The Executive Branch of Uruguay approved the regulatory decree of Law No. 19566 of December 2017, which modernizes the free trade zone regime, according to the announcement made by the Undersecretary of Economy and Finance, Pablo Ferreri. The initiative will enable the creation of more activity hubs in the interior and adheres to international standards.
"These changes have the main objectives of modernizing the regime, promoting and strengthening the establishment of substantive activities in Uruguay and adhering to international standards regarding fiscal transparency.", explained Ferreri, in a press conference, after the Council of Ministers this Monday (24.9.2018).
The official stressed that “free zone contracts that were granted without a time limit will now have a specific time limit, which can be extended depending on compliance with the business plans presented at the time.”
Thematic free zones
He said that the law allows for new types of thematic zones outside the metropolitan area. He exemplified this by mentioning that it will be possible to generate audiovisual or entertainment centres.
He added that, as of the aforementioned modification, "each new user who wants to operate must submit a business plan to the Free Trade Zones Directorate which establishes what type of activity it generates and what added value it leaves for the country. (It must) demonstrate that it has a real activity to develop.”
Another point involves the possibility of carrying out auxiliary activities in Montevideo, in the free trade zones located outside the metropolitan area. He reviewed that companies must inform the General Tax Directorate (DGI) to carry out these tasks and include more workers in the area where they are installed than in the capital of the country. “The aim is to promote and preserve sources of employment in the interior,” he emphasized.
He stated that "Triangulation of services is also prohibited. "that do not have substance in the free zone. Therefore, intellectual property rights, which can be invoiced from the free zone to the world, will have to be developed within it. They will no longer be able to receive services performed abroad and simply re-invoice them without generating added value in the country," he specified.
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