Countries › Uruguay › Guide › 9. Trade and customs › Free zones in Uruguay: who can be a user, contract terms, staffing rules, tax exemption and what changed in 2026
Free zones in Uruguay: who can be a user, contract terms, staffing rules, tax exemption and what changed in 2026
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Last verified: 2026-10-27 · Status: Changing
Free zones are fenced areas, public or private, where authorised users carry out industrial, commercial or service activities exempt from all national taxes, present or future, under a contract approved by the Ministry of Economy's Dirección Nacional de Incentivo a la Inversión. Users must have an exclusive corporate purpose, cannot trade in the rest of Uruguay except as the law allows, must employ at least 75 percent Uruguayan citizens (50 percent for services) and sign contracts of up to 15 years for industry and 10 for commerce and services. Since 1 January 2026 the exemption no longer covers the domestic minimum top up tax, and goods moving from a free zone into Uruguay are imports for all purposes.
USD figures use UYU 40.214 per US dollar, the BCU quotation for DLS. USA BILLETE on 26 October 2026, and UI amounts use UYU 6.6792 per UI, the BCU Unidad Indexada value for 27 October 2026, both retrieved from the BCU quotations service on 27 October 2026; conversions are for orientation only.
Key facts
| Minimum share of Uruguayan citizens in free zone user staff | 75 % (50% for service users)Ley Nº 15.921 art. 18 (Ley Nº 20.446 art. 196), as of 2026-10-27 · in force |
|---|---|
| Maximum direct user contract term, industrial activities | 15 yearsLey Nº 15.921 art. 16, as of 2026-10-27 · in force |
| Maximum direct user contract term, commercial or service activities | 10 yearsLey Nº 15.921 art. 16, as of 2026-10-27 · in force |
| Maximum indirect user contract term | 5 yearsLey Nº 15.921 art. 16, as of 2026-10-27 · in force |
| Maximum fine on free zone users or developers | 10000000 UILey Nº 15.921 art. 42, as of 2026-10-27 · in force |
| Free zone users exempt from national taxes on authorised activities | Yes, except social security and domestic minimum top up tax Ley Nº 15.921 art. 19 and 20, as of 2026-10-27 · in force |
The rule
1. Free zones are areas of the national territory, publicly or privately owned, delimited and fenced to isolate them from the rest of the territory, designated by the Executive, in which industrial, commercial or service activities are carried out with the benefits of the law. Commercial activities include buying and selling goods with origin and destination abroad or in Uruguay and logistics (storage, sorting, assembly, mixing, hardware configuration, software installation and similar operations not amounting to industrial transformation). Services may be provided within the zone, to users of other zones and to third countries; to the rest of Uruguay they may be provided to IRAE taxpayers, and the law lists call centres not mainly aimed at Uruguay, email boxes, distance education and electronic signature certificates as services taxed as if provided from abroad.
Cost to do it: Users pay the zone developer a contractual price; the State charges developers for the authorisation (art. 10).
Example: A trading company buys UYU 4,021,400 of goods in Asia, stores them in a free zone and resells them to Paraguay without paying Uruguayan taxes on that activity. / US$100,000 of goods traded through the zone to third countries: no Uruguayan national taxes on the activity.Ley Nº 15.921 (Free Zones Law), Art. 1 BIS, art. 2, art. 2 BIS and art. 2 TER (as worded by Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
Cost to do it: Users pay the zone developer a contractual price; the State charges developers for the authorisation (art. 10).
Example: A trading company buys UYU 4,021,400 of goods in Asia, stores them in a free zone and resells them to Paraguay without paying Uruguayan taxes on that activity. / US$100,000 of goods traded through the zone to third countries: no Uruguayan national taxes on the activity.Ley Nº 15.921 (Free Zones Law), Art. 1 BIS, art. 2, art. 2 BIS and art. 2 TER (as worded by Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
2. Direct users contract with the zone developer (or the State); indirect users contract with a direct user. User contracts and their extensions have no legal existence unless authorised in advance and must include company information and a business plan. Authorised terms are up to 15 years for industrial activities and 10 years for commercial or service activities for direct users, and up to five years for indirect users, with no automatic extensions; longer terms are possible outside the Montevideo metropolitan area (40 km radius) or by reasoned resolution for exceptional investments. Extension requests must be filed at least 120 days before expiry and once 85 percent of the term has run; if there is no answer within 120 days of a complete request, the extension is deemed granted. Users file a sworn statement on compliance with the approved project every two years.
Cost to do it: Contract price with the developer; no State fee for user authorisation is set in the law.
Example: A services company signing as direct user can obtain up to 10 years and must request any extension between 85 percent of the term and 120 days before expiry. / Direct user terms: 15 years industry, 10 years commerce or services; indirect users 5 years.Ley Nº 15.921 (Free Zones Law), Art. 1 TER, art. 15, art. 16 and art. 16 TER (as worded or added by Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
Cost to do it: Contract price with the developer; no State fee for user authorisation is set in the law.
Example: A services company signing as direct user can obtain up to 10 years and must request any extension between 85 percent of the term and 120 days before expiry. / Direct user terms: 15 years industry, 10 years commerce or services; indirect users 5 years.Ley Nº 15.921 (Free Zones Law), Art. 1 TER, art. 15, art. 16 and art. 16 TER (as worded or added by Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
3. Companies installed as free zone users must have the exclusive purpose of carrying out the activities allowed by the law in Uruguay and cannot carry out industrial, commercial or service activities in the rest of the national territory, in particular selling, promoting, exhibiting or delivering goods destined to the rest of Uruguay or collecting on those sales. Limited exceptions, subject to prior authorisation, cover collection of overdue portfolios through third parties and, for zones with location disadvantages, one exhibition site per developer in Montevideo for events shorter than seven days, up to four a year. Users of zones outside the metropolitan area may run complementary administrative offices outside the zone, without sales. Retail trade inside the zones is prohibited, except supplies between users and developers and services for staff.
Cost to do it: Breaching the exclusivity rule exposes the user to the sanctions of art. 42.
Example: A free zone distributor cannot open a showroom in Montevideo to sell to Uruguayan retailers; local buyers must import the goods from the zone. / Sales into Uruguay go through a local importer that pays the import duties.Ley Nº 15.921 (Free Zones Law), Art. 14 and art. 37 (as worded by Ley Nº 18.996 and Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
Cost to do it: Breaching the exclusivity rule exposes the user to the sanctions of art. 42.
Example: A free zone distributor cannot open a showroom in Montevideo to sell to Uruguayan retailers; local buyers must import the goods from the zone. / Sales into Uruguay go through a local importer that pays the import duties.Ley Nº 15.921 (Free Zones Law), Art. 14 and art. 37 (as worded by Ley Nº 18.996 and Ley Nº 19.566), 1987-12-17 official text · verified 2026-10-27
4. Users must employ in their free zone activities at least 75 percent Uruguayan citizens, natural or legal, to keep user status and benefits; for users carrying out service activities the minimum is 50 percent for the term of the user contract. The percentages may be reduced temporarily with Executive authorisation for special characteristics, start up or expansion, or general interest, possibly with training plans; a request not answered within 60 days is deemed approved. Users may agree telework from employees' homes in Uruguay under Executive conditions, excluding production, distribution, logistics and substantive commercial staff.
Cost to do it: No fee; the cost is the staffing constraint.
Example: A shared services centre with 40 employees in a free zone needs at least 20 Uruguayan citizens; an assembly plant with 40 needs at least 30. / Same ratios regardless of salary levels: 50 percent for services, 75 percent otherwise.Ley Nº 15.921 (Free Zones Law), Art. 18 (as worded by Ley Nº 20.446 art. 196) and art. 14 TER (as worded by Ley Nº 20.212 art. 214), 2025-12-16 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 196, in force from 1 January 2026, made the 50 percent minimum for service users a direct rule; under the previous wording (Ley Nº 19.566 art. 14) the 50 percent applied only when the nature of the business required it.
Cost to do it: No fee; the cost is the staffing constraint.
Example: A shared services centre with 40 employees in a free zone needs at least 20 Uruguayan citizens; an assembly plant with 40 needs at least 30. / Same ratios regardless of salary levels: 50 percent for services, 75 percent otherwise.Ley Nº 15.921 (Free Zones Law), Art. 18 (as worded by Ley Nº 20.446 art. 196) and art. 14 TER (as worded by Ley Nº 20.212 art. 214), 2025-12-16 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 196, in force from 1 January 2026, made the 50 percent minimum for service users a direct rule; under the previous wording (Ley Nº 19.566 art. 14) the 50 percent applied only when the nature of the business required it.
5. Users are exempt from every national tax, present or future, including those that by law require a specific exemption, on the activities they carry out in the zone within the terms of their authorisation, and the State guarantees these exemptions for the life of the contract, under liability for damages. The exemption does not cover special social security contributions, legal contributions to non State social security bodies, or the Impuesto Mínimo Complementario Doméstico (domestic minimum top up tax). Foreign staff who state in writing that they do not wish to join the Uruguayan social security system are not required to contribute. Income from intellectual property and other intangibles is exempt only if it derives from research and development carried out in the zones, in proportion to qualifying costs increased by 30 percent over total costs.
Cost to do it: No national taxes on authorised activities; social security contributions still apply, and large groups in scope of the domestic minimum tax pay it.
Example: A free zone user earning UYU 4,021,400 of profit on authorised activities pays no IRAE on it, but still pays employer social security contributions on its payroll. / US$100,000 of profit on authorised activities: no corporate income tax; social security on payroll still due.Ley Nº 15.921 (Free Zones Law), Art. 19 (as worded by Ley Nº 19.566), art. 20 (paragraph one as worded by Ley Nº 20.446 art. 636) and art. 25, 1987-12-17 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 636, in force from 1 January 2026, added the Impuesto Mínimo Complementario Doméstico to the taxes not covered by the free zone exemption (see taxes/global-minimum-tax).
Cost to do it: No national taxes on authorised activities; social security contributions still apply, and large groups in scope of the domestic minimum tax pay it.
Example: A free zone user earning UYU 4,021,400 of profit on authorised activities pays no IRAE on it, but still pays employer social security contributions on its payroll. / US$100,000 of profit on authorised activities: no corporate income tax; social security on payroll still due.Ley Nº 15.921 (Free Zones Law), Art. 19 (as worded by Ley Nº 19.566), art. 20 (paragraph one as worded by Ley Nº 20.446 art. 636) and art. 25, 1987-12-17 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 636, in force from 1 January 2026, added the Impuesto Mínimo Complementario Doméstico to the taxes not covered by the free zone exemption (see taxes/global-minimum-tax).
6. Goods, services and raw materials of any origin entering free zones are exempt from all import taxes and charges with equivalent effect; goods from the rest of Uruguay enter under export rules. Goods and products may leave the zones at any time free of all taxes, but goods introduced from a free zone into the rest of Uruguay are imports for all purposes. Foreign goods bound for a free zone must go there immediately on arrival and may wait only in customs areas for the time set by regulation. Securities, local and foreign currency and precious metals move freely in and out. Users may issue warehouse certificates and warrants on stored goods, endorsed by the developer.
Cost to do it: No import taxes on entry into the zone; full import taxes when goods move into the rest of Uruguay.
Example: Goods worth UYU 4,021,400 sold from the zone to a Montevideo buyer are imported by the buyer, who pays tariff, the UYU 201,070 consular fee and import VAT. / US$100,000 sold into Uruguay from a free zone: taxed like any US$100,000 import.Ley Nº 15.921 (Free Zones Law) and Customs Code art. 160, Ley 15.921 art. 21, art. 22, art. 36, art. 37 and art. 38, 1987-12-17 official text · verified 2026-10-27
Cost to do it: No import taxes on entry into the zone; full import taxes when goods move into the rest of Uruguay.
Example: Goods worth UYU 4,021,400 sold from the zone to a Montevideo buyer are imported by the buyer, who pays tariff, the UYU 201,070 consular fee and import VAT. / US$100,000 sold into Uruguay from a free zone: taxed like any US$100,000 import.Ley Nº 15.921 (Free Zones Law) and Customs Code art. 160, Ley 15.921 art. 21, art. 22, art. 36, art. 37 and art. 38, 1987-12-17 official text · verified 2026-10-27
7. Developers that breach their authorisation may be fined up to UI 10,000,000, besides revocation. Users that breach the law, its regulations or their contracts may be sanctioned by the Executive with a fine of up to UI 10,000,000, a ban on moving goods in or out or operating as user for a set time, or loss of the law's benefits, graded under Código Tributario art. 100. Users that fail to file the biennial sworn statement can be banned from operating while the breach lasts. Since 1 January 2026 the functions of the former Dirección Nacional de Zonas Francas and the Área Zonas Francas are exercised by the Ministry of Economy's Dirección Nacional de Incentivo a la Inversión.
Cost to do it: Fines up to UI 10,000,000 (about UYU 66,792,000, US$1,660,914).
Example: A user selling into Uruguay outside the law risks a fine of up to UYU 66,792,000 and loss of its free zone benefits. / Maximum fine about US$1,660,914.Ley Nº 15.921 (Free Zones Law); Ley Nº 20.446 art. 188, Ley 15.921 art. 16 TER and art. 42 (as worded by Ley Nº 19.566); Ley 20.446 art. 188, 2017-12-08 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 188 renamed the Dirección Nacional de Zonas Francas as Dirección Nacional de Incentivo a la Inversión, and references to the Área Zonas Francas are now read as references to it.
Cost to do it: Fines up to UI 10,000,000 (about UYU 66,792,000, US$1,660,914).
Example: A user selling into Uruguay outside the law risks a fine of up to UYU 66,792,000 and loss of its free zone benefits. / Maximum fine about US$1,660,914.Ley Nº 15.921 (Free Zones Law); Ley Nº 20.446 art. 188, Ley 15.921 art. 16 TER and art. 42 (as worded by Ley Nº 19.566); Ley 20.446 art. 188, 2017-12-08 official text · verified 2026-10-27 · changed: Ley Nº 20.446 art. 188 renamed the Dirección Nacional de Zonas Francas as Dirección Nacional de Incentivo a la Inversión, and references to the Área Zonas Francas are now read as references to it.
| Item | Rule | Article |
|---|---|---|
| Corporate purpose | Exclusive to free zone activities | Art. 14 |
| Sales into Uruguay | Only through import by the buyer; no local sales activity | Art. 14 and 22 |
| Staff | 75% Uruguayan citizens, 50% for services | Art. 18 |
| Contract term | 15 years industry, 10 commerce or services, 5 indirect | Art. 16 |
| Extension request | After 85% of term and at least 120 days before expiry | Art. 16 |
| Compliance filing | Sworn statement every two years | Art. 16 TER |
| Taxes | All national taxes exempt except social security and IMCD | Art. 19 and 20 |
| Retail inside zone | Prohibited, with listed exceptions | Art. 37 |
| Penalties | Up to UI 10,000,000, bans, loss of benefits | Art. 42 |
Free zone user checklist. Source: Ley Nº 15.921 as amended by Ley Nº 19.566, 19.996, 20.212 and 20.446.
Worked example
- A regional distribution company signs a 10 year direct user contract in a Montevideo area free zone, imports US$100,000 (UYU 4,021,400) of goods into the zone without import taxes and re exports most of them to Argentina and Paraguay without Uruguayan taxes on that activity.
- A Montevideo retailer that buys part of the stock imports it from the zone and pays the tariff, the consular fee (UYU 201,070 on the full UYU 4,021,400 if it bought everything) and import VAT; the free zone user itself cannot sell, promote or deliver in Uruguay.
- With 20 employees in logistics, at least 15 must be Uruguayan citizens; if its activity were services only, at least 10.
Step by step
- Pick a public or private zone and negotiate the user contract (direct with the developer, or indirect with a direct user).
- Incorporate a company whose sole purpose is the free zone activity; free zone sociedades anónimas have a special registration route (art. 17).
- Prepare the business plan and investment project; file for authorisation of the user contract with the Dirección Nacional de Incentivo a la Inversión before operating, since unapproved contracts have no legal existence.
- Hire under the 75 or 50 percent citizen ratio, or request a temporary reduction (deemed approved after 60 days of silence).
- File the biennial sworn statement and calendar the extension window (from 85 percent of the term and no later than 120 days before expiry).
Common traps
- The exemption covers only the activities in the approved business plan; anything outside it is taxed and can cost the user its status.
- Since 2026 large multinational groups do not escape the domestic minimum top up tax by operating from a free zone.
- Selling, promoting or collecting on sales to Uruguayan customers from outside the zone breaches the exclusivity rule.
- Goods from the zone into Uruguay pay full import taxes; there is no partial credit for the time spent in the zone.
- Extensions cannot be automatic and must be filed in a narrow window; missing it can end the user's status at expiry.
- Staff ratios count citizens, natural or legal, not residents; foreign residents do not count toward the minimum.
Sources
- IMPO, Ley Nº 15.921 (Free Zones Law), consolidated text
- IMPO, Ley Nº 19.566 original art. 14 (previous staffing rule)
- IMPO, Ley Nº 20.446 art. 196 (staffing rule)
- IMPO, Ley Nº 20.446 art. 636 (domestic minimum tax not exempt)
- IMPO, Ley Nº 20.446 art. 188 (Dirección Nacional de Incentivo a la Inversión)
- IMPO, Ley Nº 20.446 art. 3 (in force 1 January 2026)
- Banco Central del Uruguay, quotations service (USD and UI)
Related pages
- trade/trade-and-customs-overview
- trade/free-ports-transit-and-logistics
- trade/temporary-admission-drawback-and-customs-warehouses
- taxes/tax-incentives
- taxes/global-minimum-tax
- investing/foreign-investment-regime
- labor/employing-people
- https://theargentinethread.com/guide/
- /country/uruguay/
- /calendar/
- Live dashboard
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