Why Invest in Uruguay?

Levels of Government Transparency

Acceptance of a bribe is a felony under Uruguay’s penal code. US businesses report that government corruption is not an obstacle to foreign investment, although bureaucratic procedures are sometimes complicated and slow moving.

Transparency International is a Berlin-based organization that ranks and scores countries by their levels of perceived corruption (the abuse of public office for private gain). The scores range from 10 (squeaky clean) to 0 (very corrupt). A score of 5.0 is the number Transparency International considers the borderline figure distinguishing countries that do and do not have a serious corruption problem.

For 2007, Uruguay was ranked the 25th least corrupt country out of 179 countries, with a score of 6.7. It is the second least corrupt country in Latin America after Chile. For comparison, here is the ranking of Southern Cone countries:

Chile ranked 22 with a score of 7.0
Uruguay ranked 25th with a score of 6.7
Brazil ranked 72nd with a score of 3.5
Argentina ranked 105th with a score of 2.9.

Latest IMF Board Report Summary of the Executive Board Assessment (November 11, 2009)

Executive Directors commended the authorities’ achievements in reducing Uruguay’s vulnerabilities, which have enabled the economy to withstand well the global recession. Directors praised in particular Uruguay’s sound macroeconomic policies and skilful public debt management; its robust and well-regulated banking system; its solid external position—underpinned by a flexible exchange rate regime; and its advances in poverty alleviation. Low private sector leverage and minimal bank exposure to foreign toxic assets have also helped to limit the transmission of the global crisis to Uruguay. Directors noted the quick turnaround in the Uruguayan economy, welcoming the resumption of growth in the second quarter of 2009.

Directors commended the authorities’ policy response to the global recession. The monetary policy stance was appropriately tighter than in other emerging markets in light of inflation concerns, while fiscal policy was geared to broadly maintaining the significant increase in nominal expenditure as planned, allowing automatic stabilizers to work. Directors supported the authorities’ commitment to improve productivity and the business climate.

Full report available at :
(http://www.imf.org/external/np/sec/pn/2009/pn09127.htm)

Beneficial Promotion Systems

Attractive incentives for investment, which may qualify for company income tax exemptions of up to 100% of investment. The government has taken the necessary steps to enable potential investors to go through a friendly and efficient system when considering investing in Uruguay.

In 2008, the Government improved the Investment Law by creating an automatic, predictable, effective and transparent mechanism that benefits a broader base of firms and it specifies government’s criteria for granting them.

It streamlines procedures in terms of tax exemptions requests, and establishes a one-stop-shop for investment requests and the guidance of potential investors.

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		Investment Opportunities in Uruguay