Law 15,921 of December 17, 1987, Law 17,292 of January 25, 2001, and their Regulatory Decrees 454/88, 920/88, and 458/92, include the main provisions regarding Free Trade Zones.

The promotion and development of Free Trade Zones were declared of national interest by law, with the purpose of “promoting investments, expanding exports, increasing the use of national manpower, and encouraging international economic integration.”

Free Trade Zones are areas within the national territory, public or private, duly fenced and isolated, as determined by the Executive Power.

All kinds of services can be offered, and all kinds of industrial and commercial activities can be developed, at Free Trade Zones, including:

A) Marketing of goods (except for ordnance); warehousing, storage, fitting-out, selection, classification, division, assembling, dismantling, handling, or mixture of commodities or raw materials of foreign or national origin.

B) Setting up and operation of plants.

C) Provision of all kinds of services, not restricted by national regulations, both inside the Free Trade Zone and from it to third countries.

Likewise, Free Trade Zones users will be able to offer the following telephone or computer services from Free Trade Zones to the rest of the national territory, observing monopolies, states exclusive rights, and/or public concessions:

1. International Call Centres, except for those having the national territory as their only or main target.
2. E-mail addresses.
3. E-learning.
4. Issuance of electronic signature certificates.

D) Others that, in the opinion of the Executive Power, may turn out to be profitable for the domestic economy or the economic and social integration of the States.

The areas delimited as Free Trade Zones can be exploited by the State or by duly authorized private workers. State monopolies do not apply in free trade zones. There exists an equal treatment between nationals and foreigners.

The exploitation of a Free Trade Zone must be distinguished from the performance of activities as a user. The latter are the holders of the exemptions and benefits granted by this law, as explained below.
Exploitation merely consists in a transaction by which, in exchange of a price agreed upon with each user, a natural or legal person provides the necessary infrastructure for the setting up and operation of a Free Trade Zone.

Private companies authorized to exploit a Free Trade Zone are not covered by the exemptions and benefits granted to users by law. However, they can obtain – if applicable – the declaration of national interest through Industrial Promotion Law 14,178.
All natural or legal persons who acquire the right to develop activities in Free Trade Zones are considered users.

Users may be direct or indirect, depending on the source from which they obtained the right to do business in Free Trade Zones.
Those companies established in Free Trade Zones cannot develop any activity outside them.

In order to maintain the status of user, and be entitled to the exemptions, clearances, and benefits granted by law, a minimum of 75% of the staff hired by the companies shall have Uruguayan citizenship.
The authorization to become a user is obtained through the presentation of a capital project before the Free Trade Zones Management.

Free Trade Zones users, either direct or indirect, are free from all national taxes created or to be created, even from those that require specific exemption by law.

There are two exceptions:

a) The Industry and Commerce Income Tax (Impuesto a la Renta de Industria y Comercio) that charges dividends or profits credited or paid to natural or legal persons domiciled abroad, when already charged in the country where the holder is domiciled and there exists a tax credit in said country for the tax paid in Uruguay.

When the tax credit abovementioned cannot be used for having obtained a negative net taxable income, the income is considered exempt.
In all other cases, taxation on account of Income Tax is void.

b) Contributions to Social Security (but in the case of foreign staff working in a Free Trade Zone and refusing to benefit from the national social security system, contributions will not be mandatory.)

Goods and services of any nature can get in and out, free from all taxes or any other instrument with an equivalent effect, assessments, and surcharges, created or to be created, even those that require specific exemption by law.

Financial intermediation institutions authorized to perform activities within the Free Trade Zone are exempt from Assets Tax of Banking Institutions.

The State is liable for damages that may be caused to users if, during the term of the agreement, tax holiday, benefits, and rights granted by the Free Trade Zone Act are eliminated or suspended.

Within the Free Trade Zones, borrowing and securing of international credits is totally free; no authorization, tax payment, posting of deposits, etc. of any kind is required.

Goods deposited in Free Trade Zones can be allocated as real security of those financings through the issuance of warehouse receipts and the use of warrants.

Certificates of origin for products elaborated in the Free Trade Zones are issued in accordance with multilateral and bilateral rules by product and by convention in force.

Preferential treatments as regards tariffs granted by other countries to Uruguayan exports in relation to certain products and in limited volumes or values shall be preferably used by industries exporting said products already set up outside the Free Trade Zone.

As long as there are quotas not filled by industries set up outside the Free Trade Zone, those advantages could, in practice, be used by industries established in the Free Trade Zone.

Payment of import or export transactions within the Free Trade Zones is made in any currency, at free exchange rate.