Why Uruguay attracts investors?


In recent years, they represented 3% of GDP above the regional average. Argentina has remained the second investor with a participation of around 15%. Doubling the participation of countries such as Brazil and the United States. It is expected that this situation will continue or be strengthened by the great interest of Argentines in Uruguay.

What aspects are highlighted by investors and businessmen when they are interested in Uruguay?

The first thing to say is that there are no magic recipes or invulnerabilities. Uruguay has managed to preserve some level of stability. A more turbulent global environment thanks to its macroeconomic strength, prudent policies, export diversification, strong banking sector, and ample reserves. This is added to the legal stability and the low level of corruption. Uruguay according to the latest International Transparency Ranking, continues to be the leader in Latin America. The geostrategic position of Uruguay, its infrastructure and its fiscal regime have allowed it to position. Itself as a Hub of goods and services for the region, attracting companies. That do not think of a market of just over 3 million but of the Southern Cone of 300 million.

Uruguay during 2020 has added new benefits to a fiscal policy already traditionally focused on attracting investments. For example, the “tax holidays” were extended to new tax residents instead of five to ten years.

What is this structure based on to attract investment?

This structure is based on 5 pillars.

1-In the first place. The ease of doing business that implies equal treatment for foreigners and locals. Without limits for endowment of foreign capital in companies or for repatriation of capital. A single tax system for the entire country and free exchange market.

2-The law of free ports that allows the free transit of goods without requirements or formal procedures.

3-The law of Free Zones where the payment of all taxes is exempted to carry out tasks of industrialization, logistics and services with important differentials versus other regimes in the region.

4-The Temporary Admission Law that allows companies to import raw materials and supplies without paying import taxes to produce goods to be exported.

5-Finally, there is the Investment Law that allows the presentation of projects to obtain tax reduction.

This combination of factors predicts greater strength for Uruguay against. The investors seeking value chains that are more protected from the impact of the pandemic.

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