QSM Chap 10 Service Culture in Tourism and Hospitality Industry.pptx
Presentation investment and trading with uruguay
1. INVESTMENT AND TRADING WITH
URUGUAY
Juan Martín Olivera
Seoul, South Korea
May 29, 2012
Misiones 1424, 2nd Floor
11000 Montevideo, Uruguay
Tel.: (598) 2916 58 59
Fax: (598) 2916 58 63
jolivera@olivera.com.uy
www.olivera.com.uy
2. Uruguay: a small country among giants
Geographical location: South America, bordering
Argentina and Brazil
Area: 176,215 km2
Population: 3.4 million
Capital city: Montevideo
Language: Spanish
GDP: USD 40,265 million
GDP per capita: USD 11,998
Literacy rate: 98.3%
3. Why Uruguay?
• Strongest democracy and social and political stability in Latin America.
• Continued economic growth and investment despite global slump.
• Excellent labor value for money in the region, with highly skilled Human
Resources.
• Highest internet, broadband and PC penetration in Latin America.
• Attractive free zone, free port and free airport regimes, and broad investment-
related tax exemptions.
• Access to MERCOSUR, a US$2,5-trillion-GDP free trade zone that also
includes Argentina, Brazil and Paraguay.
4. Clear rules and political and social stability
Ranking Uruguay in South America
Low Corruption
(Transparency International 2011)
2
Democracy Index
(The Economist Intelligence Unit 2011)
1
Economic Freedom Index
(Heritage Foundation 2011)
2
Prosperity Index
(Legatum Institute 2011)
1
Political Stability
(World Bank – World Governance Indicators 2011)
1
Quality of Living
(Mercer Quality of Living City Ranking 2011)
1
5. Low Corruption
(Transparency International
2011)
New Zeland 1
Canada 10
Japan 14
Chile 22
USA 24
Uruguay 25
Spain 31
South Korea 43
South Africa 64
Argentina 100
Democracy Index
(Economist Intelligence Unit
2011)
Norway 1
New Zeland 5
Uruguay 17
USA 19
Japan 21
South Korea 22
Spain 25
Chile 35
Argentina 51
Colombia 55
Economic Freedom
Index (Heritage Foundation 2011)
Hong Kong 1
New Zeland 4
Chile 7
USA 10
Japan 22
Uruguay 29
South Korea 31
Spain 36
South Africa 70
Argentina 158
Clear rules and political and social stability
6. Strong economy
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009 2010 2011
Cumulative Annual GDP
Growth Rate (2004–2011): 5.8%
10,5
9,7
8,5
7,5
4
2,8
2,6
0 5 10
China
India
Uruguay
Argentina
Rusia
Japan
USA
FDI percentajge of GDP
(2010)
8. Promotion of foreign investments
• Government recognizes the important role of the FDI and maintains a
favorable investment climate.
• Domestic and foreign investors are treated equally.
• Investments do not require prior authorization or registration.
• No exchange control. Free transferability of capital and profits from foreign
investments.
• Investment projects may qualify for corporate Income Tax rebates ranging from
51% to 100% of the amount invested, plus rebates of other taxes. Corporate
income tax is set at 25%.
9. Temporary admission regime
• Similar to a drawback regime, allows companies to import inputs free of
tariffs for up to 18 months, as long as these are used to produce goods to
be exported.
• Manufacturers can enter tariff-free: raw materials, supplies, parts and
intermediate products used to manufacture products to be later exported.
• Also covered under this regime are products that are consumed in the
production process without being incorporated in the finished exported
product, as well as containers and packing material.
10. Free Trade Zones
• FTZs are duty-free areas within Uruguayan territory.
• FTZs have developed as important poles of commercial and industrial activity
and services for the rest of the world.
• The entrance and exit of goods to and from the FTZ are not considered
importations or exportations.
• FTZ Companies are 100% exempt of:
• Corporate income tax
• Net Worth tax
• Import levies
• Any other tax created or to be created in the future
• National monopolies are not applicable in FTZs.
12. Information Technology and Telecomunications
• #1 software exporter in Latin America (US$ 68 per capita, followed by Costa
Rica with US$ 33)
• #1 technology country in Latin America (Latin BusinessChronicle’s Latin
Technology 2010 Index)
• Highest total telephone penetration in Latin America:123 mobile lines per 100
residents in 2009
• Connection to Global Crossing cable due in 2012 will enable a much faster
connectivity
• Broad tax benefits
13. Logistics and Transport
• Optimal logistic location in South America’s Southern Cone where the Río de la
Plata, Paraná and Uruguay Rivers converge with the Atlantic Ocean.
• Deep water ports operating under free port regimes. Important grains and chips
terminal in the Montevideo port coming soon.
• 65% of in-transit merchandise in the region goes through Uruguay
• New airport terminal, new ring road in Montevideo and expansion of highway to
conect all the coast.
• Government has stressed the importance of renewing and expanding the
highway infrastructure and important incentives are to be expected in future
public bids.
14. Forestry and Agriculture
• Uruguay is mainly an agricultural country where 70% of total exports are
composed of cattle meat, wheat and mix of cereals, rice, milk and other
dairy products.
• Uruguay is one of the world's largest producers of soybeans, greasy wool,
horse and cattle meat.
• Forestry has experienced an outstanding development, representing 13%
of the exports. Uruguay has received billionaire investments in two pulp
mills and related business. Only 21,5% of the areas destined to forestry
has been used.
15. Oil, Gas and Mining
• Despite the global crisis, british and french companies, plus other consortiums
have presented exploration and production bids for blocks off the Uruguayan
coast at depths of between 50 and 2,000 meters
• More explorations at the north of the country are scheduled.
• This raises prospects for energy independence and within, in the future, a
significant reduction in energy costs.
• Important iron deposits have recently been found and are attracting foreign
investments, which might place Uruguay in a position similar to Australia,
Brazil, Canada or Sweden.
16. Renewable energies
• Hydro power is already a big energy source in Uruguay.
• Power generation from biomass and wind farms already in place, with
important tax benefits.
• Strategic development plan: add 500 MW of renewable energy to the national
energy matrix by 2015 (200-300 MW wind, 200 MW biomass and 50 MW small
hydro).
• State-owned utility UTE’s public bid for 150MW of wind power is an important
step in this sense.
• Soon Uruguay will have Nº1 position in the Americas in the proportion of non-
traditional renewable power generation capacity out of its total power capacity.
18. Uruguay: a gateway to MERCOSUR
• Suitable market for the development
of international activities and an
attractive business center with a
tradition of stability
• Member of Mercosur together with
Argentina, Brazil and Paraguay
(Venezuela is under integration
process)
• Mercosur is currently a Customs
Unions with a 200 million consumers
market
• Common tradition assures the
continuity of the regional integration
regime
19. INVESTMENT AND TRADING WITH
URUGUAY
Juan Martín Olivera
Seoul, South Korea
May 29, 2012
Source:
Uruguay XXI – Investment and Export Promotion Agency
www.uruguayxxi.gub.uy
Misiones 1424, 2nd Floor
11000 Montevideo, Uruguay
Tel.: (598) 2916 58 59
Fax: (598) 2916 58 63
jolivera@olivera.com.uy
www.olivera.com.uy
