Uruguay Strengthens Its Position As An Attractive Destination For European Investors

Last February 2023, the Economic and Financial Affairs Council  (Ecofin) of the European Union ("EU") removed Uruguay from Annex II, a chapter comprised of countries that fail to comply with at least one of the European Union tax standards, but have still made commitments to introduce necessary reforms to statutes.

Ecofin concluded that Uruguay has complied with all commitments made with the European Union, having demonstrated its willingness to cooperate on issues of good tax governance. The changes introduced, both at a legal and regulatory level, are aimed to strengthen the source principle for business income, to guarantee tax certainty, and to avoid the potential imposition of defensive measures by the EU.

The adjustment in the rating communicated by Ecofin strengthens the image of Uruguay on the international stage and reinforces its attractiveness for European investors. In recent years, Uruguay has become an attractive destination for the installation of foreign companies in their expansion process, thanks to political, economic and social stability; the existence of benefits or incentives for investors; easy access to competitive and qualified human resources; and its good quality of life.

It is worth noting that the European Union has been -and is- an international strategic partner for Uruguay. According to the EU Report published in September 2022:

  • In 2021, Uruguay's exports to the EU totaled USD 1,574 million, representing 15% of its total exports and placing it third in the ranking of export destinations for Uruguay.
  • The EU is the first investment region in Uruguay (representing 36% of the stock of Foreign Direct Investment in 2020) and followed by the countries of South America.
  • European investments (mainly with Spanish and Finnish capital) have played a key role in the development of strategic economic sectors in Uruguay, highlighting agribusiness, trade, renewable energy and information technology.

In this context, the Strategic Association Agreement between Mercosur and the European Union (which is highly advanced) will consolidate Uruguay's attractiveness as a cutting-edge investment destination, while promoting trade and investment between both regions, boosting innovation, encouraging greater integration of production chains, and promoting sustainable development.

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Santiago Castellán's picture

Santiago is Managing Partner of Castellán Abogados, full service professional services firm, strongly committed to facilitating the business of local and foreign companies, which provides comprehensive professional support both in legal and notarial matters, as well as in fiscal, accounting and tax matters.

With more than 40 years in the market, and a strong portfolio of clients who have placed their trust in the firm for several decades, today Castellán is positioned as one of the leading firms in the country.

With an emphasis on prevention and risk management, the firm works to promote companies, thereby generating a positive impact on the country's economy, on society, and on people.

Santiago's position combines the management of the services firm, with the elaboration and execution of its strategy, and the monitoring and personalized attention of clients and their affairs.

Areas of Practice

Economic Sectors


PhD in Law and Social Sciences, graduated from the University of the Republic. LL.M with emphasis in Conflict Resolution (Distinction), Queen Mary University of London (United Kingdom), 2018. Scholar of the QMUL Latin American Scholarship.

Her practice focuses on pre-litigation dispute negotiations as well as complex litigation and domestic and international arbitration, with extensive experience in Corporate, Civil and Commercial Law.

She participated in important international seminars on negotiation, mediation and arbitration, and in March 2018 she was chosen to participate in the 4th Annual Investment Conference of the Organization for Economic Co-operation and Development (OECD) in Paris.

In corporate matters, she has extensive experience advising Uruguayan and foreign companies in their daily activities and projects, contributing to the development of international strategies.