URUGUAY: INVESTMENT PROMOTIONAL REGIME UPDATE.
🚨 Uruguay | Investment Promotion Regime Update
Uruguay has issued Decree No. 329/2025, introducing a substantial redesign of its Investment Promotion Regime under Law 16,906, aimed at accelerating growth while making incentives more targeted, measurable, and impact-driven.
Key Highlights:
🔹 Strategic refocus: Clean Technologies are replaced by Environmental Sustainability, and R&D now includes Technological Adaptation (I+).
🔹 Eligible Investments Changes
-Minimum unit value for movable assets increased from UI 500 to UI 1,500.
-Inclusion of genetic improvement investments (livestock breeders, embryos, semen).
-Inclusion of biological assets and certified varietal replacement in agriculture.
-Electric vehicles admitted for leasing and tourism services (subject to conditions).
-Eligible assets must be directly linked, essential, and proportionate to the approved project; oversized or unrelated assets are expressly excluded.
🔹 Investment Computation Period
-Eligible investments may be computed for up to 5 fiscal years (previously 10).-
-Investments made up to 6 months before filing may be included (capped at 20%).
-Large-scale projects exceeding UI 180 million (~USD 29.5m) may request an extended execution period of up to 10 years.
🔹 Tax Benefits
Corporate Income Tax (IRAE)
-Exemption calculated as a percentage of eligible investment, based on the indicator matrix.
-Annual exemption capped at 90% of the IRAE payable.
Net Wealth Tax (IP)
-Exemption on eligible movable assets for their useful life
-Real estate works are exempt for 8 years (Montevideo) or 10 years (the rest of the country)
Value Added Tax (VAT): Refund on local purchases of goods and services linked to promoted projects
Import Duties and Value Added Tax (VAT) on Imports
-Full exemption for non-competitive capital goods
Enhanced Incentives for Micro, Small, and Medium Entities (SMEs)
-Micro and Small Enterprises:
-An additional 15 percentage points IRAE exemption.
-2 extra years to use the benefit.
-Medium-sized Enterprises (up to 50 employees):
Incentives for Large Investments
-100% IRAE exemption on eligible investment for:
-Projects > UI 180 million, filed by December 31st, 2027, executed by December 31st, 2029.
-Projects > UI 300 million, filed by December 31st, 2028, executed by December 31st, 2031.
-Employment creation and technological adaptation (I+) will be prioritized when determining eligibility.
Industrial and Technology Parks
-Increased IRAE benefits (up to +15%) for qualifying users.
-Additional payroll tax credits linked to job creation within parks.
-Prorated benefits when investments occur both inside and outside the park.
🔹 Compliance, Monitoring, and Penalties
-Annual reporting on investment execution and indicator compliance is mandatory.
-Benefits may be reclaimed in cases of partial or total non-compliance.
-A tolerance margin is reduced from 20% to 10% on final indicator scores.
-Assets benefiting from tax exemptions must be maintained for their useful life (or 10 years).
🔹 Validity and Transitional Regime
This updated regime shall take effect on February 1st, 2026.
During a transitional period until April 30th, 2026, taxpayers may opt to apply the prior regime. Further, investment projects filed between August 1st, 2025, and January 31st, 2026, may opt into the new regime while preserving their original filing date.
📌 Uruguay is not just expanding incentives — it is refining them. The new framework represents a material tightening and strategic refocusing of Uruguay’s investment incentives, placing stronger emphasis on employment, technological upgrading, sustainability, and large-scale projects, while reducing execution timelines and increasing compliance rigor.
👉 Careful project structuring and early planning will be critical to fully capture the available tax benefits under the new framework.
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https://www.gub.uy/ministerio-economia-finanzas/politicas-y-gestion/regimen-decreto-329025