2. 2
Uruguay: LatAm’s Best-Kept Secret
• Strongest democracy and social and political stability
in Latin America
• Continued growth and investment despite global
slump
• Best labor value for money in the region
• Highest internet and PC penetration in Latin America
• New law to make investment even more attractive
3. 3
Gateway to the Region
Rio de Janeiro
Asunción 2400km/1490mi
1550km/960mi 72-96 hrs Uruguay:
72-96 hrs
A safe, reliable and
São Paulo
Santiago
1970km/1225mi competitive location,
72-96 hrs
1900km/1180mi providing an unbeatable
72-92 hrs Porto Alegre
870km/540mi
logistics base in the heart
Buenos Aires 24-48 hrs of the wealthiest region of
250km/155mi
24 hrs Montevideo South America
4. 4
Access to a Large and Wealthy Market
Access to a large and growing consumer market due to our
membership in MERCOSUR and our open economy
Uruguay MERCOSUR
Population (millions) 3.3 242
Area (km2) 176,215 11,878,244
GDP 2009 (US$ billions) 31.6 2,144
GDP per capita 2009 (US$) 9,458 8,859
GDP growth rate 2009 (%) 2.9 0
Sources: Central banks and national statistics institutes
5. 5
Political and Social Stability
Factor Uruguay in South America
Low Corruption
(Transparency International 2010)
2
Democracy Index
(The Economist Intelligence Unit 2010)
1
Economic Freedom Index
(Heritage Foundation 2010)
2
Quality of Living
(Mercer Eco-City Ranking 2010)
1
Low Cost of Living
(Mercer Cost of Living City Ranking 2010)
4
6. 6
Political and Social Stability
Low Corruption Democracy Index Economic Freedom Index
(Transparency International 2010) (Economist Intelligence Unit 2010) (Heritage Foundation 2010)
New Zealand 1 Norway 1 New Zealand 4
Norway 10 New Zealand 5 Ireland 5
Ireland 14 Ireland 12 US 8
Chile 21 US 17 Chile 10
US 22 Spain 18 South Korea 31
Uruguay 24 South Korea 20 Uruguay 33
France 25 Uruguay 21 Spain 36
Spain 30 Costa Rica 24 Norway 37
Portugal 32 Portugal 26 Costa Rica 54
South Korea 39 Italy 29 Colombia 58
Costa Rica 41 South Africa 30 Portugal 62
South Africa 54 France 31 France 64
Italy 67 Chile 34 South Africa 72
Brazil 69 Brazil 47 Italy 74
Colombia 78 Argentina 51 Brazil 113
Argentina 105 Colombia 57 Argentina 135
7. 7
A Strong Economy
Estimated GDP growth in 2010
GDP growth in constant values
China 10.5%
Cumulative Annual Growth Rate (2004–2009): 6.1%
India 9.7%
10%
8.9% Uruguay 8.5%
9% 8.5% Peru 8.3%
8% 7.5% 7.6% Argentina 7.5%
7% Brazil 7.5%
6% Mexico 5.0%
5.0%
5% 4.6% Chile 5.0%
4% Russia 4.0%
2.9% Germany 3.3%
3%
2% Japan 2.8%
1%
USA 2.6%
Eurozone 1.7%
0%
2004 2005 2006 2007 2008 2009 2010 E
0% 5% 10% 15%
Sources: Central Bank of Uruguay ; 2010 E: IMF, World Economic Outlook,
October 2010 Source: FMI, World Economic Outlook, October 2010
8. 8
Booming Foreign Direct Investment
Uruguay’s FDI flows FDI in South America
(US$ millions) (2009, % of GDP)
FDI increased considerably in 2002–2009
2500 Uruguay 4.0%
1840
Chile 3.8%
2000
1493
Peru 3.5%
1330
1267
1500 Brazil 1.6%
847
1000 Colombia 1.5%
416
Ecuador 1.2%
332
500
194
Argentina 1.1%
0
2002 2003 2004 2005 2006 2007 2008 2009 0% 2% 4% 6%
Source: Economic Commission for Latin America and the Caribbean Source: ECLAC
(ECLAC)
9. 9
Strong Growth in Exports
Uruguayan Exports
(US$, millions)
Goods and Services
Exports have tripled in the past 6 years (2009, % of total exports)
9000
8000 Services
7000 Goods
6000 Services
25%
5000
4000 Goods
3000 75%
2000
1000
0
Source: BCU and TradeMap.2005 in2006 millions 2008 2009
2002 2003 2004 Data USD 2007
Sources: BCU and TradeMap
Sources: Central Bank of Uruguay (BCU) and TradeMap
10. 10
Main Destinations of Goods Exports
2009
Central America
Africa
and the
5%
North America Caribbean
7% 2%
Rest of Europe MERCOSUR
7% 32%
Rest of South
America
13%
European Union Asia
15% 19%
Source: National Customs Administration
11. 11
Export Break-Out
Main products and services (2009)
Other 34%
Goods Services
Leather 3%
Fish 3%
Automobiles, Auto Other Meat Financial
parts 2% 34% 20% services Other
Pharmaceuticals 2% 2%
4%
Fats, Oils 2% IT
Livestock 2% Other 8%
Fruits 2%
company
Rest 19% Cereals, services
Rice 9%
14%
Wool tops
3% Transport
Oil, 16% Tourism
Milling
Soybeans 61%
products,
Malt Plastics Wood Dairy and Seeds
8%
3% 3% products, products
Cellulose 7%
6%
Sources: Central Bank of Uruguay (BCU) and Trademap; Uruguay XXI’s calculations
12. 12
Platform for the Region
Movement of containerized cargo in the port of Montevideo
800
675
700
596
588
Thousands of units
519
600
455
425
500
402
353
351
334
400
309
293
273
259
300
210
191
200
100
0
2002 2003 2004 2005 2006 2007 2008 2009
Containers TEUS
Source: National Ports Authority (ANP)
Note: Includes imports, exports, transit and transfer
Goods in transit:
2008: 50.5% – 2009: 47.3%
13. 13
Quality of electricity
Modern Infrastructure US
supply (ranking)
23
• World-class port facilities in Montevideo, a regional Ireland 25
hub par excellence for South America’s Southern Chile 30
Cone region Spain 36
Uruguay 37
• Boasts Latin America’s most dense highway network Hungary 46
• 2009: new airport terminal, Colonia ferry port and Italy 47
New Zealand 56
Montevideo ring road
Brazil 63
• Reliable electric supply (mostly from renewable Argentina 93
sources) Source: World Economic Forum’s
Global Competitiveness Report
2010-2011
14. 14
Highest Ranked in LatAm in Use of Modern
Communications
Mobile telephone Fixed telephone Internet access
Internet users
subscribers lines in schools
Rank Rank Rank Rank
Argentina 25 Costa Rica 38 Uruguay 41 Uruguay 26
Uruguay 44 Uruguay 48 Colombia 47 Chile 42
Chile 64 Argentina 53 Brazil 57 Costa Rica 64
Colombia 74 Brazil 62 Costa Rica 66 Brazil 72
Brazil 76 Chile 63 Chile 68 Colombia 88
Mexico 93 Mexico 72 Argentina 74 Mexico 89
Costa Rica 119 Colombia 77 Mexico 85 Argentina 111
Source: World Economic Forum’s Global Competitiveness Report 2010-2011
15. 15
One Laptop Per Child (Plan Ceibal)
Helping our future workforce eliminate the technology gap
• Only country in world to meet goal of full countrywide
coverage of school-age children and teachers
• Students covered: 380,000
• Teachers trained: 18,000
• Total free Wi-Fi spots in Montevideo: 250
• Thanks to the plan, 220,000 households (out of 1,280,000)
received their first computer; half of them belong to the
poorest 20% of the population
16. 16
Quality of Life Global Peace Index
(ranking)
New Zealand 1
• Free from natural disasters
Ireland 6
• Tolerant country: no ethnic, racial or religious conflicts Uruguay 24
• Excellent sanitary level. Child mortality rate: 9.5 every 1,000 Spain 25
(2009), vs. 22.8 in Latin America (2007) Chile 28
• Third safest country in Latin America, evidenced by the Italy 40
booming second home market (Latin Business Chronicle 2009 Argentina 71
Index)
Brazil 83
• Ranked among the first countries, with the Scandinavian
US 85
countries and Japan, in US-based Freedom House’s Freedom in
Source: Economist Intelligence
the World Survey 2009 Unit 2010
17. 17
Tourism and Entertainment
• Uruguay is the champion in tourism in LatAm according
to Latin Business Chronicle's Latin Tourism 2010 Index
• Over 2 million tourists per year (≈60% of the population)
• Tourism represents over 6% of GDP
• Four Seasons, Conrad, Radisson, Sheraton operate in
Uruguay
• Continued investments: - Setai Group, US (US$ 80 M)
- Sofitel, France (US$ 63 M)
- Fasano, Brazil (US$ 50 M)
- Pestana, Portugal (US$ 15 M)
• US$ 1.5 billion were invested in tourism-related real
estate over the last 5 years
18. 18
Labor: Best Value For Money
Tertiary education Adult literacy rate
• State provides free education enrollment (ranking) (%)
through college and invests 4.5% US 6 Ireland 99.0
of the GDP in education Spain 17 Switzerland 99.0
• 100% of 15 year-old high school Argentina 19 UK 99.0
students have finished at least 3 Uruguay 24 US 99.0
years of English and 2 of Ireland 33 Uruguay 97.9
computer science UK 35 Spain 97.9
• 21% of university students study Chile 43 Argentina 97.6
accounting, finance or business Switzerland 48 Chile 96.5
administration Brazil 65 Brazil 90.0
• 17% of university students study
Source: World Economic Forum’s
Global Competitiveness Report
2010-2011
Source: United Nation’s Human
Development Report 2009
science and technology
19. 19
Labor: Best Value for Money
Total annual costs for the company in Uruguay (US$):
Junior Production CFO/ Finance Sales
Seamstress IT Manager HR Manager CEO
Mechanic Manager Director Manager
6,600 12,200 84,339 88,938 103,037 104,464 109,988 185,707
Source: Uruguay XXI based on data from Wages Councils and remuneration polls by PwC, as at March 31, 2010
Net annual salary costs comparison:
300 285 CEO
CFO/ Finance Director
250 242
232 IT Manager
200
147
150 131 130
120 118
106 104 102 104 107 100 100 100
94 98
100
50
0
Brazil Chile Argentina Colombia Costa Rica Uruguay
Source: Uruguay XXI based on data from PwC. Base: Uruguay = 100
20. 20
Beneficial Promotion Systems
Comprehensive legal framework for investment
• The government recognizes the important role of the FDI and maintains
a favorable investment climate
• Uruguay has a track record of attracting large investments in agricultural,
industrial, services and infrastructure
• Investment Law (Nº 16,906) - January 1998:
Domestic and foreign investors are treated equally
Foreign investments do not require prior authorization or registration
Free transferability of capital and profits overseas
• In 2008 the government created a one-stop shop to assist investors and an
automatic, predictable, transparent and effective mechanism that benefits a
broader base of firms and specifies objective criteria for granting incentives
21. 21
Beneficial Promotion Systems
Tax benefits
• Exemption from Corporate Income Tax* for up to 100% of the amount
invested and for a period of up to 25 years, which depend on a matrix of
targets and indicators, and the size of the project.
Indicators
o Employment creation
o Territorial decentralization
o Export growth
o Increased added value
o Increased research, development and innovation
o Use of clean technologies
o Impact of the project on the national economy
* Corporate Income Tax exists only at the national level (25%)
22. 22
Income Tax Exemption Depends on
the Size of the Investment:
Project size Project size* Maximum % of investment Maximum period
(denomination) (in US$ millions) to be deducted from taxes (years)
Small Up to 0.3 60 5
Medium S1 Up to 1.3 70 15
Medium S2 Up to 6.7 80 20
Large S1 Up to 13 90 25
Large S2 Up to 48 90 25
Large S3 Up to 670 100 25
Very Large More than 670 100 25
* Approximate amounts; ranges depend on the value of the UI (indexed unit)
23. 23
Beneficial Promotion Systems
Other tax benefits
• Exemption of Wealth Tax on civil works, for 8 years in Montevideo
and for 10 years in other regions, and on fixed assets throughout
their life.
• Exemption of import taxes and fees on fixed assets declared non-
competitive with the domestic industry.
• 100% refund of VAT, under the exporters regime, on the acquisition
of materials and services for civil works in the domestic market.
24. 24
Temporary Admission
(similar to the drawback regime)
Temporary Admission is the tax-free introduction of foreign
goods to the domestic market from outside the national
customs territory, with a specific purpose other than
consumption, to be exported, within 18 months, in the state in
which they were introduced or after having been subject to
certain processing, manufacturing, repairing or value added
processes, with effective occupation of labor. The Temporary
Admission regime also applies to machinery and equipment
from any source, entering temporarily for maintenance, repair
or upgrade.
25. 25
Free Trade Zones
• Users 100% exempt from:
• Corporate Income Tax
• Wealth Tax
• Import levies
• Any other tax created or to be created in the future*
• Can develop industrial, commercial or service activities
• Technology and service-oriented business parks operating
as FTZs in Montevideo:
• Aguada Park
• Zonamerica
• Parque de las Ciencias (2011)
• World Trade Center Free Zone (2011)
*Companies within the FTZs must pay social security contributions for their Uruguayan
employees.
26. 26
Free Ports and Free Airports
• Only free ports on South America’s Atlantic coast
• Free transit of goods, no authorizations or formal procedures
are required
• Within port facilities, goods are exempt from:
o all import taxes or charges
o all domestic taxes (e.g. VAT)
• Services rendered are exempt from VAT
• Foreign registered companies are exempt from wealth tax
and income tax
• Diverse operations may be performed on the merchandise,
including warehousing, repackaging, relabeling, classification,
grouping, ungrouping, consolidation, deconsolidation,
manipulation or fractioning as well as value adding tasks that
do not modify the nature of the product
29. 29
In Summary
These are exciting times for Uruguay:
• Our economy is growing
• We top many Latin American rankings
• Investments are pouring in
• We are carrying out many innovative programs
Do business with us!
