The pandemic blocked several projects that were underway but also put Uruguay on the radar of some businessmen.
Uruguay's free zones are experiencing a somewhat contradictory situation. On the one hand, the arrival of the virus in the country caused several projects that were aimed to settle in those territories to stop. But at the same time, inquiries from foreign companies about a possible move increased.
It is clear that as long as the pandemic lasts and the borders are closed, it is almost impossible for the consultations to turn into concrete projects. However, the country's handling of the virus and the international repercussion that this had allowed to put Uruguay on the radar of some international companies.
"We have received many inquiries from different countries regarding the services and advantages offered by free zones”, Assured El Observador the member of the Chamber of Free Zones Daniel Carriquiry. However, he assured that the pandemic paralyzed "Lots of projects" that were already close to being realized.
In any case, Carriquiry was cautious and pointed out that for a company to make the decision to move, it can take up to two or three years from the first consultations. “There is a lot of consultation and that is very good. But they are very delicate issues "said the president of the Costa Oriental logistics center located in Zonamerica.
The economic and social situation that Argentina is experiencing also works in Uruguay's favor. The restrictions on companies in the neighboring country make them also begin to look to the other side of the De la Plata River. "These are expectations that we hope that once the pandemic ends, they will be realized"Carriqury added.
Within Latin America, Uruguay competes mainly with Colombia and Costa Rica to attract companies to establish themselves in free zones, according to sources in the sector. And in that sense, the country has some advantages: the proximity to Brazil (the main market in Latin America), the use of Portuguese and particularly English.
In the Test of English as a Foreign Language exam (TOEFL), one of the most widespread to measure the level of English of the adult population, Uruguay leads the ranking of Latin America. At a general level, other rankings place Uruguay among the best countries, but behind Argentina.
If to this is added that free zones have a zero rate of income tax, compared to the 20% they pay in Colombia (33% in non-free territory), Uruguay becomes an attractive destination. In any case, the Caribbean country has lower costs, a much higher volume of labor, and is closer to the United States, which can also be seen as an advantage for some issues. The large Colombian free zones are oriented, more than anything, to logistics and industry.
Zonamerica, which was born as a free trade zone in Uruguay in 1990, opened a headquarters in Colombia at the end of 2018 focused on the services sector.
Foreign workers in free zones
The general activity of the free zone must have as workers a minimum of 75% Uruguayan citizens (natural or legal). However, for service companies that minimum is less: 50%.
In a context of increased interest of foreigners to come to reside in Uruguay (due to the changes promoted in tax residence) the Andersen Tax study & Legal organized a talk to discuss benefits for foreign personnel in the free trade zone.
Employees must have immigration approval to work in the country. The simple start of the immigration process already allows the worker to register with the Social Security Bank. Foreign workers in free zones have the possibility of contributing to social security or not. Their contribution to Fonasa and the corresponding health coverage also depend on that, according to Cecilia Ricciardi, a partner in the study.
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You can continue to contribute towards your retirement in your home country. Not contributing also implies not having access to unemployment insurance or other subsidies that the BPS can offer.
The contributions that are made on the remuneration are divided into two main items: the Personal Income Tax and the contributions to social security. Foreign personnel who chose not to contribute to the BPS also have the option of being taxed by Non-Resident Income Tax. That is, a fixed rate of 12% on the entire salary (IRPF has rates that are applied by bands and range from 0% to 33% depending on income).
The activities of that person can be partially carried out abroad, they cannot provide services to companies in non-free territory and if they make that decision they must maintain it for at least three years.
SOURCE: https://www.elobservador.com.uy/nota/aumentan-consultas-de-empresas-extranjeras-para-instalarse-en-zonas-francas–20208516180