks can transmit information out of Uruguay on their loan portfolios but not on their depositor base. Banks are obliged to provide information once a year to the local tax authority on their depositors. This information is exchanged with tax authorities from countries that enjoy Tax Information Exchange Agreements with Uruguay (Uruguay does not have a TIEA with the United States). Legislation governs the central government’s computer system security requiring all assets to remain in Uruguay, except those that do not constitute a risk for the government. The GoU’s Agency for e-Government and Information Society is in charge of enforcing this regulation. In 2016, the state-owned telecommunications company ANTEL inaugurated a USD 50 million, tier III data center, at the time one of five such facilities in Latin America. In 2017, ANTEL teamed with Google to extend an underwater fiberoptic line to Uruguay, connecting Uruguay directly with the U.S. network.

5. Protection of Property Rights

Real Property

The GoU recognizes and enforces secured interests in property and contracts. Mortgages exist, and Uruguay has a recognized and reliable system of recording such securities. Uruguay’s legal system protects the acquisition and disposition of all property, including land, buildings, and mortgages.

Law 19,283, passed in 2014, prevents foreign governments from buying land, either directly or in association with private companies. Traditional use rights are not applicable as there is no applicable indigenous community in Uruguay. The vast majority of land has clear property titles.

The three administrations that have ruled since 2005 have supported the unions’ position that sit-ins or occupation of workplaces are an extension of workers’ right to strike, thus enabling workers to lawfully occupy workplaces. Business chambers have opposed extending the definition of the right to strike to include the physical occupation of a workplace. The chambers have filed cases before the International Labor Organization (ILO) objecting to workplace occupations (see Labor Section for further information).

Intellectual Property Rights

Uruguay is a member of the World Intellectual Property Organization (WIPO), and a party to the Bern and Universal Copyright Conventions, as well as the Paris Convention for the Protection of Industrial Property. In March 2017, Uruguay’s Office of the President sent a bill to the Uruguayan parliament for approval and to adhere to WIPO’s Patent and Cooperation Treaty. As of April 2019, the bill remained before the Senate’s International Affairs Commission.

The quality of intellectual-property (IP) protection and level of enforcement has improved over time. The Office of the U.S. Trade Representative (USTR) removed Uruguay from its Special 301 Watch List in 2006 in response to Uruguay’s progress in enforcing intellectual property rights, especially with respect to copyright enforcement. As of April 2018, Uruguay remains off the USTR Watch List.

Uruguay was included in USTR’s 2014 Notorious Markets Report (for an increase in reports of counterfeiting and piracy from its free trade zones), and was removed from the Report in 2015 (due to the passage of a decree that imposed stricter customs controls on free zones). The 2015 decree gave Customs officials the authority to operate inside free trade zones, control the flow of incoming and outgoing goods, and fine both the owners of counterfeit goods and the storage providers that facilitate distribution of counterfeits. Since 2016, Uruguay has not been included in the Notorious Markets Report.

Some industry groups criticize the slowness of the patent-granting process, as well as the lack of data protection for proprietary research submitted as part of the grant process. They also criticize an amendment to the Patent Law (passed in a 2013 omnibus law) that eliminated provisional protection for patents during patent pendency, which removed the ability of patent right holders to claim damages for infringement of their rights from the date of the patent application filing up to its granting date.

While enforcement of trademark rights has improved in recent years, local citizens have sometimes managed to register trademarks without owners’ prior consent.

Customs officers have border measures authority for trademark protection. After temporarily freezing a shipment of suspicious goods, Customs has to communicate with the local representatives of the trademarks’ right-holders to determine the legality of the goods and seek cooperation. Customs is responsible for paying for the storage and the local representatives are responsible for paying for the destruction of any counterfeit goods.

Uruguay tracks and reports on Custom’s seizures of goods, some of which are counterfeit. Information can be found at However, there is no centralized dedicated reporting system for seizures of counterfeit goods.

Resources for Rights Holders

Post’s Economic Officer covering IP issues is:

Ms. Salina Rico, Economic Unit
Lauro Muller 1776
Tel: (5982) 1770-2449

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at

For questions concerning completion of this section or anything related to IP, please contact EB/TPP/IPE Charles Randolph at or

6. Financial Sector

Capital Markets and Portfolio Investment

Uruguay passed a capital markets law (No. 18,627) in 2009 to jumpstart the local capital market. However, despite some very successful bond issuances by public firms, the local capital market remains underdeveloped and highly concentrated in sovereign debt. Such under-development makes it very difficult to finance business ventures through the local equity market, and restricts the flow of financial resources into the product and factor markets. Due to its underdevelopment and lack of sufficient liquidity, Uruguay typically receives only “active” investments oriented to establishing new firms or gaining control over existing ones and lacks “passive investments” from major investment funds.

The government maintains an open attitude towards foreign portfolio investment; there is no effective regulatory system to encourage or facilitate it. Uruguay does not impose any restrictions on payments and transfers for current international transactions.

Uruguay allocates credit on market terms, but long-term banking credit has traditionally been difficult to obtain. Foreign investors can access credit on the same market terms as nationals.

As part of the process of complying with OECD requirements (see Bilateral Investment Agreements section), the GoU banned “bearer shares” in 2012, which had been widely used. Private firms do not use “cross shareholding” or “stable shareholder” arrangements to restrict foreign investment, nor do they restrict participation in or control of domestic enterprises.

Money and Banking System

Uruguay established The Central Bank of the Uruguay (BCU) in 1967 as an autonomous state entity. Prior to the creation of the BCU, the issuing of currency and managing and supervising of the banking system was handled by the department of the Banco de la República Oriental del Uruguay (BROU). In 1995, Parliament passed a bank charter law that expanded the BCU’s responsibilities and set out the management structure as well as the functions and responsibilities of the bank. With over 40 percent of the market, the government-owned BROU is the nation’s largest bank. The rest of the banking system is comprised of another government-owned mortgage bank and nine international commercial banks. The BCU’s Superintendent of Financial Services regulates and supervises foreign banks or branches.

Mostly related to the United States’ Foreign Account Tax Compliance Act provisions, there have been some cases of U.S. citizens having difficulties establishing a first-time bank account. The U.S. Department of State’s 2017 International Narcotics Control Strategy Report classified Uruguay a “Jurisdiction of Primary Concern” for money laundering.

The GoU started developing a financial inclusion program in 2011, with a view to granting universal access to basic financial services and modernizing the domestic payment system. Since then, and especially after the passage of a financial inclusion law in 2014 (No. 19,210), the use of debit cards, credit cards, and account holders has increased significantly. The GoU has authorized a number of private sector firms to issue electronic currency. In 2018, the BCU and the BROU developed a pilot program to assess the possibility of implementing an electronic currency, the e-peso.

In December 2017 the GoU relaxed several aspects of the 2014 law, such as enabling citizens to withdraw their entire wages from financial institutions. More information, in Spanish, on the GoU´s financial inclusion program is available at

Fintech represents technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment, and crypto-currencies. The first Fintech Forum held in Montevideo in mid-2017 led to the creation of the Fintech Ibero-American Alliance. The Alliance is composed of Fintech associations from Central America and the Caribbean, Colombia, Spain, Mexico, Panama, Portugal, Peru, and Uruguay. While some local firms have developed domestic and international electronic payment systems, emerging technologies like blockchain and crypto currencies remain underdeveloped.

Foreign Exchange and Remittances

Foreign Exchange

Uruguay maintains a long tradition of not restricting the purchase of foreign currency or the remittance of profits abroad. Free purchases of any foreign currency and free remittances were preserved even during the severe 2002 banking and financial crisis.

Uruguay does not engage in currency manipulation to gain competitive advantage. Since 2002, the peso has floated relatively freely, albeit with intervention from the Central Bank aimed at reducing the volatility of the price of the dollar. Foreign exchange can be obtained at market rates and there is no black market for currency exchange. The U.S. Embassy uses official rates when purchasing local currency.

Remittance Policies

Uruguay maintains a long tradition of not restricting remittance of profits abroad.

Article 7 of the U.S.– Uruguay BIT provides that both countries “shall permit all transfers relating to investments to be made freely and without delay into and out of its territory.” The agreement also establishes that both countries will permit transfers “to be made in a freely usable currency at the market rate of exchange prevailing at the time of the transfer.”

Sovereign Wealth Funds

There are no Sovereign Wealth Funds in Uruguay.

7. State-Owned Enterprises

There is no consolidated published list of State-Owned Enterprises. The State still plays a dominant role in the economy and Uruguay maintains government monopolies or oligopolies in certain areas, including the importing and refining of oil, workers’ compensation insurance, and basic telecommunications (landline phones).

Uruguay’s largest state-owned enterprises (SOEs) include the petroleum, cement, and alcohol company ANCAP, telecommunications company ANTEL, electric utility UTE, water utility OSE, and Uruguay’s largest bank BROU. While deemed autonomous, in practice these enterprises coordinate in several areas—mainly on tariffs—with their respective ministries and the executive branch. Their boards are appointed by the executive branch, require parliamentary ratification, and remain in office for the same term as the executive branch. Uruguayan law requires SOEs to publish an annual report, and independent firms audit their balances.

Some traditionally government-run monopolies are open to private-sector competition. Cellular and international long-distance services, insurance, and media services are open to local and foreign competitors. The GoU permits private-sector generation of power and private interests dominate renewable energy production, but the state-owned power company UTE holds a monopoly on the transfer of electrical power through transmission and distribution lines from one utility’s service area to another’s, otherwise known as wheeling rights. State-owned companies tend to have the largest market share even in sectors open to competition. Potential cross-subsidies likely give SOEs an advantage over their private sector competitors.

Uruguay does not adhere to the OECD’s Guidelines on Corporate Governance of State-Owned Enterprises. A parliamentary commission investigated the multi-million dollar losses of the government-owned oil company ANCAP in 2015, which triggered a debate about the need to reform the corporate governance of SOEs. The World Bank has assisted the GoU in strengthening the management of SOEs with no notable policy change.

Privatization Program

Uruguay has not undertaken a major privatization program in recent decades. While Uruguay opened some previously government-run monopolies to private-sector competition, the government continues to maintain a monopoly in the import and refining of petroleum as well as basic telecommunications (land line services).

Parliament passed a public-private partnership (PPP) law by consensus in July 2011 and created regulations with decree 007/12. The law allows various kinds of contracts that enable private sector companies to design, build, finance, operate, and maintain certain infrastructures, including brownfield projects. With some exceptions (such as medical services in hospitals or educational services in schools), PPPs can also be applied to social infrastructure. The return for the private sector company may come in the form of user payments, government payments, or a combination of both.

Historically, the GoU had been unsuccessful in attracting private sector participation in major infrastructure projects via PPPs. In 2015, the GoU passed new regulations (Decree 251/15) to simplify the procedures and expedite the PPP process. To date, Uruguay has constructed a USD 100 million prison under a PPP, and there is a USD 1.9 billion pipeline. The largest project in the pipeline is a 170-miles long railroad (USD 839 million), and there are twelve other projects, in different stages of development, related to roads, education, and health projects.

8. Responsible Business Conduct

The concept of Responsible Business Conduct (RBC) is relatively new to producers, consumers, and the government, and does not have a high-profile plan to encourage its application. Many companies do abide by the principles of RBC as a matter of course. Many multinational companies develop RBC strategies and make significant contributions in promoting safety awareness, better regulation, a positive work environment, and sustainable environmental practices. U.S. companies have proven to be leaders in promoting a greater awareness of and appreciation for RBC in Uruguay. In 2015, the U.S. Department of State awarded a U.S. company the Secretary of State’s Award for Corporate Excellence for its work on environmental sustainability.

Consumers tend to pay attention to the RBC image of companies, especially as it relates to a firm’s work with local charities or community causes. The Catholic University (Universidad Catolica) has a program in place to monitor RBC matters ( In the late 1990s, the Catholic University also founded DERES, a non-profit business organization to promote corporate social responsibility, which currently has over 120 member companies.

9. Corruption

Transparency International ranked Uruguay as having the lowest levels of perceived corruption in Latin America and the Caribbean in its 2018 edition of the Corruption Perception Index. Overall, U.S. firms have not identified corruption as an obstacle to investment.

Uruguay has laws to prevent bribery and other corrupt practices. The GoU approved a law against corruption in the public sector in 1998, and the acceptance of a bribe is a felony under Uruguay’s penal code. The government prosecuted some high-level Uruguayan officials from the executive, parliamentary, and judiciary branches for corruption in recent years. The government neither encourages nor discourages private companies to establish internal codes of conduct.

The Transparency and Public Ethics Board (JUTEP by its Spanish acronym, is the government office responsible for dealing with public sector corruption. Traditionally a low-profile office and still with a limited scope, it gained relevance in face of a case that ended in the resignation of Uruguay´s Vice-President in 2017. Since then JUTEP has played a role in denouncing alleged nepotism in the public sector. There are no major NGOs involved in investigating corruption.

A 2017 law (No. 19,574) sets an integral framework against money laundering and terrorism finance, brings Uruguay into compliance with OECD and UN norms, and includes corruption as a predicate crime.

Conventions Against Corruption

Uruguay signed and ratified the UN’s Anticorruption Convention. It is not a member of the OECD and therefore not party to the OECD’s Convention on Combating Bribery.

Resources to Report Corruption

Government agency responsible for combating corruption:

Ricardo Gil, President
Junta de Transparencia y Ética Publica
Address: Rincon 528, 8th floor, ZC 11000
Tel: (598) 2917 0407

The local branch of Transparency International is

10. Political and Security Environment

Uruguay is a stable democracy in which respect for the rule of law and transparent national debates to resolve political differences are the norm. The majority of the population is committed to non-violence. In 2017, the Economist magazine ranked Uruguay as the only “full democracy” in Latin America, and one of only two in the world “outside of the rich western countries of Europe, North America, and Australasia.” There have been no cases of political violence or damage to projects or installations over the past decade.

Violent crime is on the rise in Uruguay. Rising homicide rates have alarmed business owners. Uruguay’s police forces have complained that they do not receive sufficient backing from the central government and therefore do not take aggressive action against criminal bands. The issue of reduced citizen security is a central issue in the October 2019 presidential elections.

11. Labor Policies and Practices

Tracking strong economic growth, Uruguay’s labor market operated at virtually full employment with rising labor costs until 2014. The economy has cooled since 2015 and the unemployment rate has risen. Uruguay’s National Statistics Institute estimates the total working-age population to be 1.8 million. Uruguay’s unemployment rate increased in 2018 to 8.4 percent (or 151,200 working-age people), up from 7.9 percent in 2017, its highest rate since 2007. Unemployment is structurally higher among the youth, especially young women. In recent years, there has been a significant increase in migrant workers, especially from Venezuela, Cuba, and the Dominican Republic.

Uruguay’s labor system is compliant in law and practice with most international labor standards. The Uruguayan Constitution guarantees workers the right to organize and the law against dismissal for union activities protects the right to strike and union members. Uruguay has ratified numerous International Labor Organization conventions that protect worker rights, and generally adheres to their provisions. Reports by the UN’s Economic Commission for Latin America and the Caribbean indicate that the percentage of informal workers has dropped significantly over the past decade.

The World Economic Forum’s 2018 Global Competitiveness Index ranked Uruguay 53rd of 140 countries surveyed. However, echoing private sector concerns with Uruguayan labor unions and rigid labor laws, Uruguay ranked 138 of 140 countries in the labor relations category. Several of the labor unions espouse strongly leftist-ideological, “anti-imperialist,” and anti-capitalist positions.

Business owners, managers, and government employees often describe local labor laws as rigid and very burdensome. Arguing that unions are particularly aggressive and that labor conflicts escalate quickly, private sector representatives have called for the creation of a labor-dispute process that would define the necessary steps needed before workers may strike or occupy a workplace. Many foreign investors report high absentee rates by employees and resulting lower-than-average productivity rates. Productivity is not included in the negotiations that take place in the Salary Councils.

Labor-intensive businesses are increasingly under stress, and new business creation in Uruguay is not replacing the better-paying jobs lost from exiting private sector enterprises. While global workforces are under stress from increased efficiencies driven by automation and business consolidations, in Uruguay the overbearing labor movement, high taxes, and low corporate profit margins further exacerbate Uruguay’s labor situation.

Labor unions are nominally independent from the government, but in practice have a close relationship with the ruling Frente Amplio coalition and key Ministries. For years, Communist Party leaders have occupied leading positions in the unions and inside the Ministry of Labor. Unionization quadrupled from about 110,000 in 2003 to over 400,000 in 2018 (almost one-fourth of employed workers), and is particularly high in the public sector and some private sectors, such as construction, the metal industry, and banking.

Since 2005, the government has passed over 30 labor laws. Some of these laws promote and protect labor unions, reinstate collective bargaining, regulate outsourcing activities, regulate work times in rural activities, extend the term to claim worker’s rights, relate to the eviction of employees who occupy workplaces, and impose criminal sanctions on employers who fail to adopt safety standards in their firms. In labor trials, the judiciary tends to rule in favor of the worker, assuming the worker to be the disadvantaged party.

Collective bargaining is the rule. Salary Councils are responsible for assessing wage increases annually at a sectoral level. The Councils then apply agreed-upon wage increases to all individual firms in the sector, irrespective of their size or geographical location. Councils consist of a three-party board, which includes representatives from unions, employers, and the government. If unions and employers fail to reach an agreement to determine the wage increase, the government makes the final decision.

Labor provisions apply across the board, and the government does not normally issue waivers to attract or retain investment. Except in the construction sector, social security payments are approximately 13 percent of workers’ basic salary. Including health care insurance, social security, and other charges, employers pay approximately 40 percent of a worker’s basic total salary to the government. In addition, there is a mandatory annual bonus and vacation pay, which result in employers paying the equivalent of 14 months of salary per employee each year. Labor laws do not differentiate between layoffs and firing. Employers must pay dismissed workers one month for each year of work with a cap of six months, except in cases of “for cause” firings. Laws prohibit private sector employers from firing workers for discriminatory or anti-union reasons. Dismissals often result in labor conflicts, even if dismissals are required to adjust employment to fluctuating market conditions. Unemployment insurance pays workers a percentage of their salary for up to six months. In the past, the government has extended the term of the unemployment insurance for select groups of laid-off workers.

Historically, Uruguay took pride in a high literacy rate and tradition of quality public education. However, Uruguay is experiencing a crisis in its public education system. Dropout rates at the high school level are very high, and Uruguayan students have performed poorly in the OECD’s PISA tests. These challenges may limit the number of qualified workers available over the mid- to long-term. In 2008, the government launched a special institute, National Employment and Training Institute (INEFOP), to bolster workforce development. There is a structural shortage of workers in the IT sector and other specialized technical industries as well.

12. OPIC and Other Investment Insurance Programs

OPIC programs are active in Uruguay, though few U.S. companies or projects request their services due to Uruguay’s stability and access to foreign currency. The GoU signed an investment insurance agreement with OPIC in December 1982.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

  Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2018 $59,630 2017 $56,157 e Indicadores/Paginas/Default.aspx

Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2017 $1,415 2017 $1,556 BCU estadisticas e indicadores.

Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2017 $82
Total inbound stock of FDI as % host GDP 2017 50% 2017 51.22% UNCTAD data available at


Table 3: Sources and Destination of FDI

Uruguay’s Central Bank reports that, excluding intra-firms’ loans, the U.S. was the fourth largest foreign investor in Uruguay 2013-2017. In 2017, the U.S. held the sixth largest stock of foreign direct investment, after Argentina, Spain, Switzerland, Panama, and Chile. U.S. investment is distributed among a wide array of sectors, including forestry, tourism and hotels, services (e.g., call centers or back office), and telecommunications.

Direct Investment From/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $19,955 100% N/A N/A N/A
Argentina $5,126 29% N/A N/A N/A
Spain $5,043 28% N/A N/A N/A
Switzerland $3,099 17% N/A N/A N/A
Panama $3,033 17% N/A N/A N/A
Chile $1,634 9% N/A N/A N/A
“0” reflects amounts rounded to +/- USD 500,000.

Source: IMF Coordinated Direct Investment Survey

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries $10,211 100% All Countries $232 100% All Countries $10,131 100%
United States $5,578 55% Chile $136 59% United States $5,578 55%
Luxembourg $1,755 17% Brazil $51 22% Luxembourg $1,741 17%
Germany $1,577 16% Canada $24 10% Germany $1,577 16%
Ireland $677 7% Luxembourg $14 6% Ireland $677 7%
Japan $558 6% U.K. $7 3% Japan $558 6%

14. Contact for More Information

Ms. Salina Rico, Economic Unit
Lauro Muller 1776
Tel: (5982) 1770-2449