Changes to the Investment Promotion Regime in Uruguay

By Juan Martín Sonderegger, Associate Accounting Division, Pittaluga Abogados

As of February 1, 2026, a new decree introducing significant adjustments to the investment promotion regime under Law No. 16,906 has taken effect.

The modifications aim to update how investment projects are evaluated and to align fiscal incentives with current economic policy priorities. The main changes include:

Job Creation:

Greater priority is given to investments that create formal employment, with special emphasis on hiring young people, women, and groups facing greater barriers to entering the labor market.

Territorial Decentralization:

Projects located outside the capital, Montevideo now receive greater weighting to promote economic development across the country.

Technology and Productivity:

The regime now incentivizes investments that foster innovation, digitalization, automation, and productivity improvements with direct impacts on competitiveness.

Facilitating Access for Micro, Small, and Medium Enterprises (MiPymes):

New adjustments are intended to simplify access to the investment promotion regime for MiPymes, recognizing their key role in job creation and value generation.

The decree maintains central fiscal benefits, such as exemptions from the corporate income tax (IRAE), exemptions on import duties, and mechanisms for VAT recovery. It also establishes clear rules for both smaller-scale projects and large investments.

Importantly, the new decree coexists with the previous regime until April 30, 2026, allowing investors to assess which framework best suits their project based on timing and specific characteristics.

In a competitive regional context, these changes reinforce Uruguay’s position as an attractive, predictable destination for productive and sustainable investment.