Free Zones Law Nº 15.921

Law Nº 15.921

FREE ZONES LAW

The Senate and House of Representatives of the Oriental Republic of Uruguay, in General Assembly

DECREE:

CHAPTER I

General Provisions

Article 1. declared of national interest the promotion and development of free zones, with the objectives of promoting investment, expanding exports, increase the use of local labor and encourage international economic integration.

Article 2: Free zones are areas of the country public or private property, fenced and isolated efficiently, which will be determined by the Executive on the advice of the Honorary Advisory Committee of Free Zones, in order to develop in them with tax exemptions and other benefits detailed in this law, all types of industrial, commercial or service activities including:

A)

Marketing, warehousing, storage, packaging, sorting, classifying, splitting, assembling, dismantling, handling or mixture of foreign goods or raw materials or national origin.

B)

Installation and operation of factories.

C)

Financial services, computer repairs and maintenance, and other professionals that are required for the proper functioning of the installed activities and the sale of such services to third countries.

D)

Other deemed by the Executive Branch RESULTING beneficial to the national economy or the economic and social integration of the States.

The Executive Branch shall act to the effect that these activities do not impair the ability of exporting industries not already installed measures franca areas.

Article 3: declared of public utility property expropriation of private property for the establishment of free zones and its approaches.

Authorize the Executive to swap property of the fiscal domain of the State for property owned by the municipality or other public persons that are appropriate for the setting and access free zones or expanding existing ones.

Article 4: Only will dwell within EPZs people assigned to the supervision and maintenance of the necessary services to the activities developed and the officials determined in turn by the Executive.
CHAPTER II

Management, Control and Operation of Free Zones

Article 5: The administration, supervision and control of the free zones will be in charge of the Ministry of Finance through the Free Trade Zones to which the right may be granted devolution to the better performance of its functions.

Article 6. Believe an Honorary Advisory Commission of Free Zones consist of five members appointed as follows:

A)

One by the Executive, who shall preside.

B)

The remaining four will be elected by the members of the Board of the National Development Corporation representing the State, which, for these purposes, will constitute electing body and your decision should be taken with a minimum of four votes in favor. In conjunction with the appointment of these, equal number of alternates shall be appointed by the same procedures.

Article 7: The Honorary Advisory Committee shall be convened by the Ministry of Finance or the President and shall have the sole task of advising on the identification of areas of the country where the free zones shall state or private exploitation installed. The initiative rests solely with the Executive Branch, to whom applications, must mandatorily submit for consideration of such Committee deemed appropriate applications will be presented.

The Commission should rightly issued the peremptory period of thirty calendar days from the time the executive branch put the request for consideration. It shall be accompanied by the reasoned opinion of the Directorate of Free Zones.

The advice of the Commission shall have a minimum of four votes in favor. Failing that, if ignored, or if pronouncement contrary to the opinion of the Executive, the background should be submitted for consideration by the General Assembly or the Standing Committee where appropriate, which have a period of thirty days to be issued. After this deadline without comment, the Executive may authorize the request.

Article 8: Each defined as a free zone area can be exploited by the government or by duly authorized individuals.

For these purposes be understood to mean the farm operation whereby in exchange for an agreed price for each user, a natural or legal person providing the necessary and sufficient for the installation and operation of a free zone infrastructure.

Article 9: Private companies authorized to operate a free zone shall not be covered by the exemptions and benefits that the law grants users. Notwithstanding they can get if the statement correspondiere- Decree Law 14,178, of March 28, 1974, (Industrial Promotion) concerns.

Article 10 The application for leave to exploitation by private free zone shall be submitted to the Executive, accompanied by an investment project which adequately demonstrate the economic viability of the project and the benefits accruing to the country.

The authorization will be costly, either by paying the state a lump sum or by paying a periodic fee as agreed, subject to the provisions of Article 30 of this law.

Article 11 The companies that refers to Article 9 should make their exploitation in the terms specified in their authorization and their violation or non-compliance may be subject to a fine, which will graduate in accordance with the gravity of the infringement of up to N $ 50: 000,000 (fifty million new pesos) to be reset by the Index of Consumer Prices established by the Department of Statistics and Census, notwithstanding the withdrawal of approval when appropriate according the nature of the violation.

Article 12 In case of revocation of authorization or other situations in severity as determined by the Executive Branch may have through the Free Trade Zones adopting necessary for the purposes of maintenance and provision of essential infrastructure measures the proper functioning of the free zone.

Resolutions adopted for this purpose shall not have suspensory effect.

Article 13 In the owners of the land on which private free zones should be installed in them an easement which will aim the involvement or properties that destination. Said easement shall be constituted for a period equal to that established in the operating permit of the free zone and awarded by the owner or owners of the lands, appearing on behalf of the State, the Director of Free Zones.

The easement will be maintained by the deadline even if the authorization is revoked.
CHAPTER III

Ratings Free Zones

Article 14 users free zones are all natural or legal persons who acquire the right to develop in them any of the activities referred to in Article 2 is concerned. The companies located in FTZs may not develop industrial, commercial and service activities outside them.

Article 15 is that direct user who acquires the right to operate in a free zone by contract who operates the same whether the particular state or duly authorized. In all circumstances, for this purpose, the State may contract directly through the Free Trade Zones and provide the user warranty.

It is indirect user who acquires the right to operate in a free zone by direct contract with the user using or taking advantage of its facilities.

Contracts for which the user is acquired quality must be registered in the Free Trade Zones and once registered effective against third parties.

Article 16 The contracts signed with those who exploit zones direct users, or those who subscribe direct to indirect users and governing rights to use the free zone shall be considered absent if not previously approved by management Free Zones.

Article 17: The founders of corporations whose sole purpose of performing operations as users of the free zone may register directly with the Public Registry of Commerce and General articles of incorporation and the bylaws, accompanying the request of the registration certificate issued by the General Inspectorate of Finance who subscribed at least 50% (fifty percent) of the capital for three or more natural or legal persons and which has been integrated in money or property subject to pecuniary estimation least 60% (sixty percent) of the subscribed share capital. Once registration and once published in the “Official Gazette” an extract of such instruments, the company shall be considered legally constituted and may apply directly to the Director General of the Public Registry of Commerce, and is registered with the Registration of Merchant. The Bank of the Eastern Republic of Uruguay will release the deposit had been made for integration into money, justifying enrollment status in the Public Registry of Commerce and General. Likewise shall proceed in the event that it desist from the establishment of the company. Shall not apply in respect of those companies requiring integration of a new 20% (twenty percent) of the subscribed shares, under the second paragraph of Article 405 of the Commercial Code, as amended by Article 208 of Law 13,318 of December 28, 1964.

Article 18 users free zones used in the activities developed in the same, at least 75% (seventy five percent) of staff consisting of Uruguayans, natural or legal citizens, in order to maintain quality and such tax exemptions, franchises, benefits and rights that this law does give.

In exceptional cases, this percentage may be reduced with prior approval of the Executive, on account of special characteristics of the activity to develop and reasons of general interest.
CHAPTER IV

Exemptions and benefits

Article 19 Users of the free zones are exempt from all national taxes, or to be created, including those in which by law a specific exemption in respect of activities carried on in the same required.

Article 20 shall not be included in the preceding tax breaks special social security contributions and legal pecuniary benefits provided to persons of non-state public right to social security.

When the foreign personnel working in the free zone express in writing their desire not to benefit from the social security system in force in the Republic, there is no obligation to make corresponding contributions.

It also will not be exempt from Income Tax of Industry and Trade dividends or credited earnings or paid to resident individuals or legal entities abroad, when they are taxed in the country of domicile of the registrant and there tax credit on the same by tax paid in the Republic (paragraph d) of Article 2 of Title 4 of the Revised Text 1987).

Article 21 Goods, services, goods and raw materials, whatever their origin, introduced to the free zones are exempt from all taxes and any other instrument of equivalent effect on the import or application on the same occasion, even those where specific exemption by law regardless of their nature is required.

The goods, services, goods and raw materials from non-free national territory and are brought to the free zones, which will be in accordance with all applicable standards for export at the time.

Article 22 Goods, services, goods and raw materials introduced into the free zones and products made therefrom shall leave them at any time, exempt from all taxes, or any equivalent instrument, levies and surcharges created or to be created, including those specifically exempt by law regardless of their nature is required.

When they shall go free zones introduced from the non-free country, goods, services, goods and existing therein or made in the same raw materials imports are considered for all purposes.

Article 23 The National Port shall receive the amount of services actually rendered, for all the goods that have come from the destination or free zone, rates can not exceed the direct cost of the service.

For the purposes of the application of the rates for the National Ports Authority, the entry or exit of goods and their transportation from the free zones, international transit can be considered charged by the entry or exit only once.

Article 24 Public agencies that provide goods or services to users of the free zones may be established for these special promotional rates.

Monopolies of industrial and commercial services domain of the state shall not apply in the EPZs.

Article 25 The State, under the responsibility of damages, assures the user, during the term of his contract, tax exemptions, benefits and rights this law granted him.