FOREIGN INVESTMENTS IN URUGUAY
Uruguay has traditionally been considered as a country with a friendly legal framework for foreign investments. Its stable political system, in which respect for the rule of law is the norm, and its strategic location are some of the factors that make Uruguay an attractive country for investors. In this regard, strong public policies have been implemented in order to maintain a favorable investment climate and to attract foreign investments into the country.
The main general rules regarding investment protection are in the Investment Law. This legal framework contains certain principles, which can be summarized as follows:
- Uruguayan Law provides no discrimination whatsoever with foreign investors vis a vis national investors;
- Foreign investments are admitted without any previous authorization or filing requirement, before any governmental agency;
- Foreign currency inflows and outflows are subject to no restrictions; Uruguayan Law guarantees the free remittance of capital and dividends abroad in freely convertible currency, as well as other investment-related funds;
- There are no restrictions or limitations regarding the percentage of equity that foreigners may own in local businesses;
- There are no restrictions or limitations to appoint foreigners as directors of Uruguayan companies, residents or not;
- There are no restrictions or limitations for foreign investors seeking to set up a local operation with respect to the kind of business entity they are allowed to use;
- Uruguayan Law provides total economic and exchange freedom;
- The Government promotes investment in general, and keeps a favorable policy towards foreign investment. The general regime is totally open and does not make any discrimination at all between local and foreign investors from tributary point of view. Foreign investor has the same incentives as local ones;
- The foreign investor can operate in the country, setting up an Uruguayan partnership company -which is the most frequently used in this country- in which the investor can have the 100% of the share capital. The investor can also operate through the setting up of a limited liability company or other kinds of personal companies integrated by foreign physical or juridical persons (legal status). In the same way, the foreign investor can choose to operate in the country through a foreign company, partnership, opening a branch in Uruguay.
- Uruguay has traditionally given security to the foreign investor, because of the effective currency of the rights and for economic stability. Besides, it is a member of investors protective international organizations, such as MIGA, International Center of Settlement of Differences Regarding Inversions, (the World Bank is the seat of this Center).
Dr. Jean Jacques Bragard
Managing Partner
BRAGARD
