News

Uruguay - A Third Pulp Mill on the Road

On November 7, 2017 UPM and the Uruguayan Government have sealed a preliminary letter of intent for the construction of a pulp mill in Uruguay, to be named “UPM 2” (“the PLOI”). Under the PLOI, UPM would agree to invest USD 4 billion to build a new pulp mill plant in the country. Uruguay would undertake to: (i) renovate the railroad connecting the plant with the export port (estimated investment: USD 1 b); (ii) execute a collective labor tripartite agreement with Uruguayan relevant unions; (iii) recognize the free trade zone status for the plant, with a 30-year broad tax exemption; (iv) authorize UPM to build a biomass power plant, and (v) acquire from UPM the energy excess in the sum of USD 70 million per year. Should the final agreement be executed and implemented as expected by Uruguay’s Administration, the project is scheduled to generate approximately 8,000 working positions during construction peak. The Uruguayan Government has already called for an international bid to award the contract for the construction and renovation of the above railroads.

read more-

E - Commerce Taxation - New Rules

As per recently enacted legislation, Netflix, Spotify and any other companies which operate apps for downloading movies, TV series and songs, shall pay taxes in Uruguay as from 1 January 2018. Global companies will be required to pay (i) Value Added Tax (VAT) at the rate of 22%, and (ii) Non-Residents Income Tax (Impuesto a las Rentas de los No Residentes -- IRNR), at the rate of 12%. Such taxes shall be paid as long as the end-user is located in Uruguay. While the recently enacted legislation is yet to be implemented by administrative regulations, it is reasonable to assume that the above taxes would be withheld by the acting credit cards systems. Other digital companies will be also required to pay VAT and Non-Residents Income Tax, where they intermediate in the provision of services (this is the case of Uber and Airbnb). Such digital companies will pay Non-Residents Income Tax at the rate of 6%, as long as they do not maintain a permanent establishment in Uruguay.

read more-

Uruguay - International Public Tender- Oil Exploration

Uruguayan´s Administration has just launched a promotional road-show to announce the beginning of a new phase in offshore oil exploration. The round is named Ronda Uruguay III and is scheduled to start with two preliminary events followed by an international public bid for the exploration and exploitation of oil in the Uruguayan maritime platform. Potential bidders are supposed to get access to a data room which would include the results of the sysmic studies conducted up to now - which involved an investment of more than USD 500 million, according to public sources -. The Ronda Uruguay III is scheduled to take place in London on 20 October 2017. The participation is open to the public prior registration. The international public bid to be called would offer the exploration of 17 offshore areas. Ronda Uruguay III has been preceded by two prior rounds under which exploration rights were granted to Petrobras, YPF y GALP, BP, BG, Total and Tullow Oil.

read more-

Uruguay - Ultimate Beneficial Owners - Mandatory Identification

Recently enacted regulations have established a comprehensive obligation of reporting to the Central Bank of Uruguay the ultimate beneficial owners of the wide spectrum of entities acting in Uruguay (“the Obligation”). As a general rule, the Obligation applies to: (i) all Uruguayan entities; and (ii) foreign entities which maintain in Uruguay a permanent establishment or assets in Uruguay in excess of approximately USD 320,000. Publicly traded companies and other regulated companies, are excluded from the Obligation. Ultimate beneficial owners are deemed to be those individuals who, directly or indirectly: (i) hold at least 15% of the voting rights; and/or (ii) by any other means exercise the final control over the entity they own. Relevant reporting dates: • New entities: 30 days as from incorporation date; • Pre-existing entities whose capital is expressed in bearer shares: 29 September 2017; • Other pre-existing entities: 29 June 2018.

read more-

Transfer of Domicile to Uruguay: The Revival of Uruguayan Companies

Once again, Uruguayan-based companies have become a valid option as a vehicle to establish a platform for offshore business. Several reasons explain the recent trend: the substance of Uruguayan companies with their mandatory book-keeping and the many public controls they are subject to; the heavy bureaucracy and paperwork behind a Uruguayan Sociedad Anónima; the full alignment of Uruguay´s tax system with the OECD standards (including an ample network of double taxation and exchange of information tax treaties –Uruguay is a member of the OECD Fiscal Affairs Committee); and Uruguay´s strict adherence to the territoriality tax principle under which foreign-sourced corporate income remains untaxed. In that context, an Executive Branch Decree dated 3 April 2017, has facilitated the re-domiciliation of foreign companies to Uruguay. The Decree has substantially abbreviated the procedures: re-domiciliation proceedings will be completed within a maximum of six months. The re-domiciliation application (to qualify for the abridged procedure) must be filed by 30 June 2017. ______________________ The above communication has been prepared just for information purposes. It cannot be construed as legal advice provided by Bergstein Abogados. Should you have any further questions, please feel free to contact Vanessa Corvini (vcorvini@bergsteinlaw.com) and/or Analía Fernández (afernandez@bergstienlaw.com).

read more-

Load more

Subscribe and Receive all Our News