The Uruguayan Government has just improved measures to encourage industries to set up in the country, as well as to encourage the ones that are already installed to expand their investments.

In fact, if the company submits a project showing the investment to be made, as well as its consequences regarding new products or improvements in the ones currently produced, and giving preference to export activities, technological innovations and higher use of labor, then significant tax benefits can be obtain, as herein explained.

Taking into account those variables, the said project is assessed and gets a score that can be up to 90% of the income tax that the company shall pay in the next years, in a term of up to twenty years.

Through this procedure, each year an amount is deducted from the tax until the investment percentage of the said project is recovered, as per the established score.

With the former measures, the benefit allowed the deduction of the invested amount from the income subject to income tax in a term of up to five years; and the higher benefit was of 25% of the invested amount, i.e., the same percentage of the tax rate.
Under this regime, it is possible to recover the percentage scored by the project up to 90%.

It is still in force the exemption of every tax regarding the import of equipments for the development of the project, including the IVA (VAT) applicable to the importation, is still in force, as well as the exemption of the capital wealth tax in the same conditions as the former regime.

It is important to highlight that in some “departamentos” (counties) of the country, the local government grants facilities in order to obtain plots to set up the company.