Strategic commercial point
Uruguay is located in South America on the Atlantic coast and shares borders with Argentina to the West and Brazil to the Northeast, the two largest nations in the region. This location facilitates access to large industrial and business centers in the area, as well as to the member countries of Mercosur.
This country has strategically located along the Atlantic Ocean and the Paraguay-Paraná waterway, ports and waterway facilities that facilitate access to strategic economic points both on the sea coast and inland.
Another attractive aspect of Uruguay is its high economic freedom in the movement of capital, currency and gold inside and outside the nation, as well as an exchange system of free convertibility to the national currency. This is accompanied by an extensive infrastructure network that allows access to all of Latin America and the world. Its location, infrastructure and natural conditions position this nation as a strategic place for the main commercial and industrial centers of the region.
According to the Uruguay XXI Agency, the agency responsible for the promotion of exports, investments and image, this nation has been standing out for several years for its good macroeconomic performance, its political stability and its high standards of democracy among Latin American countries. Thanks to this positive environment, Uruguay has positioned itself on the radar of important foreign investors as a profitable and reliable destination.
These investors highlight the equal treatment that the government grants them compared to national citizens, since they are not required to have prior permits or authorizations to participate in the business sector, thus allowing the companies to be 100% foreign. They also benefit from free financial markets, without restrictions, taxes on the repatriation of profits, capital, dividends, or interest, or limitations on the exchange of currencies or strict regulations on the foreign exchange market.
It should also be noted that the country has become a regional hub due to its current international agreements, such as MERCOSUR and the FTA with Mexico, which have allowed it to access a market of approximately 400 million people, accumulating 76% of GDP. of Latin America and represents a foreign trade exchange of 80% of Latin America.
Although small, the Uruguayan economy is characterized by its support for regional and international trade, where exports are vital for the productive development of the country. For example, the services sector that has an important participation in the Domestic Product of the Country (GDP) and among which transportation, commerce, communications, financial services, among others, stand out.
Thanks to the sustained growth of the Uruguayan economy in the last decade, accompanied by its broad economic freedom and a high degree of transparency, it allows investors to benefit from an institutional framework that establishes clear rules to execute trustworthy businesses and ventures in the region.
This confidence that the country has earned in international markets has also been achieved due to its free trade structure. In fact, the country has a privileged location compared to Latin American countries in this regard, which has earned it the recognition of important international institutions such as the Economist Intelligence Democracy Index Unit, Legatum Prosperity Index Institute and Heritage Monetary and Economic Freedom Foundation.
Due to the foregoing, the nation has received important flows of foreign direct investment capital, which deepened the strengthening of foreign trade in both goods and services. Within exports, the most benefited sectors are agro-industrial production in meat, soybeans, dairy products and logistics services.
Given the Uruguayan regime of freedom, the Government has concentrated on the search for new markets, either by public or private initiative, to export its products abroad and diversify the destinations of its exports.
Nerve point of entry to the MERCOSUR economies
Within the economies of Latin America, the Uruguayan was the first to make the great leap to open international trade and without any restrictions, that is how in 1991 it signed a treaty with Argentina, Brazil and Paraguay that gave life to the Common Market of the South, better known as MERCOSUR, which boosted the economy of Uruguay and allowed it to achieve a successful integration process.
Through this agreement, the free movement of goods, services and products was established among the signatory members, who established by mutual agreement the eradication of tariff and non-tariff barriers. For example, the Common External Tariff (AEC), classifies, identifies and establishes a value for all products or merchandise that must be paid when entering Mercosur, which is determined in a percentage that ranges from 0% to 20%.
This agreement allowed Uruguay to achieve great growth, since with the arrival of Foreign Direct Investment (FDI), the nation positioned itself among the most attractive in South America for foreign investors. Additionally, thanks to its strategic geographic location in the center of the area with the highest population and income level, companies established in this nation will have access to a market of more than 270 million people. Also all the organizations that wish to distribute their products to the region benefit from its strategic location, a free trade regime and an effective infrastructure for the storage of goods for later distribution. In addition, Uruguay's road network is one of the most developed in Latin America.
Free trade zone
According to the Ministry of Economy and Finance of Uruguay, his country has become a commercial epicenter for the creation or relocation of companies thanks to its legislation with fiscal regimes and favorable free zones in these processes and where local companies are allowed to be 100% foreign owned and can be formed with a single shareholder.
This is how the Uruguayan nation consolidated a regime of 11 free zones in its national territory, specialized in a wide variety of areas such as commerce, industries or services, where the main activities are:
- The commercialization, deposit, storage, conditioning, selection, assembly, disassembly, mixing of goods or raw materials that come from abroad or from the nation.
- The installation and operation of machinery and manufacturing equipment.
- The use of the network of financial services, information technology, human resources and repair and maintenance equipment in dispensable in the execution of the operation processes.
These special areas will allow legal entities to settle there as users and operate without paying the national tax, since they are exempt from income tax, VAT, wealth tax, internal specific tax and control tax on corporations. The eleven free zones in force in this country are:
- Punta Pereira Free Zone
- WTC Free Zone
- Swiss Colony Free Zone
- Aguada Park
- New Palmira Free Zone
- Science Park
- Florida Free Zone
- Freedom Free Zone
- UPM Fray Bentos
- Colonia Free Zone
Solid and agile banking system
According to the Uruguay XXI agency, in charge of promoting investments, exports and the country's image, this sector is characterized by its solidity, great liquidity capacity and excellent high-quality credit portfolios. This, together with a favorable and attractive legal environment for the main international banks, positions the banking system of this country as agile and competent, which has earned it recognition as one of the most important financial centers for doing business in Latin America.
Thanks to the fact that there are no limitations on the outflow or inflow of capital, nor is there exchange control on operations in foreign currency, foreign investors feel safe and supported to operate in this nation.
Another attractive aspect of Uruguay is its long and stable tradition of banking discretion. The information protected by banking privacy laws can only be disclosed with the authorization of the interested party, by resolution of a court, or by request of the Central Bank of Uruguay.
Freedom and political stability
According to the World Bank, Uruguay stands out within Latin America as an egalitarian society that has a high per capita income and minimal levels of inequality and poverty. Its middle class, in addition to being the largest in the region, represents more than 60% of its population.
According to the international organization, Uruguay has a mature democracy, strong institutions, good governance and a high degree of social cohesion, accompanied by a high per capita income and relatively low rates of poverty, inequality and informality.
After the implementation of the reforms after the 2002 crisis, macroeconomic policy practices were improved, economic and financial exposure to neighboring countries was reduced, and new social policies were implemented that promoted Uruguay's resilience. Based on a clear legal and economic framework, promoted by the Government, a great advance was achieved in international inclusion, becoming one of the safest destinations for foreign investment. The Political Stability Index Report, published by the Economic Intelligence Unit, which evaluates indicators of economic difficulty and underlying vulnerability due to political instability, ranks Uruguay as the 50th country among the "Less Vulnerable" in the world, and as the least vulnerable in South America.
According to the previous year's Corruption Perceptions Index, Uruguay ranks second in the Americas after Canada and is first among Latin American countries in terms of transparency among 180 countries. The country's high levels of transparency and low levels of corruption make it a leader among Latin American countries, with transparency standards similar to those of developed countries.
Extensive preparation of human talent
With a population close to four million inhabitants, where 92.5% live in urban areas and 37% live in the capital Montevideo. Citizens have a high quality of life, enjoy access to basic public services, health and telecommunications.
The Uruguayan workforce is highly competitive due to a combination of high-quality basic, technical and university training and the flexibility with which locals adapt to new technologies and changing business and production environments.
With a literacy rate of 98.1%, Uruguay is one of the two highest rated countries in the region, where 1 in 3 workers has a technical or university degree. According to the Human Development Report published by the United Nations, Uruguay maintains a high level of human development, qualifying it as the 55th country in the world, and the third in Latin America, in relation to quality of life in general. In the region, Chile and Argentina are the only countries that qualify with a very high level, while Uruguay leads the group of high level countries.