Ola Uruguay Real Estate and Investments

If you’re considering setting up a small boutique hotel along Uruguay’s alluring coastline, or a guesthouse in the charming old district of its colonial capital, well here’s some news that might just be the push you need to get scouting.

The Uruguayan government has put in place a number of incentives to encourage local and foreign investors to put money into certain industries, and tourism is one of them.

In 2008, 1.75 million tourists visited Uruguay, an increase of 12% on the year before. And already figures for 2009 show an increase compared to the same time period last year. Tourism is an important growing industry in Uruguay, and the government knows it.

Incentives for tourism
To sustain and develop investment in the industry, the govenment is giving tax breaks for tourism projects that offer lodgings—including hotels, apart-hotels, hostels, and resorts among others—and to tourism-related projects that offer cultural, commercial, sports, recreational, entertainment, and health service facilities.

What does this mean for you? Well if you do set up a hotel or guesthouse, your project will be exempt from corporate income tax, and capital and asset tax for ten years. And you will benefit from tax exemptions on the purchase or importation of fixed assets for equipping or refurbishment of equipment. Exemptions also extend to the acquisition of goods and services for construction or improvement of the project.

If you do decide to take this route, or to take advantage of any of the tax breaks available in Uruguay, we would encourage you to get some professional advice. Fischer & Schickendantz Attorneys is one of Uruguay´s leading law and foreign investment advice firms, based in Uruguay’s capital Montevideo.

Fischer & Schickendantz—Uruguayinvest Foreign Investment Advisors, (Managing Partner Juan Federico Fischer), Rincón 487, Piso 4, Montevideo 11000, Uruguay; tel. (+598)2-915-7468 ext. 130; cell (+598) 99 925-106; fax (+598) 2 916-1352; e-mail: jfischer@fs.com.uy; website: www.fs.com.uy.

Cultural Incentives Fund
In March of this year, the government announced the launch of a new cultural incentives fund, put in place to encourage artistic and cultural projects in all corners of the country and sections of society. Businesses who make a donations to this fund will be able to offset their contribution on their tax bill.

Donations can be made to a general fund, a fund for individual sectors, or to one of the funds set up for specific projects. You can download the application form here (website in Spanish).

For more contact Cultural Incentive Funds, Juan C. Gomez 1276, 11100, Montevideo, Uruguay; tel. 916-98-16; e-mail form here; website: www.fondos deincentivocultural.gub.uy.

Other industries that the Uruguay government offers tax incentives for include forestry, agri-business, and fishing. We’ll be covering these tax breaks in future issues.