URUGUAY InvestoR GUIde IntRodUctIon This guide has been prepared to assist all individuals and companies interested in doing busi- ness in Uruguay. Although the guide does not expand on all the aspects considered thoroughly, it intends to in- clude the most relevant aspects and provide answers to the main questions that may arise. For each particular situation, it will be necessary to complete the information of this Guide con- sulting laws, regulations and resolutions adopted in the country and obtain further specialized professional advice. The material included in this Guide is updated to July 31, 2012 and is based on information and rules in force to that date. InvestoR GUIde Index Chapter 1 - Country Features............................................................................................... 11 1. Geography and climate............................................................................................... 12 2. Population and language............................................................................................ 12 3. Political system and goverrment................................................................................. 12 4. Legal system............................................................................................................... 13 5. Living in Uruguay........................................................................................................ 13 6. Information for the investors....................................................................................... 14 Chapter 2 – Business Environment..................................................................................... 16 1. Economic and institutional framework....................................................................... 16 1.1 Economic performance and structure............................................................ 17 1.2 Economic policy............................................................................................. 20 1.3 Trade policy.................................................................................................... 20 1.4 Trade agreements......................................................................................... 21 1.5 State role in business.................................................................................... 22 1.6 Clear rules..................................................................................................... 23 1.7 Goverment attitude towards foreign investment............................................ 24 2. Supporting infrastructure............................................................................................ 25 2.1 Transportation system................................................................................... 25 2.2 Telecommunications...................................................................................... 27 2.3 Power............................................................................................................. 28 2.4 Drinking water and sanitation........................................................................ 29 3. Financial system......................................................................................................... 30 3.1 Banking system............................................................................................. 30 3.2 Central bank.................................................................................................. 31 3.3 Stock market.................................................................................................. 31 3.4 Insurance....................................................................................................... 32 3.5 International financial center.......................................................................... 32 3.6 Financing of companies................................................................................. 32 4. Intellectual rights, trademarks and patents................................................................. 33 Chapter 3 – Investment and foreign trade promotion system........................................... 35 1. General investment regime......................................................................................... 36 1.1 Investment promotion law.............................................................................. 38 1.2 General and automatic incentives................................................................. 39 1.3 Industry-specific regimes............................................................................... 39 1.4 Incentives to immigration............................................................................... 42 1.5 Free Trade Zones.......................................................................................... 42 1.6 Public-Private Partnerships.......................................................................... 43 2. Foreign trade.............................................................................................................. 46 2.1 Imports........................................................................................................... 46 4 InvestoR GUIde Index 2.2 Exports.......................................................................................................... 47 Chapter 4 – Business types................................................................................................. 49 1. Corporation................................................................................................................ 50 2. Limited Liability Company.......................................................................................... 52 3. Other business types................................................................................................. 52 3.1 Partnership................................................................................................... 52 3.2 Limited Partnership....................................................................................... 52 3.3 Joint Stock Company.................................................................................... 52 3.4 Labor and Capital Partnership...................................................................... 52 3.5 De Facto Partnership................................................................................... 52 4. Cooperative............................................................................................................... 54 5. Single-member Company.......................................................................................... 55 6. Consortia and Economic Interest Groups.................................................................. 55 7. Foreign companies’ branches.................................................................................... 57 8. Special activities........................................................................................................ 58 8.1 Financial activities........................................................................................ 58 8.2 Other activities.............................................................................................. 59 Chapter 5 – Accounting and auditing standars................................................................. 60 Chapter 6 – Tax aspects...................................................................................................... 63 1. Uruguayan tax system............................................................................................... 63 1.1 Legal framework........................................................................................... 64 1.2 Main taxes.................................................................................................... 64 1.3 International aspects.................................................................................... 66 1.4 Tax managment............................................................................................ 66 2. Taxation of companies............................................................................................... 68 2.1 Corporate Income Tax.................................................................................. 68 2.2 Wealth Tax.................................................................................................... 76 3. Taxation of natural persons........................................................................................ 77 3.1 Personal Income Tax.................................................................................... 77 3.2 Personal Wealth Tax..................................................................................... 81 4. Non-resindents taxation............................................................................................. 83 5. Value Added Tax........................................................................................................ 85 6. Other taxes................................................................................................................ 87 6.1 Excise Tax..................................................................................................... 87 6.2 Corporation Control Tax................................................................................ 87 6.3 Insurance Companies Income Tax............................................................... 88 6.4 Agriculture-Livestock Goods Sales Tax.......................................................