|
LAW Nr. 15.921
MINISTRY OF ECONOMY AND FINANCE
MINISTRY OF INDUSTRY AND ENERGY
Montevideo, July 8, 1988
WHEREAS Free Zones Law Nr. 15.921 dated December 17,1987, has to be regulated by the Executive Power,
THE PRESIDENT OF THE REPUBLIC DOES HEREBY RESOLVE
FREE ZONES AND FREE ZONES MANAGEMENT
Article 1.-
The Republic of Uruguay is interested in the promotion and development of Free Zones with a view to encouraging investment, expanding exports, increasing the use of domestic labor and fostering international economic integration under the provisions of Law Nr. 15921 which is regulated herein.
Article 2.-
Any areas desingated as Free Zones shall be duly marked out and fenced, so as to ensure their isolation from the rest of the national territory. All access ways thereto shall be determined by the Dirección de Zonas Francas (hereinafter referred to as "Free Zones Office"), no goods or people being authorized to enter or leave the Free Zones by ways other than those expressly permitted by the above mentioned Office.
Article 3.-
The management of the State Free Zones and the supervision and control of the remaining Free Zones in the country shall come under the jurisdiction of the Free Zones Office of the Ministry of Economy and Finance. To this effect, said Office shall:
a) comply with and enforce the pertinent laws and regulations;
b) coordinate the rendering of the various services involved in the fulfillment of its duties, to which effect it shall be entitled to be in direct contact with any other national or regional authorities.
c) take all action required for having all access ways and boundaries of the Free Zones watched and the internal order thereof preserved, to which effects it shall be entitled to carry out all inspections deemed convenient for the control of the users and of private Free Zones.
d) propose the Ministry of Economy and Finance the Operative Regulations for the various Free Zones and the tariff to be charged in the State Free Zones.
e) resolve the installation and upkeeping of the pshysical, operational and functional infrastructure required for the operation and development of the State Free Zones.
f) propose the Ministry of Economy and Finance the cases in which the users of the Free Zones should be requested guarantees securing the services to be paid by said users
g) represent the State in any agreements to be entered with the users of the State Free Zones, upon authorization of the Ministry of Economy and Finance;
h) authorize any agreements subscribed between the operators of the Free Zones and the direct users thereof, or between direct and indirect users, as well as the assignment of such agreements, all of which in compliance with the provisions of this Regulation;
i) organize and keep the Register of Agreements subscribed by State or private Free Zones direct or indirect users;
j) authorize goods and people to enter or leave the Free Zones and resolve the documents required to those effects;
k) determine the documents regarding the inventory of goods and the reductions suffered under industrial processes, with a view to keeping the permanent record of stocks;
l) supervise the compliance by the users of all obligations under the pertinent laws, regulations and agreements, and take the necessary action in case of default;
m) report to the Ministry of Economy and Finance any infractions committed by private users and operators and enforce the applicable penalties in accordance with the legal provisions in force;
n) indicate the persons authorized to live in the Free Zones in accordance to the provision of Section 4 of Law number 15921;
o) adopt any other resolution and take any other action within the scope of its technical autonomy, with a view to fulfilling the duties assigned by Law Nr. 15921 and the pertinent regulations.
Article 4.-
All State agencies shall cooperate with the Free Zones Office so as to simplify any proceedings directly or indirectly related to the activities to be carried out within the Zones.
Article 5.-
Without prejudice to the technical autonomy of the Direccion Nacional de Aduanas (Uruguayan Customs Office) in the fulfillment of its duties, customs officers performing their duties in Free Zones shall act in direct coordination with the Free Zones Office.
ACTIVITIES
Article 6.-
Any industrial or commercial activities carried out or services rendered within the Free Zones in compliance with Section 2 of Law Nr. 15921 shall be stipulated in the agreements granting the users the capacity as such.
Article 7.-
Industries already established in non free areas of the country shall enjoy the benefits stated hereunder, so that exports from the Free Zones do not impair their exporting capacity:
1) They shall be given preference over users in the share of available quotas, granted to Uruguay by other countries due to preferential treatments (Section 42 of Law Nr. 15921 and Section 12 of this Regulation).
2) They shall be given preference over users in the share of available quotas for exporting to countries with quantitative restrictions as regards volume or value.
3) They shall enjoy the exclusive right to have a share in reciprocal trade agreements transacted under the bargaining power of the State in their purchases.
To the effects of paragraphs 1) and 2) of this Section and of Section 12, established industries shall be those which, on the date of requesting the respective quotas, are qualified to export from non free areas of the national territory and prove a satisfactory production capacity according to the volume to be exported of the good for which the quota is requested.
Article 8.-
Automotive indutries established in the country outside the Free Zones shall not consider as exports included in reciprocal trade agreements or as domestic components the goods with origin at the Free Zones or industrialized therein.
Article 9.-
Users established in the Free Zones shall not carry out any industrial or commercial activities or render any services outside said Zones. Moreover, they shall not be entitled to render from the Free Zones services to be used outside the Free Zones (paragraph c of Section 2 of Law Nr. 15921).
Article 10.-Users authorized to carry out financial intermediation activities in the Free Zones shall be entitled to perform therein any activities comprised in their line of business, provided said activities are directed to thir countries or to the users of the Free Zones.
Article 11.-
Unless otherwise provided for by Law Nr. 15921 and the corresponding regulations, the establishment and performance of any activities within the Free Zones shall be ruled by the general and specific provisions that the pertinent laws and regulations respectively set forth for said activities.
In the cases said provisions require an operating authorization or meeting certain requirements to carry out the proposed activity, the establishment or operation of the enterprise within the Free Zone shall be authorized by contract only upon the production of satisfactory evidence on the compliance with such requirements.
All bodies having supervising authority, whatever the nature tehreof, shall be entitled to exert their own powers with respect to the activities carried out in the Free Zones, under direct coordination with the Free Zones Office and in compliance with the applicable regulations.
Article 12.-
Users of the Free Zones shall be entitled to export goods under the preferential conditions granted to the Republic of Uruguay by other countries, subject to quantitative restrictions, under the same system applicable to industries established outside the Free Zones, provided that the latter shall in all cases be given preference in the share of the respective available quotas. The certificates of origin shall be issued according to the general regulations applicable to such destinations.
In the remaining cases, the Ministry of Economy and Fianance shall issue in the precribed manner the certificates of origin requested by the users, in compliance with the regulations applicable to each destination.
PRIVATE OPERATION FREE ZONES
Article 13.-
All applications for the operation of a Free Zone by private firms or individuals shall be submitted to the Ministry of Economy and Finance, together with an investment project proving the economic and financial feasibility thereof and the advantage that the country would gain from the implementation of said project.
Article 14.-
The following aspects shall be expressly mentioned in the project:
a) legal nature of the proposed enterprise;
b) location of the area proposed for its establishment;
c) causes and consequences of its establishment;
d) possibilities of future expansion;
e) services to be rendered, amount of the investment, financing sources and estimated personnel required;
f) description of infrastructure works (roads, sewerage, power and communications networks, etc.);
g) estimated term required for the implementation of the project;
h) evaluation of the number of users and their qualification;
i) term for which the authorization is requested;
j) mode of payment proposed in compliance with the provisions of Section 10 of Law Nr. 15.921.
The Ministry of Economy and Finance shall be entitled to request in each case any further information according to the circumstances.
Article 15.-
Legal persons intending to operate a private Free Zone shall have a sole and exclusive object related to the proposed activity.
Article 16.-
All applications filed shall be submitted to the Free Zones Office, the Ministry of Economy and Fianance being further entitled to ask any advice and opinions deemed convenient.
The term granted to the Executive Power to consider the issue shall not exceed forty-five days from the application filing date, excluding the periods during which the corresponding file is under study by the interested party or under consideration by the Advisory Committee referred to in the following section.
HONORARY ADVISORY COMMITTEE
Article 17.-
All appliactions for the establishment of State or private Free Zones deemed feasible by the Ministry of Economy and Finance, and thus liable to be authorized, shall be submitted to the Honorary Advisory Committee referred to in Section 6 of Law Nr. 15921.
Article 18.-
The well-founded opinion of the Free Zones Office shall be enclosed to said applications together with the bakground deemed necessary for the fulfillment of the duties assigned to the Honorary Advisory Committee under paragraph 1 of Article 7 of Law Nr. 15921.
The Honorary Advisory Committee shall be entitled to regulate its internal operation.
Article 19.-
The Executive Power shall grant the authorzation for the establishment of new Free Zones when applicable, in compliance with the Law and with this Regulation, and shall be entitled to require any guarantees deemed convenient.
ANNULMENT OF THE AUTHORIZATION AND OTHER SITUATIONS.
Article 20.-
Should the Free Zones Office observe the occurrence of irregular situations which affect or might affect the normal operation of a private Free Zone or the activities carried out therein, it shall be entitled to take or request the Operator to take any action deemed necessary or appropriate to stop or remedy such situations.
Private Operator shall cooperate with the Free Zones Office for the due compliance with the pertinent regulations and the best operation of the Zone under their control.
Article 21.-
Without prejudice to the provisions of the preceding section, in case of any infringement or violation of the applicable regulations or of the terms of the authorization by the private Operator, the Free Zones office shall inform the Ministry of Economy and Finance thereon, submitting the pertinent background. Should the necessary evidence arise from these proceedings - which shall be notified to the interested party -, the Ministry of Economy and Finance shall be entitled to levy a fine up to the maximum stipulated by law, which fine shall be fixed according to the nature and importance of the infraction. Without prejudice to the above, the Executive Power shall be entitled to resolve, according to the circumstances, the annulment of the authorization.
Article 22.-
Should the operating authorization be annuled, the Executive Power shall be empowered to take, through the Free Zones Office, the necessary transitory action for the upkeeping of the infrastructure and the rendering of the services required for the correct and normal operation of the Free Zone, The appeal which might be filed against such resolution shall have no suspensive effect.
Any action taken in compliance with the preceding paragraph shall not imply, with respect to the Free Zones Office, any substitution or assignment of the agreements entered into between the users and the operator of the Zone.
USER
Article 23.-
The first step to be taken in order to be granted the capacity of direct user of a State Free Zone shall be the filling of an application before the Free Zones Office.
Said application shall be enclosed to the Investment Project and other requirement set forth by the Free Zones Office. The applicant shall proceed at the same time to the reservation of the intended area, for the amount and under the conditions determined by said Office. Such reservation shall be charged and if the application is rejected, the repayment of the corresponding amount shall be set forth in the same resolution. Should the application be accepted, it will be possible to apply said amount to the payment of teh guaranty referred to in paragraph d) of Section 4 of this Regulation, if applicable.
Article 24.-
In the case of users of private Free Zones and of indirect users whatever the nature of the Free Zone, a draft agreement shall be submitted for obtaining the prior authorization referred to in Section 16 of Law Nr. 15.921, the Free Zones Office being entitled to request any further information deemed necessary.
The same procedure shall be applied for authorizing the assignment of users agreements.
Article 25.-
Stock companies referred to in Section 17 of Law Nr. 15.921 may file the application to be granted the capacity of user enclosing the certificate of the Inspección General de Hacienda (Finance Supervising Office) referred to in Article 29 of this Regulation.
Article 26.-
Once the application has been filed in compliance with the above provisions and the pertinent report has been drawn up by the Free Zones Office - which report shall refer to paragraph f) of Section 3 of this Regulation, if applicable - said application shall be submitted to the Ministry of Economy and Finance.
Should the user's application refer to intermediation activities between the supply and demand of securities, moneys or precious metals, the Ministry of Economy and Finance shall forward said application to the Banco Central del Uruguay (Central Bank of Uruguay) to the effects of the provisions of Decree-Law Nr. 15.322 dated September 17, 1982, and other related and supplementary provisions. Should the establishment of the enterprise be authorized, a sole resolution shall be issued by the Executive Power. The firm may be authorized to operate either in any Free Zone or in a particular Zone.
Article 27.-
Legal persons setting up as users in State or private Free Zones shall perform within the Uruguayan territory any of the activities set forth in Section 2 of Law Nr. 15921 exclusively limited to Free Zones.
Article 28.-
Stock companies engaged in performing activities exclusively in the capacity as users of the Free Zones shall submit before the Finance Supervising Office reasonable evidence to prove the subscription of fifty per cent of the capital stock therof by three or more individuals or legal persons and the payment of sixty per cent of the subscribed capital stock in cash or in goods liable of pecuniary valuation, by deposit placed with the Banco de la República Oriental del Uruguay (Uruguayan State Bank) in the name of the company in process of incorporation and under the heading of "Cuenta integración de capital" (Paid-up capital account).
Article 29.-
The subcription and payment of capital stock shall be attested before the Finance Supervising Office by means of the documents said Office might deem necessary, the corresponding certificate being issued thereon.
Article 30.-
Stock companies incorporated under Section 17 of Law Nr. 15.921 shall comply with the applicable provisions of Section 3 of Regulation Nr. 123/967 dated February 23, 1967, within a 150-day term following the date of registration of the company with the Registro Público y General de Comercio (Public Trade Registrar).
Article 31.-
All agreements for the establishment of users shall be subscribed with autograph signatures certified by a Notary Public. Upon the execution or approval thereof, said agreements shall be recorded at the Free Zones Office, which Office shall issue to each user a certificate stating his capacity as such. The proceedings commenced by any such user shall not be completed unless this certificate is produced before the pertinent bodies.
Article 32.-
Users shall draw up a list of foreign workers and employwees under their orders and state whether they are interested or not in availing themselves of the benefits granted by the Uruguayan social security system.
This shall be implemented by means of an affidavit signed by each worker or employee.
Article 33.-
Should any user intend to employ above twenty-five percent of foreign labor, he shall request so by writing to the Free Zones Office, stating the reasons for such request.
This Office shall submit a report thereon to the Ministry of Economy and Finance.
TAX EXEMPTIONS
Article 34.-
The State, under liability for damages, guarantees the user during the term of the agreement the exemption from all national taxes, either present or future, including those requiring by law a specific exemption, as regards any activities carried out in the Free Zones in compliance with the provisions appearing hereinafter.
Article 35.-
Users of the Free Zones shall be exempted from the Income Tax on Industrial and Commercial activities as regards the activities carried out therein.
Article 36.-
Dividends or profit credited or paid by the users of the Free Zones to individuals or legal persons domiciled abroad shall not be exempted from the Income Tax on Commercial or Industrial activities provided they are taxed in the country where the holder thereof is domiciled and provided, further, there is a tax credit in such country for taxes paid in Uruguay.
Article 37.-
Dividends or profit credited or paid by the users of the Free Zones to individuals or legal persons domiciled abroad shall be exempted from the Income Tax on Industrial and Commercial activities provided they are not taxed in the country where the holder thereof is domiciled or provided they are taxed in the country where the holder therof is domiciled and there in no tax credit in such country for taxes paid in Uruguay.
Taxpayers interested in enjoying the exemption set forth in the preceding paragraph shall produce a certificate issued by the competent State authority attesting that the above dividends or profit are taxed in the country where the holder therof is domiciled and there is no tax credit for taxes paid in Uruguay, or that they are not taxed. Said certificate shall be duly translated and authenticated.
Article 38.-
The income of insurance comapnies operating outside the Free Zones obtained from insurance contract entered into by the users of the Free Zones and covering risks therin or on the way to or from the Free Zones, shall not be included for calculatiing the income tax to be paid by said companies.
Article 39.-
Networth tax taxpayers users of Free Zones shall not include the capital allocated to the activity carried out in the Free Zones in the taxable amount or in the estimated value of the furniture and fixtures of their dwelling, if applicable.
Article 40.-
Shareholders of stock companies and limited partnerships holders of nominative share capital, users of Free Zones, shall not include the corresponding share in the capital of said companies allocated to the activities carried out therein in the taxable amount or in the estimated value of the furniture and fixtures of their dwelling, if applicable.
The same shall apply to the members of partnership users of Free Zones.
Article 41.-
The incorporation of stock companies referred to in section 17 of Law Nr. 15.921 shall be exempted from the tax on the incorporation of stock companies. Likewise, said companies shall be exempted from the tax levied on capital sock increases.
Should the aforementioned companies lose their capacity as users and be intereseted in modifying their corporate object so as to operate outside the Free Zones, they shall follow all proceedings required for the amendment of their bylaws in compliance with the general provisions applicable to these companies, and pay the tax stipulated for the incorporation thereof.
Article 42.-
Financial intermediation institutions authorized to operate in the Free Zones shall be exempted from the tax levied on Bank Assets.
Article 43.-
The following shall be exempted from the Value-added Tax:
a) the circulation of goods and the rendering of services within the Free Zones; b) the admission of goods into the Free Zones from abroad.
Article 44.-
The transportation of goods from outside the Free Zones into the Free Zoness and the rendering of services within or from non free areas to users of the Free Zones shall be considered as exports to the effects of the calculation of the Value-added Tax. The Dirección General Impositiva (General Tax Office) shall determine all requirements and proceedings deemed convenient for an efficient supervision thereof.
Article 45.-
The final admission of goods from the Free Zones to the domestic market shall not be exempted from the Value-added Tax if applicable. In the case set forth in Section 39 of Law Nr. 15.921, the taxable amount shall be the one resulting from the corresponding appraisal or public auction, as certified by the Free Zones Office.
Article 46.-
The following shall be exempted from the Specific Internal Tax:
a) the circulation of goods within the Free Zones.
b) the importatin of goods into the Free Zones from abroad.
Article 47.-
The General Tax Office shall set forth the proceedings for the repayment of the Specific Internal Tax included in the purchase of goods required for their activities which the users of the Free Zones make outside said Zones.
Article 48.-
The admission of goods from the Free Zones to the domestic market shall be considered as imports to the effects of the Specific Internal Tax.
In the case set forth in SEction 39 of Law Nr. 15.921, the taxable amount shall be the one resulting from the apparaisal or public auction, as certified by the Free Zones Office.
INCOMING AND OUTGOING GOODS
Article 49.-
As regards the Natinal Port Administration duties, goods imported or exported from/to other countries shall, to the effects of their transportation to/from the Free Zones, be considered as international transit, and the corresponding duties shall be charged upon the admissin of the goods to the Free Zones.
Should said goods be carried from a Free Zone to a non free area of the Uruguayan territory, the National Port Administration shall recalculate the duties for the services rendered according to the tariff for import duties.
Article 50.-
Any goods with origin at the domestic market required by industrial or commercial users to be consumed within the Free Zones, or to be used in construction works or in the repair of industrial equipments, facilities and buildings, may be admitted to the Free Zones upon the presentation of the documents required by the Free Zones Office.
Said Office shall be reponsible for the supervision and control of the compliance with this provision.
Article 51.-
The transportation of goods to/form the Free Zones shall be made by public or private transportation lines, having agents or representatives dyly authorized by the Free Zones Office and registered with said Office.
Article 52.-
The abandonment of goods in State or private Free Zones shall be deemed to take place:
a) when owners or consignees decalres so by writing;
b) after six months from the maturity date of the last overdue payment.
Article 53.-The auction sale of the goods abandoned within the Free zones shall be carried out by the Dirección Nacional de Aduanas (Natinal Customs Office) in compliance with the provisions in force.
Article 54.-
The National Customs Office shall appraise the goods to be sold directly or in public auction based on their customs current value plus import duties to be charge upon their admission to the home market.
BUILDINGS AND FACILITIES
Article 55.-
Users undertaking to make building works in the plots assigned to them shall submit a draft plan for the approval and authorization of the Free Zones Office, without prejudice to meeting the requirements set forth by the remaining competent authorities.
Article 56.-
The Free Zones Office shall authorize in each case and according to the type of enterprise the lines and features of the buildings to be constructed in the Free Zones.
The users shall carry out the approved project in compliance with the terms of the corresponding agreement.
Article 57.-
Before starting their activities, the users shall request the Free Zones Office to inspect the machinery and equipments, safety and public health facilities as well as working conditions.
All buildings in the Free Zones shall be constructed with fire-resistant materials and shall be duly insured.
Article 58.-
The Free Zones Office shall be entitled to determine or authorize special areas or facilities exclusively designed for exhibitions of goods, whether manufactured or not by the users of the Free Zones, the use of said areas being subject to the payment of a sum fixed by the Free Zones Office.
INFRACTIONS AND PENALTIES
Article 59.-
The Free Zones Office shall report the infractions by the users of Law Nr. 15.921, the pertinent regulations and contractual provisions, submitting the corresponding background to the Ministry of Economy and Finance.
Said Ministry shall determine the infractions committed as well as the applicable penalties according to the importance of the infraction and in compliance with the provisions of Section 42 of Law Nr. 15.921. The recurrence shall be an aggravating consideration.
The Free Zones Office shall be responsible for the enforcement of the corresponding penalties.
Article 60.-
Present users of the Free Zones being legal persons shall attest before the Free Zones Office, within a 120-day term as from the publication of this Regulation, that they are already engaged in the modification of their corporate object in compliance with the provisions of Section 27 hereof.
Article 61.-
Regulations Nr. 734/976 dated November 3, 1976, 416/980 dated July 16, 1980, 65/983 dated March 3, 1983, 68/984 dated February 10, 1984, 566/985 dated October 18, 1985, and those dated December 3, 1986 and December 17, 1986, as well as any other regulations which might directly or indirectly be contrary to this Regulation, are hereby repealed.
Article 62.-
Let this Regulation be published, etc.
Ricardo Zerbino, Secretary of Economy and Finance
Jorge Presno, Secretary of Industry and Energy
Julio María Sanguinetti, President of the Republic
|
