Infrastructure investment in Uruguay has traditionally been structured through public work concessions or financed through standard collateral secured loans, with occasional large-scale finance fostered by development banks, international financing institutions and export credit agencies. Between 2010 and 2016, the country received an increased flow of direct foreign investment in a large number of projects with expected high cash flow in non-traditional industries such as oil exploration, wind farms, photovoltaic farms and infrastructure.

During the past two years, new projects have been developed under the Public-Private Partnership Law No. 18,786 of 8 August 2011 (the PPP Law). The PPP Law only deals with private sector and government joint ventures in certain areas – mainly infrastructure (roads and railways), energy infrastructure and social investment (prisons, health centres, hospitals and education centres). The Large-Scale Mining Law (the LSM Law, approved in September 2013) regulates this specific kind of mining activity for the first time and sets forth the contents of mining exploitation agreements between, and to be signed by, miners and the executive branch; these agreements also regulate the assignment of exploitation rights as security in favour of the financing parties.


Two main investment projects are expected to take place in the years ahead: the construction of a new UPM Pulp mill and the construction of 290 kilometres of railway that will be used to carry the product from the new mill to the port of Montevideo.

On November 2017, a memorandum of understanding (MOU) was signed between the government and UPM, the Finnish pulp and paper maker, for the installation of a second mill, a project with estimated costs totalling US$6 billion. Under this MOU, UPM required the government's commitment to update the country's infrastructure, in particular the railway system. A call for bids for the construction of approximately 290 kilometres of new rail track (the Central Railway Project) was awarded in the last quarter of 2018 to a joint venture of local, Spanish and French companies.

Seven PPP road projects are under way – currently, only one of these is being executed, while the others are still at the negotiation stage. Lastly, the government has issued four PPP projects for the construction of education centres.

The mining industry has seen less activity: the government failed to reach an agreement with the private sector regarding the first mining exploitation agreement to be governed by the LSM Law.

Regarding oil and gas, onshore and offshore exploration is ongoing, although some of the exploration companies have already renounced their rights and stopped exploration.

Uruguay has diversified its energy matrix and although most solar and wind plants have already been financed and are under construction, new projects include electricity transmission lines and international connecting systems with Brazil. In 2017, the government closed a deal with a private developer for the construction of more than 200 kilometres of a new transmission line to connect the Melo converter with the Tacuarembó substation. This was structured under an operation lease and construction began in 2018. New bids for additional construction of transmission lines are to be awarded in 2019.


Projects have been structured through public work concessions or PPP projects, or financed through standard collateral secured loans. Physical assets owned by the project company are provided as collateral. Other standard models such as build-own-operate transfer, build-operate-transfer and build-operate-lease are not frequently seen since project companies often own the assets and may or may not provide a service.

This was the case, for example, with one of the first pulp mill construction projects, where no public services were to be provided. Financing was secured by mortgages on the real estate properties where the mill was to be built and by pledges on each of the spare parts to be used to build the plant. Further, supply agreements with raw material suppliers were executed and, at the same time, conditional assignment agreements of the supply agreements were granted in favour of lenders. The aim was to place lenders in such a situation that, in the event of foreclosure, the whole project could somehow be sold or offered to a new developer.

Wind and solar farm projects, and construction lines are also being structured under project finance methods, using direct and indirect agreements, and operation and maintenance agreements. In other situations, a developer promises to pledge the wind generators once they have been constructed and the property transferred to the developer, and mortgages the land or executes conditional lease assignment agreements.

In the past, the Uruguayan state and companies developing large projects have entered into investment agreements covering different project areas, from tax benefits to transport, permits, among others. Agreements of this type are usually executed under Law No. 16,906 and Decree No. 455/007, which refer to the investment promotion regime. It is not clear whether Law No. 16,906 validates the full scope and obligations that these agreements may include; however, some or all obligations may nevertheless be valid.

More recently, once wind farm and photovoltaic projects have reached completion, the market has seen opportunities for the issuance of project bonds, locally or abroad.


i Management of risks

Common risks include the following:

  1. Commercial risk: Sponsors' guarantees and share retention agreements are usually requested.
  2. Operational risk: Monitoring agreements have been used in, for example, toll road projects.
  3. Political risk: This is a low risk since Uruguay has been a stable democracy for most of the 20th and 21st centuries (interrupted only by a military government from 1973 to 1985) and has no recent record of creeping expropriation. Insurance may be requested to mitigate this risk.2 Lobbying has occasionally occurred to obtain investment treaties addressing these matters.
  4. Inflation and exchange rate risk: Although exchange rate fluctuations occur, this risk can be mitigated by the fact that many agreements (including supply agreements) and loans can be agreed on any foreign currency. The sale of collateral in the event of foreclosure can also be carried out in a foreign currency. US dollars are widely used for all transactions, even in the power purchase agreements signed by renewable generators with the National Administration of Power Plants and Electrical Transmissions (UTE) and the operation leasing arrangements entered into by UTE with private constructors for transmission lines.
  5. Environmental risk: This is usually offset by providing an environmental impact assessment (EIA) and requesting compliance with not only local environmental laws but also international standards in the relevant industry.
  6. Offtaker risk: In public agreements in which the Republic or public entities act as counterparties, generally the risk of non-payment by the offtaker has not been seen by investors as a serious threat. The Republic has never been in payment default of public debt and currently enjoys investment grade status.

ii Limitation of liability

Under Uruguayan law, actual damages and lost profits may be recovered. Under contract law, the victim may also recover all other damages that a negligent breaching party could have foreseen, and if the breaching party acted intentionally, the victim may also recover unforeseen damages.

The concept of damages includes patrimonial and extra-patrimonial damages and a defendant is liable for the harmful results that have been caused by its acts. If no harm is caused by the negligent act, it is not liable. Recently, the courts have changed their stance and have granted moral damages to legal entities (such as companies). Prior to this, moral damages were only granted to individuals.

The general liability system of the Civil Code allows parties to arrange exemption from or limitation of liability, although restrictions apply in cases of wilful and grossly negligent behaviour, in which it is understood that no limitation may apply. Gross negligence implies any verified breach of contract that, because of the extremely careless manner in which it happened, cannot be excused. The term 'extremely careless manner' implies neither preventing nor considering that which any other party would have prevented or considered: in other words, failing to take the most obvious or evident actions, or failing to act in the most basic way necessary, to prevent the damage.

Further, under the Civil Code regime, force majeure is always a justified cause for non-compliance and works for both parties to a transaction.

iii Political risks

The state does not usually grant guarantees or letters of comfort for private entrepreneurs. However, Uruguay has ratified investment treaties with certain countries (e.g., the United States, Switzerland and Finland) that comply in terms of arbitration and compensation for damage caused to investors. Recently, an investment promotion and protection treaty was signed with India, under which investments in Uruguay by Indian nationals shall not be nationalised or expropriated (directly or indirectly) except for public purposes and pursuant to non-discriminatory laws, and in which case fair compensation (i.e., the market value of the expropriated investment) shall be paid immediately.

Property rights are expressly recognised in the Constitution for both nationals and foreign nationals. Furthermore, specific procedures are legally set out for expropriation, which establish that fair and due compensation has to be paid by the state to the former owner in all cases.

The Multilateral Investment Guarantee Agency has also participated in projects in Uruguay, providing guarantees, for example in the construction of a pulp mill.

The LSM Law states, particularly in relation to the mining industry, that exploitation agreements signed with the executive branch may be renegotiated should the public administration change the cost-benefit parameters in force at the time of execution of the agreement (invoking national interest and provided certain conditions are met).


A common form of security that may be required is collateral on the various assets of a project, since floating charges on the overall assets of an entity are not accepted.

The PPP Law authorises a contractor to institute pledges over the cash flows generated by the PPP project, guarantee trusts and all other real or personal guarantees over the goods and rights – whether existing or future – in favour of creditors (other than the administration) for the execution of the PPP contract. The Law expressly allows for a pledge over the rights originated under the PPP contract (concession pledge) but this is limited to obligations assumed with third parties for the financing of the operation or maintenance of the projects, as well as those resulting from a trust created for this purpose.

A wide range of collateral is available, including the following:

  1. Bank accounts: a pledge or a registrable pledge. To create a pledge, an agreement must be made in writing, signed by the title-holders of the account and the creditor, and notified to the bank; dispossession of the funds of the account may be effective or symbolic. In the case of a registrable pledge, an agreement must be made in writing, signed by the title-holders of the account and the creditor, and signatures must be certified by a notary public. The registration is made by the applicable national registry granting priority over any other security perfected thereinafter and enforceable against all third parties (this applies to all registrable pledges, regardless of the assets being pledged).
  2. Equipment: This can be created by a pledge or a registrable pledge depending on the interests of the debtor and creditor. In both cases, the agreement must be made in writing and signed by the debtor and creditor. Under a pledge, dispossession of the equipment from the debtor to the creditor (or third party) must take place. Under a registrable pledge, the debtor maintains possession of the equipment.
  3. Real estate: a mortgage may be created. A public deed must be signed by the debtor and creditor before a notary public and registration thereof is made with the corresponding public registry granting priority over any other security perfected thereinafter and enforceable against all third parties. The same applies to mining exploitation permits.
  4. Receivables: either an assignment of contract rights as security or a registrable pledge can be created. In the former case, an agreement must be made in writing, signed by the assignor and assignee, and the document (title) of the credit must be handed to the assignee. The parties must notify the obligor for payment to be made to the assignee. In the latter case, an agreement must be made in writing, the signatures must be certified by a notary public and the agreement must be registered with the corresponding public registry. For example, under the current power purchase agreement template signed by renewable generators, assignment of the agreement and its credit is already covered.
  5. Shares (in book-entry and certificate form and other securities): A pledge can be created for shares held in certificate form. An agreement must be made in writing between the debtor and creditor and dispossession of the shares from the debtor to the creditor, or to a third party (depositor), must occur. If the shares or securities are held in book-entry form, a registered pledge applies. An agreement must be made in writing between the debtor and creditor. Registry of the agreement must be made before the entity that holds the book entry of said shares or securities, which will make the proper note in the book.

Under Uruguayan law, a lender is not entitled to exercise self-help remedies (a court order is mandatory) and, in principle, step-in rights in favour of creditors without court process are not provided for in Uruguay.

However, the PPP Law, expressly states that in cases of early termination of a PPP contract upon default of a contractor or abandonment, the administration may step in for no more than 24 months to guarantee continuity of services. Upon expiry of this term, it must be resolved whether the administration will continue to render the services or whether a private entity will take over, using the mechanisms set out in the PPP Law.

The LSM Law, in turn, states that clauses may be included in an exploitation agreement signed with the executive regulating the assignment of the exploitation permit to financing parties as security so that said financing parties may assign it in turn to a third party with the executive's prior authorisation (to be granted if that third party complies with the legal requisites to be a holder of the mining exploitation permit).


The use of bonds in construction contracts and project finance transaction is not widespread, although for projects that have reached completion, the market is starting to see this type of refinancing alternative. Standby letters of credit are not regulated under Uruguayan law. However, they are considered independent obligations of the issuing bank and are frequently used as a form of payment guarantee in the event of non-performance by the applicant of a contractual or other obligation with the beneficiary. The most common bonds are bid bonds and performance bonds.

Bank guarantees are similar to standby letters of credit, the main difference being that they are regulated by local laws and regulations. They are issued to cover an underlying transaction or contractual obligation. The most common guarantees are customs guarantees, lease guarantees and bid guarantees.

To engage in insurance business in Uruguay – for national or foreign individuals or legal entities and for any risk located in Uruguay – it is necessary to establish a corporation with registered shares (which may belong entirely to a foreign insurance company), having as its sole purpose insurance or reinsurance activities, and it must be authorised by the executive branch on the advice of the Superintendency of Insurance and Reinsurance within the Central Bank of Uruguay.

Further, foreign reinsurance companies that want to operate in Uruguay must have a risk rating equal or superior to A- determined by a risk rating agency selected from the entities established by the Superintendency of Financial Services.


Similarities in the judicial enforcement of pledges, registrable pledges and mortgages have been reinforced with the recent amendment to the General Procedure Code brought about by Law No. 19,090.

These proceedings begin with the filing of a creditor's enforcement plea furnished with the corresponding title and usually requesting attachment (embargo). Once the attachment is in place, the debtor is notified and summoned to appear within 10 days. The debtor's only defences are payment of the debt or invalidity of the title.

One or more hearings may take place if defences are raised. Once the judgment has been affirmed on appeal (or in the event that the debtor fails to file a defence or appeal), the mortgaged or pledged assets are appraised (unless this was waived in the agreement) and following the appraisal, the title deeds to the assets are demanded from the debtor (mortgages and vehicles only), and finally the assets are sold at a public auction. The lender may appear at the auction and bid against the lender's unpaid credit.

For registered pledges, judicial enforcement applies unless the parties expressly agree upon an extrajudicial enforcement, in which case there is no need for attachment of the assets; the creditor sells the assets directly.

According to the Reorganisation Act No. 18,387 (the Act), there are two types of reorganisation or bankruptcy procedure: voluntary reorganisation (when the debtor acts upon its own insolvency) or necessary reorganisation (when the same is requested by any creditor or by the debtor but its assets amount to less than its liabilities). The first stage is an automatic stay of all enforcement procedures (including automatic stays of the enforcement of secured credits by means of pledges or mortgages for 120 days) during which a reorganisation procedure is negotiated; if not, the court will order the sale of the company's ongoing concerns as a whole, or if this option fails (i.e., no bidding is made), the company's assets are sold in parts. The Act also calls for a private reorganisation agreement in which the debtor and 75 per cent of the creditors may enter into a reorganisation agreement (this does not affect secured creditors, who may pursue the recovery of their debts by enforcing their pledges or mortgages).

The Act provides that once bankruptcy has been declared, no creditor may initiate enforcement procedures against the debtor; however, in the case of credits guaranteed by pledges or mortgages, this prohibition (automatic stay) will terminate 120 days after the declaration of bankruptcy, in which case enforcement must be sought from the bankruptcy judge. Further, contractual provisions that declare agreements automatically terminated, or enable any party to terminate the agreement in cases of insolvency or declaration of bankruptcy, shall be null and void.

Termination in a non-Uruguayan currency is permitted. Once bankruptcy has been declared, however, the insolvent party's unsecured obligations shall be automatically converted into Uruguayan pesos at the exchange rate applicable on the date the bankruptcy is declared. Obligations secured by pledges or mortgages must be collected in the original currency, up to the amount of the security.


i Licensing and permits

Prior environmental approval (AAP) is required for certain projects, such as construction of ports, terminals for the manipulation of oil or chemical products, electric generators of more than 10MW, plants for production and transformation of nuclear energy, energy transmission lines of 150kV or more, and construction of roads and railways. The procedure involves the following steps:

  1. notification of the project to the Ministry of Housing, Land and Environment (DINAMA) by providing information such as identification of the holder of the project, the landowners of plots affected and the responsible contractors; the location and description of the area of execution and influence; and a description of the possible environmental impact, stating any applicable pre-emptive or mitigating measures to be taken; and
  2. classification of the project by DINAMA as category A, B or C (see below). DINAMA has 10 business days to confirm or correct the classification proposed by the holder of the project. An environmental classification certificate is issued and communicated to the applicable competent authority.

A project is classified as category A if its execution has a non-significant negative environmental impact, category B if its execution has a moderate negative environmental impact, whose effects may be easily eliminated or minimised, or category C if it may cause significant negative environmental impact, whether or not preventive or mitigation measures are included.

If the project is classified as category A, the AAP is granted with no need for any further steps. Parties whose projects have been classified as category B or C need to carry out an EIA at their own cost and file a request for the AAP with DINAMA. Details of the project (except for information deemed to be of a commercially or industrially confidential nature) and the EIA are then made available to interested parties for comments for 20 business days. A public hearing follows if the project has been classified as category C or if DINAMA believes that the project will have a significant cultural, social or environmental impact.

Finally, DINAMA issues a resolution stating whether the AAP has been granted. The AAP will only be granted if the project is considered to cause only acceptable residual negative effects. Also, DINAMA may grant the AAP subject to the introduction of amendments to the project or the adoption of any preventive or mitigating measures deemed necessary. The AAP will be valid for a term determined by DINAMA.

ii Equator Principles

Application of the Equator Principles is not common practice in Uruguay.

iii Responsibility of financial institutions

In principle, under Uruguayan law, financial institutions have no administrative, civil or criminal liabilities when participating as lenders in a project finance transaction. Laws are in place for the prevention of money laundering and terrorism financing and have to be complied with by financial institutions.



The PPP Law limits the application of PPP projects to the activities indicated therein. Infrastructure projects include:

  1. road works (including rural), railways, ports and airports;
  2. energy projects (except for monopolised activities);
  3. waste disposal and treatment; and
  4. social infrastructure, including prisons, health centres, educational centres, public housing, sports centres and urban projects (improvement, equipment and development work).

Contracting of educational, health or security services is expressly forbidden, as are contracting services relating to the rehabilitation of prisoners, and the implementation of educational and health centres or prisons. The exploitation of monopolies is also excluded.

The PPP Law expressly sets out the principles that PPP contracts should follow, including transparency and publicity, public interest, economic efficiency, proper distribution of risks, transfer of assets to the government when required, equanimity, temporality (not more than 35 years), fiscal responsibility, control, sustainable growth and regard for labour conditions. It further defines the 'economic efficiency principle', stating that the value-for-money concept includes the reduction of costs, risk levels and availability.

The content of PPP contracts is also regulated. They should include:

  1. purpose;
  2. risk-sharing conditions;
  3. performance objectives;
  4. remuneration – causes and procedures to modify the remuneration and maintenance of the contractual financial-economic equation;
  5. payment terms;
  6. control regulations;
  7. penalties;
  8. conditions for amendments and termination;
  9. ultimate purpose of the work and equipment after termination of the contract;
  10. contractor guarantees;
  11. mechanisms applicable to liquidation of the contract, including compensation;
  12. reference to the relevant general terms and conditions or particular ones; and
  13. other contractor obligations, such as the presentation of audited financial statements.

A contractor may assume different forms and be paid by the users, the administration or both. Compensation and retention rights in favour of the administration for the implementation of penalties under the PPP contract are granted. It also provides that the administration will be able to receive certain income whether from the contractor or users. Furthermore, it is stated that the administration will be able to give minimum revenue guarantees, but it is not allowed to ensure profits or levels of returns. When required, the executive should grant some of these contributions.

The contracting procedure as regulated in the PPP Law is divided into stages.

A contract can be initiated ex officio by the administration or by a private initiative submitted by a proponent. The administration should receive the assessment document referring to the feasibility and suitability of the project concerned. Based on the characteristics of each project, the subsequent initial evaluation will be based on the pre-feasibility, feasibility and impact studies. These studies will be presented to the Planning and Budget Office and the Ministry of Economy and Finance for their consideration and the preparation of reports.

The proponent of a private initiative (which must be submitted to the National Development Corporation) will have certain rights and preferences: it can obtain the reimbursement of certain costs incurred in feasibility studies if it is not awarded the contract, and can also obtain an advantage of up to 10 per cent of its offer with respect to the best offer; the promoter of the initiative will not pay to receive a copy of the terms and conditions of the bid documents (which is a requirement to place a bid). All the information regarding a private initiative is confidential.

Once reports from the relevant bodies have been obtained, the contracting administration can start the competitive dialogue, which is one of the most innovative aspects of the PPP system and consists of a debate held between the administration and the interested entities that fulfil the technical and economic solvency requirements. This allows the parties to discuss all the relevant aspects of the PPP contract and define the special terms and conditions. This phase is essential for the private sector to be able to introduce modifications or adjustments.

After the competitive dialogue and notification to participants, the administration will call for the submission of offers. The call can only be directed to those that have participated in the competitive dialogue. However, if only one party participates, other interested entities should be admitted. The call should also state whether the participants in the competitive dialogue will receive any preference or compensation. Upon completion of the stages and approvals mentioned in the PPP Law, and the institution of the relevant guarantees, the administration will award the PPP contract and execute the relevant agreements according to the terms and conditions discussed during the competitive dialogue.

ii Public procurement

The general public bidding law of Uruguay is set out in the Coordinated Text of the State Accounting and Financial Management Law (TOCAF), which states that tender procedures shall be ruled by the following principles: publicity, so that the largest number of competitors can be attracted; equal treatment of bidders and impartiality of the public administration; and stability, resulting from strict compliance with all applicable rules and regulations. Other general principles include flexibility, materiality and truthfulness.

Under TOCAF, however, preference may be given to national products provided they are of the same quality as foreign ones. In public work contracts, preference may be given to offers that imply a larger use of domestic raw materials and labour.

Administrative acts in bidding procedures or public work contracts may be challenged before the Court of Administrative Litigation, the body in charge of annulling or maintaining all administrative acts. Under the legal regime in force, the submission of a request for review in some cases has an automatic suspensive effect on the act being challenged, unless the administration, by a duly grounded decision, declares that a suspension would affect urgent needs of service or would cause serious damage.


The Uruguayan authorities encourage all investment, without discrimination between local and foreign investors; incentives for investments are available for both. Furthermore, and under the Investment Law, the remittance of profits and repatriation of capital are guaranteed.

However, specific restrictions on ownership do apply to foreign nationals regarding certain industries, such as aeronautics, the maritime industry and the media.

The tax system does not discriminate against nor favour foreign investment. However, the tax burden is influenced by the legal vehicle adopted to perform activities in Uruguay.

Further, there is a general system for promoting industrial activities, and a special promotion systems for specific activities and sectors such as fishing, merchant marine, national aviation and hydrocarbons, with varying benefits.

The Industrial Promotion Law makes it possible to grant national interest status (ex officio or at the request of the interested parties) to any activity, specific project or company fulfilling objectives such as:

  1. increasing and diversifying exports of processed goods incorporating the greatest possible added value;
  2. establishment of new industries and expansion or reform of existing industries, when this implies better use of raw materials and labour; and
  3. technological research geared to exploitation of non-exploited local raw materials, and training of technicians and workers.

National interest status implies promotional benefits in terms of credits (to buy assets, cover establishment expenses, imports, raw materials, etc.) and in terms of taxes (total or partial exemption from taxes, assessments, contributions and rates or public prices, as well as total or partial exemption from taxes and duties on imports or in connection with imports).

With the exception of certain generic benefits regarding imports of equipment, all other tax benefits must be requested by the interested parties and must be expressly granted or recognised by the authorities in each case.

Under Regulatory Decree 455/007, provision is made for a direct income tax exoneration based on two parameters: the project scale (determined according to the invested amount) and the 'score' obtained by the project, which will be determined on the basis of a matrix of objectives determined by the executive.

Repatriation of profits and investment

The Uruguayan exchange market operates under complete freedom of transaction and holdings in currency and metals; there are no exchange control laws in force. Similarly, there is total freedom regarding transfers and remittances to and from the country in any currency.

In principle, there are no restrictions, controls or fees on remittances of investment returns or loan payments to parties in other jurisdictions, but taxes do apply. In the case of dividend distributions from Uruguayan corporations to non-resident entities without permanent establishment in Uruguay, a tax rate of 7 per cent applies on the amount of results distributed that constitute taxable income subject to corporate income tax.

If a reduction in the paid-in capital was resolved, and the capital was repaid to the shareholder, the 7 per cent rate will also apply to the amount that exceeds the face value of shares of Uruguayan corporations, as this payment will be assimilated into a dividend distribution and will be treated equally.

Payments of capital under loans are not taxable; however, payment of interest to non-resident entities without permanent establishment in Uruguay will be taxable at a rate of 12 per cent, or 25 per cent if the creditor is located in a jurisdiction of low or null taxation (based on a list issued by the fiscal authority).


i Special jurisdiction

There are no specific courts or tribunals in Uruguay dealing with project finance transactions or constructions contracts.

A foreign investor will not need to establish a place of business or be permanently domiciled in the country to appear before a court or arbitration committee; however, it is compulsory to establish a special domicile in Uruguay for the purpose of serving any notices, court papers or writs within any procedure.

ii Arbitration and ADR

Although judicial proceedings are still the primary manner in which disputes are settled, alternative dispute resolution is widespread. The fact that courts are overburdened and judicial proceedings are time-consuming contributes to the success of ADR, the costs of which, however, are substantially higher.

Mediation bodies are created by the Supreme Court of Justice. Parties that consent to mediation discuss their issues and are encouraged to arrive at an agreement by the mediating bodies, which do not issue decisions or have power to impose them upon the parties. Mediation is generally limited to small claims.

Conciliation constitutes the most popular form of ADR. It entails one or more hearings before a judge to attempt settlement and is provided for by the General Code of Procedure (GCP), which determines that a party willing to take legal action must first engage in conciliation. Conciliation is also compulsory during proceedings at a first hearing. If the parties settle, any such agreements are binding upon the parties and directly enforceable.

Arbitration is laid down by the GCP, which includes thorough procedural regulations that apply in the absence of determination thereof by the parties. In principle, arbitration is decided in equity, but parties may agree that the arbitrators apply statutory law. All disputes – including project finance and construction disputes – can be resolved through arbitration, with the sole exception of matters that cannot be settled by the parties (namely criminal matters, family law and proceedings involving rights that cannot be waived or public policy).

Usually, parties to arbitration will agree to resolve their disputes according to the Arbitration Regulation of the Conciliation and Arbitration Centre, the International Court of Arbitration for Mercosur, the Uruguayan Stock Exchange, or even submit their disputes to the courts. In complex commercial agreements, parties may resort to international arbitral institutions such as the International Chamber of Commerce.

Uruguay is signatory to a number of international treaties regarding arbitration and enforcement of arbitral awards. In the absence of a treaty, the rules of enforcement of foreign judgments also apply to foreign arbitral awards (the procedure for recognition and enforcement can take between 12 and 18 months). Further, Uruguay is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).


Uruguay must continue to prioritise its stable rule of law and investment promotion regime and focus on identifying and promoting the opportunities it has to offer to foreign investors.

Construction of infrastructure (improvement of roads in particular) is needed to accompany economic growth and the development that various industries are experiencing. This is reflected in UPM's request for the country's railway system (which is practically non-existent) to be updated and the subsequent call for bids for the Central Railway Project. The PPP Law is finally being used by the government to foster infrastructure projects.

The national policies on large-scale mining will have to be clearly stated and the LSM Law should be correctly regulated.

Acknowledging the growth that the renewable energy industry is experiencing, regulations should be passed so that Law No. 18,362 on wind farm easements can be applied, and legislation should be drafted to address the wake effect (i.e., the disturbance of the flow of wind inside a wind farm).


1 Beatriz Spiess is a partner and Federico Piano is a senior associate at Guyer & Regules.

2 Multilateral Investment Guarantee Agency guarantees have been granted in the past.