Uruguay ranks among the top countries in Latin America in the main rankings that gather information on aspects of political stability and democratic soundness. These indicators show that Uruguay is a country with a strong democratic tradition, based on transparent government policy and broad economic freedom. In the last few years, Uruguay has positioned itself as a trustworthy and attractive destination for foreign investors, due to its favorable investment climate and promising macroeconomic performance. Its strategic location and international treaties make the country ideal for the development of a regional hub With Mercosur and the Free Trade Agreement between Mexico and Uruguay, there is access to a market of 400 million people, which gathers together 76% of Latin America’s GDP and a foreign trade flow of almost 80% of the total flow in Latin America.
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About Uruguay - Embassy of Uruguay in India
Welcome to Uruguay
About Uruguay
Human Resources in Uruguay are highly talented and competitive due to a combination of several factors, including high quality of basic, technical and university training, flexibility and ease of Uruguayan workers to adapt to new production processes or technologies.
Montevideo offers the best quality of life in Latin America (according to Mercer Index 2014). This also includes the rest of the country, making Uruguay the Best Place to live in (Future Brand Index). This is one of its distinguishing, worth mentioning features: it is an amiable country to live, work and invest in.
Economic Performance and Structure
The Uruguayan economy is small and open, with a growing projection towards the regional and international external market, where exports play an important role for local productive development. The sector with the largest participation in GDP is the services sector, within which trade, transportation and communications, financial services, insurance, real estate and other corporate services stand out.
The agricultural supply represents 8% of GDP, however, this activity contributes to the economy in many ways, because it provides most of the raw materials for the manufacturing industry, accounting for 75% of the country’s exports. Uruguay has achieved sustained economic growth, with an average growth rate of GDP per year between 2005 and 2014 of 5.3%. In July 2013, the World Bank ranked Uruguay as a high income country with a gross national income per capita of USD 13,580. Macroeconomic stability and a strong institutional framework, with a set of clear rules for investors, coupled with an attractive promotional regime drive the productive investment momentum in recent years.
Investment, measured in gross fixed capital formation (GFCF) is growing steadily and at record speeds, except for 2009 (year of the international crisis). Over the past years the country has been receiving an important flow of direct foreign investment in several sectors of activity.
On the other hand, prices show a stable behavior with one-digit inflation rates. Inflation’s trend is expected to continue as a result of an inflation target control policy adopted by the Central Bank of Uruguay in 2004. The deepening of the process of economic liberalization led to a steady growth of foreign trade, both in goods and services, reaching record levels in recent years. The main export products are soy, bovine meat, cellulose, dairy products and other agricultural based-products; while tourism, global services and logistics are the main exported services given the geographically strategic position of Uruguay in the region. Due to the policy of seeking new markets, undertaken both by private and public stakeholders, aimed at placing goods outside the region, export destinations have diversified, thus achieving less dependence on few markets.
The agricultural supply represents 8% of GDP, however, this activity contributes to the economy in many ways, because it provides most of the raw materials for the manufacturing industry, accounting for 75% of the country’s exports. Uruguay has achieved sustained economic growth, with an average growth rate of GDP per year between 2005 and 2014 of 5.3%. In July 2013, the World Bank ranked Uruguay as a high income country with a gross national income per capita of USD 13,580. Macroeconomic stability and a strong institutional framework, with a set of clear rules for investors, coupled with an attractive promotional regime drive the productive investment momentum in recent years.
Investment, measured in gross fixed capital formation (GFCF) is growing steadily and at record speeds, except for 2009 (year of the international crisis). Over the past years the country has been receiving an important flow of direct foreign investment in several sectors of activity.
On the other hand, prices show a stable behavior with one-digit inflation rates. Inflation’s trend is expected to continue as a result of an inflation target control policy adopted by the Central Bank of Uruguay in 2004. The deepening of the process of economic liberalization led to a steady growth of foreign trade, both in goods and services, reaching record levels in recent years. The main export products are soy, bovine meat, cellulose, dairy products and other agricultural based-products; while tourism, global services and logistics are the main exported services given the geographically strategic position of Uruguay in the region. Due to the policy of seeking new markets, undertaken both by private and public stakeholders, aimed at placing goods outside the region, export destinations have diversified, thus achieving less dependence on few markets.
Clear Rules And Trade Policy
The Uruguayan political system has three major political parties which have taken turns in government and no major changes in general economic principles have occurred. Another special characteristic of the country is that there is strong respect for clarity and transparency in contract observance. This is regarded by investors as a distinguishing feature when it comes to choosing Uruguay as a mainstay for trust generation in business environment. According to the 2014 Corruption Perceptions Index prepared by Transparency International, Uruguay ranks 23st among 180 countries and is in 1st place in Latin America and Caribbean, as a reliable country.
Uruguay makes no distinction between the treatment of national and foreign capital, and incentives to investment promotion are available for both. There are no limits for foreign capital endowment in companies either. Foreign investors may carry out any type of activity under the same conditions as local investors. In certain sectors of activity foreign investors can perform activities under a public works concession regime by reason of State’s special regulations.
There are no limits to the transfer of income or capital repatriation and no previous permits are required. The exchange market is free, with no restrictions for the purchase or sale of foreign exchange and investments may be made in any currency. Uruguay has international standards applicable to intellectual property in place. Copyright, trademark and patent protection is legally provided for, with the country being regarded as having the second largest protection of intellectual property in South America according to The Global Competitiveness Report 2014-2015, World Economic Forum.
Uruguay offers free movement of capital, foreign currency and gold from and to other countries and a free convertibility exchange system for national currency. It is important to highlight that MERCOSUR offers to existing companies and those starting operations in Uruguay access to a market of 276 million people, with a GDP of USD 3.3 billions, i.e. fifth world economy. Uruguay is located in a privileged area within MERCOSUR since it is in the center of the most populated area with the highest income level. Within a radius of 1,500 km from Uruguay, 90 million inhabitants are concentrated in large industrial and agricultural development areas.
Foreign investors may operate in the country by organizing a Corporation (S.A.) – corporate type most frequently used, and they can even hold 100% of their share capital. They can also operate through the organization of a Limited Liability Company (S.R.L.) or other types of personal companies made up of partners who may be national or foreign, natural or legal persons 1. Foreign investors may also choose to operate in the country through a foreign company branch. Tax treatment of the different corporate vehicles differs in several aspects, whereby it is convenient to have anticipated planning for the purposes of choosing the corporate type to be adopted. Uruguay has traditionally provided a security framework to foreign investors due to the effective law enforcement and economic stability. Besides, it is member of international organizations which foster investment security, such as the Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes, headquartered in the World Bank. Moreover, Uruguay has concluded agreements for the promotion and reciprocal protection of capital investments with several countries.
Foreign investors can set up their business in Uruguay without prerequisites, special State permits, or the need for a local partner. Also, no discrimination exists in the country on foreign capital treatment, so you can access all benefits and incentives to promote investment intended for domestic firms. In turn, the financial market is completely free, allowing the free sale and purchase of foreign currency, and the inflow or outflow of foreign exchange, capital, profits, dividends and interest without restrictions or need for authorization. There is only one tax system for the entire country.
Uruguay makes no distinction between the treatment of national and foreign capital, and incentives to investment promotion are available for both. There are no limits for foreign capital endowment in companies either. Foreign investors may carry out any type of activity under the same conditions as local investors. In certain sectors of activity foreign investors can perform activities under a public works concession regime by reason of State’s special regulations.
There are no limits to the transfer of income or capital repatriation and no previous permits are required. The exchange market is free, with no restrictions for the purchase or sale of foreign exchange and investments may be made in any currency. Uruguay has international standards applicable to intellectual property in place. Copyright, trademark and patent protection is legally provided for, with the country being regarded as having the second largest protection of intellectual property in South America according to The Global Competitiveness Report 2014-2015, World Economic Forum.
Uruguay offers free movement of capital, foreign currency and gold from and to other countries and a free convertibility exchange system for national currency. It is important to highlight that MERCOSUR offers to existing companies and those starting operations in Uruguay access to a market of 276 million people, with a GDP of USD 3.3 billions, i.e. fifth world economy. Uruguay is located in a privileged area within MERCOSUR since it is in the center of the most populated area with the highest income level. Within a radius of 1,500 km from Uruguay, 90 million inhabitants are concentrated in large industrial and agricultural development areas.
Foreign investors may operate in the country by organizing a Corporation (S.A.) – corporate type most frequently used, and they can even hold 100% of their share capital. They can also operate through the organization of a Limited Liability Company (S.R.L.) or other types of personal companies made up of partners who may be national or foreign, natural or legal persons 1. Foreign investors may also choose to operate in the country through a foreign company branch. Tax treatment of the different corporate vehicles differs in several aspects, whereby it is convenient to have anticipated planning for the purposes of choosing the corporate type to be adopted. Uruguay has traditionally provided a security framework to foreign investors due to the effective law enforcement and economic stability. Besides, it is member of international organizations which foster investment security, such as the Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes, headquartered in the World Bank. Moreover, Uruguay has concluded agreements for the promotion and reciprocal protection of capital investments with several countries.
Foreign investors can set up their business in Uruguay without prerequisites, special State permits, or the need for a local partner. Also, no discrimination exists in the country on foreign capital treatment, so you can access all benefits and incentives to promote investment intended for domestic firms. In turn, the financial market is completely free, allowing the free sale and purchase of foreign currency, and the inflow or outflow of foreign exchange, capital, profits, dividends and interest without restrictions or need for authorization. There is only one tax system for the entire country.
Indian Investments in Uruguay
Many Indian Companies trust Uruguay: TCS India has established a Global Delivery Centre in Montevideo employing 800 local staff besides hundreds of Indian workers. This was the first IT Centre opened by TCS in Latin America in 2002.Indian IT company Geodesic Ltd acquired a Uruguayan software company in Montevideo in May 2009. The Uruguayan company has a staff of 40 persons and specializes in Instant Messaging solutions and applications for mobile phones and companies. Arcelor Mittal has acquired (Dec 2007) a Uruguayan stainless steel tube producer CINTER S.A., with sales of US $ 47 million employing about 200 people. A consortium of Indian vegetable oil companies is exploring opportunities for investment in agribusiness in Uruguay. Olam, a NRI company based out of Singapore has acquired a Dairy farm in Uruguay for over 150 million dollars. Olam has also started rice farming in Uruguay. Other Indian companies have shown interest in investment in pharma and agri-business sectors. A number of Indian companies, including Reliance and Sakti pumps, use the bonded warehouse facilities of ‘GrupoRas’, which is keen to provide the facility to other Indian companies as well as marketing support.