New law grants benefits to technology experts from around the world who choose Uruguay as a place to work and live.

The Uruguayan Parliament approved a law that seeks to encourage the arrival in the country of foreign and local technicians and professionals in the Information Technology sector. This law is intended to attract skilled labor for companies in the industry, to which it will offer tax incentives.

Workers who move to the country will be able to choose “concerning labor income, to pay the Non-Resident Income Tax (IRNR)” for the “fulfillment of work contracts in relation of dependency with companies with regular and permanent activity.”

In addition, they may choose “not to benefit from the social security system in force” in Uruguay. In this case, they will not be obliged to make the corresponding contributions.

The Information Technology sector had an early development in Uruguay, with a strong export profile that placed it in a prominent position in the region. Uruguay is the largest software exporter per capita in Latin America and the fourth largest exporter in dollars in Latin America, according to data from 2021.

In recent years, the sector has shown strong dynamism and has grown well above the rest of the economy. According to the latest available figures published by the Uruguayan Chamber of Information Technologies (CUTI), the sector’s turnover amounted to almost US$ 1.95 billion in 2021, 3% of Uruguay’s GDP.

Exports have grown steadily over the last ten years.
According to the latest CUTI data, US$ 1,006 million were exported in 2021, with the United States as the leading destination, followed by the United Kingdom, Chile, and Colombia. The sector brings together some 530 companies employing approximately 24,000 people.

If microenterprises are included, employment amounts to 27,400 people, according to Ministry of Labor and Social Security information.

Those who comply with the new regulations must meet three conditions: be a foreigner or Uruguayan and not have been considered a tax resident in Uruguay in the five fiscal years before the transfer; work full time in Uruguayan territory, i.e., effective physical presence of at least two-thirds of the days of the calendar year and generate income exclusively through employment contracts in a relationship of dependence, directly related to activities in the ICT sector.

The conditions must be renewed annually. The new law will be in force for employment contracts initiated up to and including February 28, 2025, and, in such cases, will provide a time frame in which ICT professionals can take advantage of these benefits.