2. 2
Why invest in Uruguay?
1. Political and social stability
2. Macroeconomic strength
3. Strategic location and modern
infrastructure
4. Favorable business environment
3. 3
Uruguay has a privileged geographical
Strategic location and modern infrastructure
location…
Uruguay
A strategic location, with the best
connections to establish a
logistics base in the heart of the
richest region in the continent
4. 4
…with free access to a large market:
Strategic location and modern infrastructure
MERCOSUR
Indicators Uruguay MERCOSUR
Access to an increasing Population (million) 3.4 241
and large consumer
market due to our open Area (sq km thousands) 176.2 11,878
economy and our GDP 2011
46.7 2,991
integration to the (US$, billion)
MERCOSUR
GDP per capita 2011 (US$) 13,861 12,400
GDP growth rate
5.7% 3.7%
2011 (%)
Source: Uruguay XXI based on data provided by Central Banks and National Statistics Institutes
5. 5
Social and political stability
Uruguay in South Uruguay in the
Ranking
America World
Transparency of government policymaking
Social and political stability
2 20
(World Economic Forum 2012)
Democracy Index
1 17
(The Economist Intelligence Unit 2011)
Economic Freedom
2 29
(Heritage Foundation 2012)
Political Stability
1 49
(World Bank [WGI] 2010)
Index of political and economic transformation
1 4
(Bertelsmann Foundation 2012)
Global Peace Index
1 21
(Institute for Economics & Peace 2011)
Business Climate Index
1 --
(Getulio Vargas Foundation & IFO 2012)
Quality of Living
1 77
(Mercer Quality of Living City Ranking 2011)
6. 6
Uruguay’s sustainable growth
Uruguayan GDP (annual growth %)
8.9%
7.5%%
7.2%
Macroeconomic strength
6.5%
5.7%
Between 2005 and 2011
4.1% 4.0%
the average annual
2.4% growth rate was of 6%
2005 2006 2007 2008 2009 2010 2011 2012J
Uruguayan GDP per capita (PPP) US$
19,362
18,360
17,409
16,527
15,714
14,672
11,996
9,351 9,364
7,191
5,981
5,263
2005 2006 2007 2008 2009 2010 2011 2012J 2013J 2014J 2015J 2016J
Source: Uruguay XXI based on data provided by the Central Bank of Uruguay and the IMF (WEO September 2011)
7. 7
A country that generates and attracts more investment
FDI in South America (% of GDP - 2011)
7.1%
5.4%
4.1%% 4.1% 4.3%
2.4%
Macroeconomic strength
1.2%
Argentina Paraguay Colombia Brazil Peru Uruguay Chile
FDI in Uruguay
US$ million Leading sources and recipient sectors of FDI
3000 FDI/GDP (%) 10% 2001-2009
2500 FDI FLow FDI/GDP 23%
8%
Cattle raising,
agriculture and Construction
forestry 23%
2000 9% 25%
6%
1500 Manufacturing Financial
6% industry brokerage
12% 9%
4%
1000 5%
Trading
2% 5%
500 3%
0 0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Uruguay XXI based on data provided by Central Banks
8. 8
…with increasing exports…
14000
Exports of goods and services
12000 (US$ million)
Bienes Servicios
10000
8000
Macroeconomic strength
6000
4000
2000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Exports of goods Exports of services
Other Meat Financial
21% 17% Other Other
services
company 3%
4%
services
Milling Soy 5%
products 10%
3% IT
5%
Fur, 3%
Wool, 3% Wood pulp
10%
Plastics, 3%
Logistics
Wood 19% Tourism
products 64%
Cereals
4%
10%
Automobiles Dairy
Auto parts products
6% 9%
Source: Uruguay XXI based on data provided by the DNA and BCU (Balance of Payments)
9. 9
…and increasing access to more markets
Macroeconomic strength
10. 10
Modern infrastructure
Strategic location and modern infrastructure
• World-class port facilities in Montevideo, an excellent regional hub for the
Southern Cone
• Uruguay has the most concentrated road network in Latin America
• New airport, new ring road in Montevideo and a new ferry port in Colonia
• Reliable electricity supply (mostly from renewable resources)
Quality of Electricity Supply (ranking)
New
USA Spain Uruguay Hungary Chile Italy Brazil Argentina Paraguay
Zealand
32 34 35 37 39 42 47 69 96 117
Source: World Economic Forum, Global Competitiveness Report 2010-11
11. 11
Leading country in communications
Strategic location and modern infrastructure
Mobile Argentina Chile Internet
telephone subscribers
subscribers (ranking)
(ranking) 19 53 Uruguay
Uruguay
Chile Brazil
26 56
Brazil Colombia
47 61
66 70
Source: World Economic Forum, Global Competitiveness Report 2011-12. Ranking for 142 countries
Uruguay is the most advanced country in Latin America according to the Information
and Communication Technology Index (ICT), developed by the International
Telecommunication Union in 2011
12. 12
Uruguay: A competitive country to do
business
Favorable business environment
The Global Competitiveness Index 2012
Highly
Competitive
Brazil Chile
Peru Uruguay
Colombia
Argentina
Ecuador
Bolivia Third place in South America
63rd position in the Global Ranking
Paraguay
Venezuela
Slightly
competitive
Source: Uruguay XXI based on The World Economic Forum, Global Competitiveness Index 2012
13. 13
High educational level
Favorable business environment
Tertiary Education Adults Literacy Rate
• The State provides free education up Enrollment (%)
to and throughout College and invests (ranking)
Ireland 99.0
4.5% of its GDP in education USA 6
Switzerland 99.0
• 100% of high school students have
Spain 18
UK 99.0
Argentina 21
completed at least three years of USA 99.0
English and two years of Computer Uruguay 25
Chile 98.6
Science Ireland 33
Uruguay 98.3
• 21% of university students are UK 36
Argentina 97.7
developing careers on Accounting, Chile 38
Finance and Business Administration Switzerland 51 Spain 97.7
• 17% of university students are Brazil 68 Paraguay 94.6
developing careers in Science and Paraguay 76 Brazil 90.0
Technology Source: The World Economic Source: United Nations, Human
Forum. The Global Development Reports 2011
Competitiveness 2011-12
14. 14
Highly competitive human resources
Comparison of net annual salaries: Total annual labor costs in Uruguay (US$):
Favorable business environment
Seamstress 6,600
Junior
12,200
mechanic
Systems
88,500
Manager
HHRR
89,000
Manager
Production
104,100
Manager
Financial
107,900
Manager
Business
114,200
Manager
Chief
192,600
Executive
Source: Uruguay XXI based on data from Advice and PwC, February 2012
15. 15
Investment Promotion
Complete legal framework for investments
Favorable business environment
• The State recognizes the important role of FDI and maintains a favorable business
environment
• Uruguay has a significant background for attracting investments in agriculture,
industry, services and infrastructure
• Investment Law (No. 16.906) – January 1998:
 Foreign and domestic investors are treated under equal conditions
 Prior authorization or registration are not required
 There are no restrictions to capital transfers or profits abroad
• In 2008, the Government created a non-stop shop to assist investors by establishing
objective criteria for granting tax exemptions, this was successfully accomplished
through an efficient, transparent, simple and non-arbitrary mechanism
16. 16
Investment Promotion
Tax benefits
Favorable business environment
• Exemption from Corporate Income Tax* between 20% and 100% of the
invested amount and for a minimum period of three years, depending on the
evaluation of the project by a series of indicators
Indicators and weight coefficients
o Employment generation: 30%
o Territorial decentralization: 15%
o Increase in exports: 15%
o Cleaner production or Investment in R&D: 20%
o Sector Indicator: 20%
* Corporate Income Tax exists only at national level (25%)
17. 17
Investment Promotion
Calculating formula for the Corporate Income Tax benefit
Favorable business environment
• To be eligible for the benefit, companies must attain at least 1 point,
ensuring a floor of 20% exemption from Corporate Income Tax
Total weighted score Exemption
2 29%
4 47%
6 64%
8 82%
10 100%
18. 18
Investment Promotion
Other tax benefits
Favorable business environment
• Exemption of Wealth Tax on civil works for eight years in
Montevideo and ten years in other departments, 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, on the domestic acquisition of materials and
services for civil works
19. 19
Industrial Parks
• The users of industrial parks are eligible for the benefits specified in Law
Favorable business environment
No. 16,906
• Additional benefits:
– The total weighted score will be increased by 15%
– They will have a 5-year tax credit for the employer’s social security
benefits of the new job positions created by the project
• At this moment there are three industrial parks with authorization:
– Parque Industrial Alto Uruguay
– Parque Industrial de Juan Lacaze
– Parque Industrial Zona Este
• The Parque Industrial Las Piedras will soon have authorization
20. 20
Investment Projects
Projects approved by the Commission for the Implementation of the Investment Law
(COMAP)
Favorable business environment
1429
1290
US$ million
1150 Projects approved by sector (2011)
1058
Agriculture
Number of projects Tourism 7%
852
10%
833
485
Services 30%
393
313
Commerce
295
32%
177
61 63 75
2005 2006 2007 2008 2009 2010 2011
In the last five years, the
amount of projects presented to Industry 21%
the COMAP multiplied by ten
21. 21
Temporary Admission
(similar to the drawback regime)
Favorable business environment
• Temporary Admission is the tax-free introduction of foreign
goods to the domestic market to be exported, in the state in
which they were introduced or after having been subject to
certain 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.
23. 23
Free Ports and Airports
• Only free ports on South America’s Atlantic coast
Favorable clima de negocios
• 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
25. 25
In summary
These are exciting times for Uruguay:
• Our economy is growing
• Investments are flowing
• We are carrying out many innovative programs
26. Thank you!
URUGUAY XXI
www.uruguayxxi.gub.uy
invest@uruguayxxi.gub.uy
