Countries › Uruguay › Guide › 12. Sectors › Key sectors in Uruguay: electricity, hydrocarbons, mining, forestry and software, the rules that open each to private investors

Key sectors in Uruguay: electricity, hydrocarbons, mining, forestry and software, the rules that open each to private investors

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Last verified: 2026-10-27 · Status: Stable

Uruguay's main investable sectors run on short, stable laws: power generation is open to anyone and sold through a wholesale market with open grid access (Decreto Ley Nº 14.694 and Ley Nº 16.832), while transmission and distribution stay with the State utility UTE. Oil, gas and other energy minerals are reserved to the State and developed by ANCAP through contracts with private firms, which get tax exemption, free export and FX guarantees (Mining Code art. 71 to 73; Decreto Ley Nº 14.181); other minerals are held under permits and concessions paying a production canon of 5 to 10 percent, with special contracts and guarantees for large scale metallic mining (Ley Nº 19.126). Qualified forest plantations get twelve years of property tax relief (Ley Nº 15.939), and software income is exempt from IRAE under a cost ratio test or, for services, a 50 percent local cost test (T.O. 2023 Title 4 art. 66 S).

USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026; amounts in Unidades Indexadas (UI) use UYU 6.6792 per UI, the BCU quotation for 27 October 2026. Both were retrieved from the BCU quotations service on 27 October 2026. Conversions are for orientation only.

Key facts

Electricity generation open to private agents	Yes; generation is not a public service, sales to third parties through the national dispatch Decreto Ley Nº 14.694 art. 2 (Ley Nº 16.832 art. 1), as of 2026-10-27 · in force
Cap on national dispatch fee	2.5 % of supply, export or transit amountLey Nº 16.832 art. 10, as of 2026-10-27 · in force
Hydrocarbon exploration and exploitation	Reserved to the State through ANCAP, which may contract third parties Código de Minería art. 71 and 72; Decreto Ley Nº 14.181 art. 2, as of 2026-10-27 · in force
Taxes on ANCAP contractors' upstream activity	Exempt from all national and municipal taxes, except social security Decreto Ley Nº 14.181 art. 16, as of 2026-10-27 · in force
Production canon, metallic minerals	5 % of FOB or invoiced value (3 State, 2 landowner)Código de Minería art. 45 III, as of 2026-10-27 · in force
Production canon, non metallic Class III, first 5 years	5 %Código de Minería art. 45 III, as of 2026-10-27 · in force
Production canon, non metallic Class III, after 5 years	8 %Código de Minería art. 45 III, as of 2026-10-27 · in force
Production canon, Class IV construction materials	10 %Código de Minería art. 45 III, as of 2026-10-27 · in force
Exploration surface canon, year 3 onward	900 UI per hectare per yearCódigo de Minería art. 45 II, as of 2026-10-27 · in force
Exploitation concession maximum term	30 years, extendable by up to 15 year periodsCódigo de Minería art. 103, as of 2026-10-27 · in force
Exploitation concession maximum area	500 hectaresCódigo de Minería art. 103, as of 2026-10-27 · in force
Large scale mining investment or sales threshold	830000000 UILey Nº 19.126 art. 3, as of 2026-10-27 · in force
Large scale mining area threshold	400 hectaresLey Nº 19.126 art. 3, as of 2026-10-27 · in force
Large scale mining contract performance guarantee	5 % of programmed investmentLey Nº 19.126 art. 27, as of 2026-10-27 · in force
Additional canon with tax stability or arbitration clause	2 %Ley Nº 19.126 art. 43, as of 2026-10-27 · in force
Forestry tax benefit term	12 years from plantingLey Nº 15.939 art. 43, as of 2026-10-27 · in force
Software services IRAE exemption: local direct cost share	50 % (more than)T.O. 2023 Title 4 art. 66 S, as of 2026-10-27 · in force
Software IP exemption ratio uplift on qualifying costs	30 %T.O. 2023 Title 4 art. 66 S, as of 2026-10-27 · in force

The rule

1. Electricity generation is open to any agent and is not a public service: anyone may generate, including to sell all or part of the output to third parties on a regular basis, provided sales go through the national dispatch center (Despacho Nacional de Cargas) under the wholesale market rules. Transmission, transformation and distribution are a public service when supplied to third parties regularly and permanently, and that public service belongs to the State utility UTE, unless the Executive grants a concession to another company for a defined area. The wholesale market covers generators, transmitters, distributors and large consumers, with open, non discriminatory third party access to spare transmission and distribution capacity, and generators may sign freely negotiated supply contracts directly with distributors and large consumers. International interconnections and the related power purchase and exchange contracts need Executive approval.
Cost to do it: No licence fee is set in these articles for a generator. Wholesale market agents pay the Tasa del Despacho Nacional de Cargas on each transaction through the national grid, which may not exceed 2.5 percent of the supply, export or transit amount (Ley Nº 16.832 art. 10); the Executive sets the actual rate.
Example: A wind farm selling power worth UYU 40,214,000 in a year to a large consumer through the wholesale market bears a dispatch fee of at most UYU 1,005,350 (2.5 percent cap). / On US$1,000,000 of power sales the dispatch fee cannot exceed US$25,000.Decreto Ley Nº 14.694 (National Electricity Law), art. 2 as reworded by Ley Nº 16.832 art. 1; Ley Nº 16.832 (Energy Framework Law), Decreto Ley Nº 14.694 art. 2, 5 and 6; Ley Nº 16.832 art. 11 and 12, 1997-06-17 official text · verified 2026-10-27

2. Ley Nº 16.832 created an electricity regulator, and Ley Nº 17.598 of 13 December 2002 created the Unidad Reguladora de Servicios de Energía y Agua (URSEA) as a decentralized State service with technical autonomy, linked to the Executive through the Ministry of Industry, Energy and Mining. The regulator controls compliance with the energy framework law, sets safety and quality rules and metering and billing procedures, and advises the Executive on concessions, permits and authorizations in the sector and on the tariffs charged by public service suppliers. The wholesale market is run by ADME (Administración del Mercado Eléctrico), a non state public entity whose five member board includes the Executive, UTE, the Uruguayan delegation to the Salto Grande binational commission and two members for the other market agents. Disputes among market agents go to an arbitral tribunal formed under the regulator's rules.
Cost to do it: ADME's budget is funded by the dispatch fee capped at 2.5 percent of each transaction (art. 10); no separate registration fee was verified.
Example: A private generator joining the market becomes an ADME agent, accepts the dispatch rules and, in a dispute with another agent, goes to the arbitral tribunal under art. 3 numeral 5 rather than straight to court. / The same applies to a project of any size, for example a US$100,000,000 solar plant.Ley Nº 16.832 (Energy Framework Law); Ley Nº 17.598 (URSEA), Ley Nº 16.832 art. 2, 3, 4 and 5; Ley Nº 17.598 art. 1 and 3, 1997-06-17 official text · verified 2026-10-27

3. Oil, natural gas, coal, lignite, peat, oil shale and sands and other energy minerals (Class I) belong to the State, which alone may explore and exploit them, and ANCAP is the competent body for this activity. ANCAP may carry out any or all phases through contracts with domestic or foreign, public or private parties, including risk contracts. The Executive must authorize the contract terms and approve each contract as a condition of validity; contractors are selected by tender or competition, or directly with Executive authorization. Contractors may be paid in kind or in money, in any currency, may freely export the hydrocarbons that belong to them under the contract, and enjoy a State guarantee of free availability of their export earnings and convertibility of sales to the State. Exploration, exploitation, transport and sale of crude oil and natural gas obtained in Uruguay, by ANCAP and its contractors, are exempt from all national and municipal taxes and charges, present or future, except social security contributions and charges that are the cost of services.
Cost to do it: Terms are set per contract by ANCAP and approved by the Executive; no statutory royalty applies under these articles, and the art. 16 exemption removes national and municipal taxes on the covered activities.
Example: An offshore block holder under an ANCAP risk contract that sells its share of gas abroad pays no IRAE or other tax on that exploration and production activity, only the payments agreed in the contract and social security on local staff. / A contractor's export proceeds, for example US$50,000,000 of oil, may be kept and used freely in foreign currency under the art. 13 guarantee.Código de Minería (Decreto Ley Nº 15.242) as reworded by Ley Nº 18.813; Decreto Ley Nº 14.181 (Hydrocarbons Law), Código de Minería art. 7, 71, 72 and 73; Decreto Ley Nº 14.181 art. 2, 8, 10, 11, 13 and 16, 2011-09-23 official text · verified 2026-10-27 · changed: Ley Nº 18.813 of 23 September 2011 art. 12 rewrote Mining Code art. 71 to 76, which now govern ANCAP's Class I contracts.

4. All mineral deposits belong inalienably to the State. A mine is real property separate from the surface land, and rights are granted as titles: a prospecting permit (3 to 36 months, extendable by 36 more, up to 100,000 hectares per permit and 200,000 per holder), an exploration permit (1 to 3 years, extendable three times by one year, up to 1,000 hectares per permit and 2,000 per holder, with only the holder able to apply for the concession during its term) and an exploitation concession (up to 500 hectares and up to 30 years from taking possession, extendable by periods of up to 15 years while the mine is workable). Rights lapse, among other causes, when two consecutive years of surface or production canon are unpaid.
Cost to do it: Prospecting: UI 150 per 100 hectares or fraction, once, and UI 300 per 100 hectares on extension (art. 45 I). Exploration surface canon per hectare or fraction: UI 300 in year 1, UI 600 in year 2 and UI 900 in year 3 and later (art. 45 II).
Example: Prospecting 10,000 hectares costs UI 15,000, about UYU 100,188. Exploring 500 hectares costs UI 150,000 (UYU 1,001,880) in year 1, UI 300,000 (UYU 2,003,760) in year 2 and UI 450,000 (UYU 3,005,640) each year from year 3. / About US$2,491 for the prospecting permit; about US$24,914, US$49,827 and US$74,741 for the three exploration years.Código de Minería (Decreto Ley Nº 15.242 of 8 January 1982), as amended by Ley Nº 18.813, Art. 3, 4, 10, 11, 21, 87, 94, 95 and 103, 1982-01-08 official text · verified 2026-10-27 · changed: Ley Nº 18.813 of 23 September 2011 art. 18 rewrote art. 94 (exploration areas, terms and area release on extension).

5. An exploitation concession holder pays a production canon from taking possession. For metallic Class III minerals it is 5 percent of the FOB value of exports or of the invoiced domestic value (or of the international price average if the invoiced price is more than 10 percent below it): 3 percent to the State and 2 percent to the surface landowner. For non metallic Class III minerals it is 5 percent of market value in the first five years (2 percent State, 3 percent landowner) and 8 percent afterwards (3 percent State, 5 percent landowner); for Class IV construction materials it is 10 percent (5 and 5). The whole canon is paid to the State, which passes the landowner share on within 30 business days. The Executive may waive all or part of the State share for up to the first ten years of production. Mining charges are consideration for the right, not taxes.
Cost to do it: 5 percent of FOB value for metallic minerals; 5 then 8 percent for non metallic Class III; 10 percent for Class IV.
Example: A gold mine exporting UYU 402,140,000 FOB in a year pays a canon of UYU 20,107,000: UYU 12,064,200 to the State and UYU 8,042,800 for the landowner. / On US$10,000,000 of FOB exports the canon is US$500,000: US$300,000 State share and US$200,000 landowner share.Código de Minería (Decreto Ley Nº 15.242), art. 45 as reworded by Ley Nº 18.813 art. 5 and Ley Nº 19.924 art. 303, Art. 45 III, 47 and 48, 2011-09-23 official text · verified 2026-10-27 · changed: Ley Nº 18.813 of 23 September 2011 set the current canon structure and split; Ley Nº 19.924 of 18 December 2020 art. 303 let the Executive set the payment and filing periods.

6. A metallic mining project is large scale mining (Minería de Gran Porte) if, alone or with related projects of the same person or economic group, it occupies more than 400 hectares of direct intervention, or has a construction investment above UI 830,000,000, or yearly sales above UI 830,000,000. The concession then requires a contract with the Executive. Corporate holders must have nominative or book entry shares and identify their ultimate beneficial owners. Before signing, the holder posts a performance guarantee of 5 percent of programmed investment and a mine closure guarantee in UI covering partial closure costs plus 10 percent and a further 10 percent of total closure costs. These projects cannot use IRAE exemption promotion regimes, and if the contract includes a tax stability clause or the dispute settlement clause of art. 30 F, an additional 2 percent production canon applies on the same base.
Cost to do it: Performance guarantee of 5 percent of programmed investment; closure guarantee in UI set by the authorities; additional canon of 2 percent where stability or arbitration clauses are granted.
Example: The UI 830,000,000 threshold is about UYU 5,543,736,000. A project with UYU 20,107,000,000 of programmed investment posts a UYU 1,005,350,000 performance guarantee; with a stability clause and UYU 8,042,800,000 of yearly FOB sales it pays an extra UYU 160,856,000 a year on top of the 5 percent canon. / Threshold about US$137.9 million. On US$500 million of investment the guarantee is US$25 million; on US$200 million of yearly sales the additional canon is US$4 million.Ley Nº 19.126 (Large Scale Mining Law), Art. 3, 9, 20, 25, 27, 39 and 43, 2013-09-11 official text · verified 2026-10-27

7. Forest plantations declared protective, or plantations for yield in zones the Ministry of Livestock, Agriculture and Fisheries declares forestry priority, and the land they occupy, are exempt from national taxes on rural real estate and from the rural Contribución Inmobiliaria, and their value is excluded from the wealth tax (IP) base. The benefits run for twelve years from planting of each qualified forest, and end on the part of the forest that is destroyed, with surcharges if the owner destroyed it intentionally or through gross negligence. From 1 January 2026 the benefits do not cover the domestic minimum top up tax for large multinational groups.
Cost to do it: The benefit removes rural property taxes and the IP charge on qualified forest land; the planting and qualification work are private costs not set by the law.
Example: A forestry company whose qualified plantation land is worth UYU 40,214,000 (hypothetical) leaves that value out of its IP base, avoiding UYU 603,210 a year at the 1.5 percent company IP rate. / On US$1,000,000 of qualified forest land the IP saving is US$15,000 a year, for twelve years from planting.Ley Nº 15.939 (Forestry Law) of 28 December 1987, art. 43 as reworded by Ley Nº 20.446 art. 669, Art. 5, 39, 40 and 43, 2025-12-16 official text · verified 2026-10-27 · changed: Ley Nº 20.446 of 16 December 2025 art. 669 reworded art. 43 to exclude the Impuesto Mínimo Complementario Doméstico from the forestry benefits, in force from 1 January 2026.

8. IRAE exempts income from software, biotechnology and bioinformatics. Income from developing and exploiting registered software or other protected assets is exempt in the ratio of direct development costs incurred by the developer, with unrelated parties or with related Uruguayan residents, increased by 30 percent (capped at 100 percent), over total development costs including IP acquired or licensed and services from related non residents. Income from software development and related services is fully exempt if more than 50 percent of the direct costs of providing them in the year are incurred in Uruguay. Only entities listed in Title 4 art. 12 A (companies and similar, excluding de facto and civil partnerships) qualify, after filing a sworn statement with DGI and recording the exempt percentage or amount in the supporting documents.
Cost to do it: DGI sworn statement; no filing fee was found. Without the exemption the income is taxed at the 25 percent IRAE rate.
Example: A Uruguayan company earns net licence income of UYU 20,107,000 from registered software built with UYU 6,000,000 of own direct costs and UYU 4,000,000 of services from a related foreign company: ratio (6,000,000 x 1.3) / 10,000,000 = 78 percent, so UYU 15,683,460 is exempt and IRAE is UYU 1,105,885 instead of UYU 5,026,750. / On US$500,000 of net licence income, IRAE falls from US$125,000 to US$27,500. A software services firm with more than half its direct costs in Uruguay pays no IRAE on that service income.Texto Ordenado 2023 (Decreto Nº 101/024), Title 4 IRAE, art. 66 literal S (from Ley Nº 19.637 art. 2), Title 4 art. 66 literal S, 2018-07-13 official text · verified 2026-10-27 · changed: Ley Nº 19.637 of 13 July 2018 replaced the earlier full software exemption with the cost ratio (nexus) test from 1 January 2018; contributors under the old regime could keep it only until fiscal years closed by 30 June 2021.

Title or class	Charge	Rate	Split or note
Prospecting permit	Right of prospecting	UI 150 per 100 ha, once; UI 300 per 100 ha on extension	Paid on notice of grant
Exploration permit	Surface canon	UI 300, 600, then 900 per ha a year	Years 1, 2, 3 and later
Class III metallic	Production canon	5% of FOB or invoiced value	3% State, 2% landowner
Class III non metallic	Production canon	5% first 5 years, 8% after	2/3 then 3/5 State and landowner
Class IV construction materials	Production canon	10%	5% State, 5% landowner
Large scale metallic with stability or arbitration clause	Additional canon	2%	Same base as production canon

Mining charges under Código de Minería art. 45 (as reworded by Ley Nº 18.813) and Ley Nº 19.126 art. 43

Sector	Private role	State role	Main norm
Power generation	Free to generate and sell through the wholesale market	Executive sets market and dispatch rules	Decreto Ley Nº 14.694 art. 2; Ley Nº 16.832
Transmission and distribution	Only by concession granted by the Executive	UTE holds the public service	Decreto Ley Nº 14.694 art. 6
Oil and gas	Contractor to ANCAP, including risk contracts	State owns and ANCAP operates	Código de Minería art. 71 to 73; Decreto Ley Nº 14.181
Metallic and other minerals	Permits and concessions	State owns deposits, grants titles	Código de Minería; Ley Nº 19.126
Forestry	Plant and own forests	Ministry declares priority zones	Ley Nº 15.939
Software	Develop and export	DGI checks exemption ratio	T.O. 2023 Title 4 art. 66 S

Who may do what, by sector

Worked example

Exploration to production for a gold project of 500 hectares: the explorer pays a surface canon of UI 150,000 (about UYU 1,001,880, US$24,914) in year 1, rising to UI 450,000 (about UYU 3,005,640, US$74,741) a year from year 3 (Código de Minería art. 45 II). Once in production, if yearly FOB sales are UYU 402,140,000 (US$10,000,000), the 5 percent canon is UYU 20,107,000 (US$500,000), of which UYU 8,042,800 (US$200,000) goes to the landowner (art. 45 III).
Software exporter: a Montevideo company providing development services to its foreign parent, with more than 50 percent of direct costs in Uruguay, pays no IRAE on that service income; on US$500,000 of taxable income that is US$125,000 (UYU 5,026,750) a year of IRAE at 25 percent not paid (T.O. 2023 Title 4 art. 66 S).

Step by step

1. Identify the regime for the asset: open activity (power generation, forestry, software), State reserved activity contracted through ANCAP (hydrocarbons) or a mining title. The second table maps each to its law.
2. Set up the vehicle. For large scale mining the S.A. must have nominative or book entry shares and identify its ultimate beneficial owners (Ley Nº 19.126 art. 9); see the entities page for formation steps and costs.
3. Power: register as a wholesale market agent with ADME, sign supply contracts with UTE, distributors or large consumers, and obtain Executive approval for any international interconnection or cross border supply contract, for example with Argentina (Decreto Ley Nº 14.694 art. 5).
4. Mining: apply to the Dirección Nacional de Minería y Geología for a prospecting permit, then an exploration permit (up to 3 years plus three yearly extensions), then the exploitation concession; pay the canon on time, since two consecutive unpaid years end the right (Código de Minería art. 21, 87, 94 and 103).
5. Large scale metallic mining: negotiate the contract with the Executive, post the 5 percent performance guarantee and the closure guarantee before signing (Ley Nº 19.126 art. 20 and 27), and decide whether a stability clause is worth the 2 percent additional canon.
6. Forestry: confirm the land is in a forestry priority zone or that the forest is declared protective before planting, so that the twelve year benefits run (Ley Nº 15.939 art. 39 and 43).
7. Software: track direct development costs by asset from the start and file the yearly DGI sworn statement; record the exempt percentage in invoices and supporting documents (T.O. 2023 Title 4 art. 66 S).
8. Check whether a general COMAP investment promotion project also applies (see the investing page), except for large scale mining, which is barred from IRAE promotion regimes (Ley Nº 19.126 art. 39).

Common traps

Power sales to third parties outside the national dispatch and wholesale market rules are not covered by the generation freedom in Decreto Ley Nº 14.694 art. 2.
ANCAP contracts are void without Executive approval of both the bidding terms and the signed contract (Código de Minería art. 73).
Exploration permits must release 25 percent of the area at the second extension and 25 percent of the remainder at the third, and extensions need the approved work schedule to be underway (Código de Minería art. 94).
The production canon is computed on the international price average if the invoiced price of a metallic mineral is more than 10 percent below it, so related party sales at low prices do not cut the canon (art. 45 III 1B).
The landowner gets 2 to 5 percent of production value as of right; acquiring the surface land changes who receives it, not whether it is paid.
Large scale mining thresholds aggregate projects of the same economic group, so splitting a deposit among affiliates does not avoid Ley Nº 19.126 (art. 3 and 10).
Software IP income is only partly exempt when development is bought from related non resident companies, because those costs enter the denominator but not the numerator of the ratio.
Forestry benefits stop on any part of the forest destroyed, with surcharges if the destruction was intentional or grossly negligent (Ley Nº 15.939 art. 40), and since 2026 do not shield large groups from the domestic minimum top up tax.

Sources

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