TerraLex Guide to Foreign Direct Investment - NEW

Uruguay does not have a foreign investment control regime. The system is built on the principle of unrestricted freedom of investment, with no distinction between domestic and foreign investors. Except for activities falling under established state monopolies, there is no policy preference for limiting ownership of strategic sectors to Uruguayan capital.

Key governing laws are:

• Law 16906 (1998): This law provides Uruguay’s general investment regime. It declares the promotion and protection of national and foreign investment to be of national interest, guarantees equal treatment of foreign and domestic investors, and ensures the free transfer of capital and profits. It also allows activities, projects, or companies to be designated as of “national interest” when they pursue objectives such as expanding and diversifying processed-goods exports, developing new industries, or upgrading existing ones.

• Laws 12670 (1959) and 14500 (1976): These laws guarantee the free movement of foreign currency into and out of Uruguay and allow contracts and investments to be denominated in foreign currencies.

Uruguay has no foreign exchange controls, and contracts may be freely structured in any currency. Bilateral and multilateral investment treaties further reinforce the rule of free investment, subject only to limited exceptions established in each treaty.

Uruguay’s investment framework operates within a broader policy environment characterized by macroeconomic stability, institutional strength, and a long-standing commitment to maintaining an open, predictable, and non-discriminatory investment climate. Successive governments have upheld pro-investment policies, resulting in one of the region’s longest periods of sustained growth and a resilient economy.

The country also maintains a comprehensive network of investment protection agreements and double-taxation treaties, and a well-developed investment promotion regime administered by the Investment Implementation Committee (“COMAP”), which grants substantial tax incentives to eligible projects. Uruguay XXI, the national investment and export agency, provides advisory services to investors and acts as a bridge between the public and private sectors.

Since Uruguay has no FDI screening mechanism, no authority is tasked with reviewing foreign investments or determining whether a filing is required.

The only relevant authority in investment promotion is COMAP, which evaluates applications for tax incentives under Law 16906. COMAP may be approached formally for incentive matters, but not for FDI clearance, as no screening exists. COMAP also serves as a central coordination body for investment promotion programs.

Uruguay has no FDI screening mechanism. Therefore, no event or transaction triggers an FDI review based on investor nationality, sector, or investment size. The absence of a screening system means that acquisitions, greenfield projects, and other investments do not require foreign-investment approval.

That said, certain sector-specific regulatory authorizations may still apply, but these are activity-based, not foreign-investment controls. For example:

• Merger control may apply under Law 18159 when a transaction qualifies as an economic concentration, but this regime treats foreign and domestic investors identically.

• Environmental permits are required for defined high-impact projects (namely, large power plants, major terminals, or extensive urban developments).

• Entities that carry out what is called ‘financial intermediation’ (such as banks, offshore banks, or financial houses) must obtain a license from the Central Bank and an authorization from the Executive Branch, regardless of the origin of capital.

• Mineral deposits in Uruguay are the property of the State, and only the Executive Branch may confer rights to them. The Mining Code governs easements and permits for prospecting, exploration, and exploitation, and allows both national and foreign parties to hold these rights.

• Rural land ownership is subject to transparency requirements and restrictions related to bearer shares or foreign sovereign ownership, but these rules do not constitute FDI screening.

• State monopolies (for example, OSE for water supply, ANCAP for crude oil refining, and ANTEL for local fixed-line telecom) are closed to all private investors, whether local or foreign.

Because these regimes regulate the sector, not the foreign status of the investor, none of them amount to FDI review, and no FDI trigger exists in Uruguay.

Not applicable. Uruguay does not conduct FDI control.

Uruguay’s FDI regime does not require either pre-closing or post-closing filings, as there is no foreign investment screening mechanism in place. Foreign investors may proceed with acquisitions or new investments without notifying or obtaining authorization from an FDI authority.

Pre-closing approval may be required solely in regulated sectors (such as financial services, mining, or activities requiring environmental authorization), and such obligations apply irrespective of whether the investor is foreign or domestic.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable. There is no FDI screening authority with ex officio powers.

Not applicable. There is no FDI decision-making process.

Not applicable.

No appeal mechanism exists because no FDI screening decision is issued.

None. Timeframes only exist in sector-specific regulatory approvals (e.g., Central Bank -banks- licensing), which apply equally to foreign and domestic investors.

None. There is no FDI review procedure.

Uruguay does not impose general foreign-investment controls, but several sector-specific regulatory regimes may affect both domestic and foreign investors. These regimes are activity-based, not nationality-based.

Key controls include:

1. State monopolies: Certain sectors are legally reserved for State-owned enterprises and therefore closed to private investment of any kind, including water and waterworks (OSE), crude oil refining and fuel import/export (ANCAP), local fixed-line telecommunications (ANTEL), railways, and national postal services.

2. Sectoral ownership or authorization requirements:

• Aviation: Majority Uruguayan ownership requirements apply to national air carriers, although foreign airlines are generally free to operate.

• Rural land: Agricultural land may only be owned by individuals or companies with registered shares; restrictions apply to companies controlled by foreign states or sovereign funds, subject to specific exceptions for productive projects.

• Port, transport, and customs-regulated activities: Some activities require confirmation of the “national component” from the relevant transport or customs authorities.

3. Regulated activities requiring prior authorization:

• Financial intermediation: Banks and other financial entities must obtain a license from the Central Bank and authorization from the Executive Branch.

• Environmental permits: Certain high-impact projects (for instance, large energy plants, major terminals, extensive real-estate developments) must obtain prior environmental authorization.

• Mining and hydrocarbons: Mineral deposits belong to the State, and rights to prospect, explore, or exploit them must be granted by the Executive Branch. Hydrocarbon activities involving “Class I minerals” are reserved to ANCAP (the state-owned oil company), directly or through concessions.

4. Incentive-based regimes:

Forestry: The forestry sector benefits from tax exemptions, reimbursements, soft credit lines, and customs exemptions under the Forestry Law.

Overall, these regimes shape how investments operate in regulated sectors but do not constitute FDI controls, and Uruguay applies equal treatment to national and foreign investors.