Tourism and-real-estate-uruguay-xxi-feb-2011-eng

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Tourism and-real-estate-uruguay-xxi-feb-2011-eng

  1. 1. February 2011Tourism and Real Estate
  2. 2. 1. Why invest in the sector in Uruguay? Tourism is an expanding industry both worldwide and in Uruguay with investment opportunities available in multiple sub-sectors. Tourism accounts for approximately 6% of Uruguayan GDP. Uruguay offers very attractive natural conditions for several types of tourism, all located at very short distances from each other: renowned beaches on the eastern littoral, rural tourism in the hinterland, hot springs along the western littoral and urban tourism in cities such as Montevideo and Colonia. Infrastructure is constantly being updated for visitors to enjoy the best services. Examples include the Montevideo Airport and the Colonia River Terminal, both opened in 2009. In addition, Uruguay’s privileged location, rich soils, reasonable property prices and a healthy financial system are advantages that make investments attractive and, above all, safe. Uruguay’s proximity to Argentina (and Buenos Aires in particular) and southern Brazil ensures a constant inflow of tourists. The Ministry of Tourism and Sport is the national authority for tourism. The Ministry promoted the creation of the 2009-2020 National Sustainable Tourism Plan, which encourages diverse activities with a stable legal framework that promotes sector investments through significant tax exemptions. The region’s recent high economic growth is reflected on present can real estate and tourism investments on course that will ensure a sustained increase in foreign visitors to the country.2
  3. 3. 2. Incoming tourism in Uruguay and the world2.1. Major global tourism trends: fairly constant annual growth, Europe and USA assignificant origins and destinations, seasonal peak in July and August1International tourism has been on the rise over the last 15 years. The number of tourists hasexpanded from 534 million in 1995 to an estimated 940 million in 2010. There was lesspronounced growth between 2001 and 2003 and a slight decline in 2009 due to the internationalcrisis, but a recovery was seen in 2010.In South America, the number of tourists per year rose 76% between 1995 and 2008, reflecting ahigher growth than the world average (72%). Income from tourism doubled between 2000 and2008, from US$ 475 to US$ 946 million. Similar growth has been seen in nearly all regions of theworld. See Figure 1.Figure 1. Incoming international tourists (millions)2In 2009, Europe received 52% of international tourists, followed by the Asia-Pacific region (21%),the Americas (16%), the Middle East (6%) and Africa (5%). The most significant change since 1995has been the higher relative growth of the Asia-Pacific region in comparison with Europe and theAmericas. See Figure 2.1 Source: World Tourism Organization (UNWTO) Tourism Barometer.2 Source: World Tourism Organization (UNWTO) Tourism Barometer, 1 and 6/2010, 2010 estimated.3
  4. 4. Figure 2. Incoming international tourists per region, 2009 (millions of tourists and percentages)3The pattern of income distribution from international tourism is similar to the one reflected in theprevious chart except for the relative importance of the Asia-Pacific region and the Americaswhich is more significant.Figure 3 shows the arrivals of international tourists for the 10 principal tourism destinations (ofthe 120 destinations covered by the World Tourism Organization – UNWTO). Argentina, Brazil andUruguay have been added to the chart for comparison purposes. The figure shows that Uruguay, acountry with a small population, is ranked fifth in terms of the number of tourists in comparison topopulation, denoting the importance of tourism for the country.3 Source: World Tourism Organization (UNWTO) Tourism Barometer 6/2010.4
  5. 5. Figure 3. Incoming international tourists per region (2009, percentage of population and figuresin millions)44 Source: tourists - UNWTO, Tourism Barometer 6/2010; population - Wikipedia, estimated population for early 2011. Note: chartincludes the 10 major tourist destinations plus Argentina, Brazil and Uruguay.5
  6. 6. 140% 114% 112% 120% 100% 83% 74% 80% 63% 60% 45% 33% 29% 40% 19% 18% 20% 10% 4% 2% 0% F ranc e S pain Malays ia Italy Urug uay United T urkey G ermany Mexic o US A Arg entina C hina B raz il K ing dom Tourists 74 52 24 43 2 28 26 24 22 55 4 51 5 Population 65 47 29 58 3 63 78 82 113 312 42 1,333 2026
  7. 7. Incoming to7
  8. 8. 2.2. Incoming tourism in UruguayVisitors and annual exportsIncoming tourism in Uruguay has expanded over the past five years. The number of visitors rosefrom 1.8 million in 2006 to 2.1 million in 2009. An estimated 2.4 million are expected for 2010.5Tourism exports, in turn, rose from US$ 594 million in 2005 to US$ 1,311 million in 2009 and areexpected to reach US$ 1,560 million in 2010.6 See figures 4 and 5.The World Tourism Organization (UNWTO) and the WTO.Themis Foundation, in collaboration withthe IE Business School and the Ministry of Tourism and Sport of Uruguay (MINTUR) are performinga case study entitled, “Natural Uruguay: the differentiation of an emerging tourist destination.”This study, which is the first to be carried out on a tourism destination, is focused on analyzing theincrease in per visitor spending related to the increase in tourism income in Uruguay over the past10 years.Figure 4. Uruguay: annual visitors (thousands)7 Figure 5. Uruguay: annual tourism exports (US$ millions)85 Note: 2010 estimate based on data from first half of the year.6 Source: www.bcu.gub.uy. Note: 2010 estimate based on MINTUR data on spending growth by tourists in the first half of the year(19%).7 Source: www.mintur.gub.uy. Note: 2010 estimate based on data from first half of the year.8 Source: www.bcu.gub.uy. Note: 2010 estimate based on data from first half of the year.8
  9. 9. Major tourist destinationsUruguay’s main tourism destination isMontevideo (33% in 2009), followed by Puntadel Este (26% in 2009). Overall, visitors to thecoastal region account for 40% of all tourists.See Figure 6. The highest growth areas in thecountry over the past five years are Colonia andthe coast of Rocha. The following map showsthe four major tourist areas plus Montevideo.9
  10. 10. Figure 6. Visitors per destination (2009, in Figure 7. Visitor spending per destinationthousands and percentages)9 (2009, USD millions)10 Total visitor spending in 2009 was US$ 1,300 million. Punta del Este received 46% of the total spending, followed by Montevideo at 33%. See Figure 7. Average stay per person according to lodging type and main destination The average length of stay in 2009 was 7.2 days. The 821,000 visitors staying in hotels (39%) stayed for an average of 5.5 days. Meanwhile, the 1.125 million visitors staying in houses (54%) stayed between 8 and 12 days, depending on whether they rented homes or stayed with family and friends. See Table A1 in the Appendix. Origin of visitors to Uruguay Most of the tourists who entered the country in 2009 reside in Argentina (73%) and Brazil (12%), but a significant number of Chileans and Paraguayans also came to Uruguay. Europeans and North Americans accounted for 8.4% of the total. See Table A2 in the Appendix. Visitors according to travel reason Although most incoming persons state recreation or visits to family or friends (84%) as reasons to enter the country, many come for business or professional reasons (154,000), conferences seminars or study (20,000), sport (14,000), health reasons (11,000) and other (140,000). See Table A3 in the Appendix. Daily per person spending according to lodging type Daily per person spending went from US$ 86 in 2009 to US$ 104 for hotel visitors and to US$ 95 for those staying in houses (rented or owned). Spending was US$ 116 per day in 2009 for those visiting Punta del Este. In the first half of 2010, average daily spending per tourist was US$ 93. 9 Source: www.mintur.gub.uy. Total visitors: 2,099,000. 10 Source: www.mintur.gub.uy. Total spending: USD 1,297 million. 10
  11. 11. Visitor spending breakdownTotal spending by tourists in 2009 was US$ 1,300 million. Major spending areas were: lodging(26%), food (24%), shopping (12%), transport (7.5%) and other (30.5%).2.3. Cruise ship tourism11The number of cruise ships stopping in Montevideo and Punta del Este has increased over the lastfive seasons.Cruise ship arrivals went from 99 in 2005-06 to 179 in 2009-10. The total number of visitors rosefrom 111,000 in 2005-06 to nearly 300,000 in 2009-10, as seen in the following two charts.11 Source: www.mintur.gub.uy.11
  12. 12. Figure 8. Cruise ship arrivals per port and Figure 9. Cruise ship visitors per port andseason12 season (in thousands)13In the 2009-10 season, most cruise ship visitors were Brazilian (53%), Argentine (23%), NorthAmerican (12%), European (5.5%), rest of the Americas (4.5%) and other nationalities (1.7%). SeeTable A4 in the Appendix.Cruise ship visitor spending in Uruguay, 2009-10Total cruise ship visitor spending was US$ 17.8 million, averaging US$ 61 per person. Totalspending was US$ 10.5 million in Punta del Este and US$ 7.3 million in Montevideo.Purchases accounted for 71% of spending, followed by food (16%), tours (6%), transport (1%) andother (6%).2.4. Specific data on tourism typesBeaches are the Uruguayan main attraction, with the coast concentrating 40% of visitors.14 Puntadel Este, other areas of Maldonado and Rocha feature fine sand beaches, water suitable forswimming in summer, a maritime landscape, hospitality and security. Punta del Este is where realestate investments are concentrated.Montevideo and Colonia are known for urban tourism. Montevideo has high hotel occupationrates throughout the year (70% on average).15Rural tourism has grown over the last 10 years. Farms outside the capital are used to providerecreation and a place to rest. The western littoral region near the Uruguay River features hotspring tourism facilities.12 Source: www.mintur.gub.uy.13 Source: www.mintur.gub.uy.14 See page 8 of this report.15 Information provided by Oscar Iroldi, Montevideo Tourism Conglomerate coordinator.12
  13. 13. Rural Tourism16Rendering of rural tourism services is regulated by decree 371/2002.On 2009, 122 rural establishments were surveyed, of which 23 were in Maldonado, 21 in Colonia,13 in Rocha, 12 in Lavalleja and the remaining were spread out through the rest of the country.The greatest concentration is found within 300 km of Montevideo.Rural tourism characteristics 1. Country Hotel. Contact with nature, yet with the comforts of a hotel. High level service with hints of rural life. Possibility of related activities. Lodging and all- inclusive services offered. 2. Guest Ranch. Contact with the past and history, ranch traditions. Attended by host family. Possibility to participate in ranch activities. Comfortable, home- like. Livestock or farm production. All inclusive services and activity days in the countryside. 3. Country Inn. More modern infrastructure adapted to tourism. Comfort and good level of service. Attended perhaps by host family. Activities depend on the area and activity of the farm/ranch. Lodging, all inclusive services and activity days in the countryside. 4. Tourist Farm. Small properties focusing on farm activities, which set the context for the farm’s cuisine. May or may not be attended by the host family. Farm’s own products used for consumption and sale. Offers day activities and an authentic country restaurant. 5. Country House. Concept that includes everything not included in the previous establishments. No lodging. Activities, recreation, food. Offers day activities and an authentic country restaurant.Of these establishments, 68% receive foreigners. 57% state they receive visitors from Europe, 30%from North America, 30% from Mercosur countries, 99% from Latin America and 16% from othercountries.16 Based on a study by STI-MINTUR-SUTUR-CEADU (2009).13
  14. 14. Hot Springs Tourism17There are more than 10 hot spring centers in the western littoral region of Uruguay. Significantinvestments have been made in several complexes. These centers have pools of different sizesfeaturing water from the Guaraní Aquifer with temperatures up to 44°C (111°F). Hot springdevelopments include hotels, bungalows, motels, restaurants, tennis courts, healing centers andparks.These hot springs complexes include, from north to south, Arapey (Artigas department), SaltoGrande and Daymán (Salto department); and San Nicanor, Guaviyú and Almirón (Paysandúdepartment). The sources of the hot springs were discovered during petroleum prospecting bystate-oil company ANCAP. Recent investments include Arapey Municipal Hot Springs, a 600-hectare complex, located 80 km north of the city of Salto. The 5-star Hotel Arapey Thermal Resort and Spa has also opened in the area. Nearby, the Altos del Uruguay golf club and hotel is currently under construction (as of December 2010). On the 60-hectare area including an 18-hole golf course (11 holes were opened in September 2010), an infrabasaltic perforation will be made for a 1,200 meter well to extract thermal water to supply the 5-star hotel. The hotel will feature 120 rooms, 20 suites, a hot tub, two indoor and outdoor pools, a gym and spa. The investment will total USD 18 million and will include a landing strip for small aircrafts.1817 Source: www.viatermal.com.18 nd El País newspaper, 22 of September 2010.14
  15. 15. 3. National Sustainable Tourism Plan 2009-2020In June 2009, Uruguay released its National Sustainable Tourism Plan for the 2009-2020 period,which is leaded by the Ministry of Tourism and Sport (MINTUR).The plan aims for Uruguay to be an internationally recognized friendly and safe tourismdestination that is committed to sustainable development with quality services, qualified peopleand full coordination among key sector players.The plan’s strategic orientation is based on following five lines of action: 1. An economically, environmentally and socio-culturally sustainable tourism model. 2. Innovation and quality, driven by competitiveness. 3. Increased capabilities, employment quality and commitment of players in the tourism system. 4. Marketing and promotion to broaden demand and cultivate loyalty. 5. Tourism as a tool for social, territorial and political integration while conscious of diversity.One of the aspects of the national plan is a Nautical Tourism plan to position Uruguay as a NauticalTourism Destination in the southern cone of South America.Investments will be made in three types of infrastructure: sport vessel ports, boating areas andriver facilities, for which integration is sought among nautical activity companies in the area.15
  16. 16. 4. Tourism related services: hotelsAs of April 2009, there were 488 hotels in Uruguay, 18% more than in 2002. The number of roomsrose 12% in that period. Most hotels are located in the department of Maldonado, mainly in thecity of Punta del Este. See Tables 4.1 and 4.2 and Table A5 in the Appendix.Table 1. Hotels in Uruguay (2009)19 Stars Hotels Rooms Number of beds ***** 12 1,504 2,127 **** 42 2,233 4,882 *** 154 5,386 11,093 ** 140 3,350 7,117 * 74 1,485 3,063 Not rated 66 1,506 3,957 Total 488 15,464 32,239Table 2. Hotels in Uruguay per department (2009)20 Stars Maldonado Montevideo Colonia Rocha Salto Paysandú Rest of country Uruguay ***** 4 3 1 0 1 0 3 12 **** 17 13 6 2 0 1 3 42 *** 56 18 16 12 7 1 44 154 ** 36 21 12 10 5 2 54 140 * 11 18 2 4 0 1 38 74 Not rated 19 11 5 9 6 2 14 66 Total 143 84 42 37 19 7 156 488Of the 543,190 tourists who visited Punta del Este in 2009, 38.3% stayed in hotels. Thedistribution was as follows: 1 star - 1,963 (0.4%); 2 star - 9,089 (2%); 3 star: 47,284 (8.7%); 4 star:109,958 (20.2%); 5 star: 29,780 (5.5%); not rated: 8,151 (1.5%). Some 324,323 tourists (59.7%)stayed in rental houses or in homes of family and friends. Other lodging types included:campsites – 2,450 (0.5%); apartment hotels – 5,487 (1%); timeshares – 2,610 (0.5%); other – 2,095(0.4%).2119 th Source: MINTUR, data as of 30 of April 2009.20 th Source: MINTUR, data as of 30 of April 2009.21 Source: Maldonado Tourism Observatory, 2009 year book; Quo Vades consulting firm.16
  17. 17. 5. Recent investmentsAn approximation of investments in the tourism sector over the last few years can be made usinginformation on investments promoted in accordance with law 16,906 of 1998 and decree455/007.Figure 10. Promoted tourism sector investments (US$ millions)22The following are some significant investments on course and later we will examine otherundertakings grouped by location.5.1. Carmelo Golf operated by Four Seasons, department of Colonia23Carmelo Golf is a closed development consisting of 220 lots and 12 farms with a golf course,driving range, lakes, equestrian area and polo field. The project is a joint venture between theReal Assets and Eidico companies of Argentina. The undertaking is located on route 21 in Carmeloacross from an exclusive 44-room hotel operated by Four Seasons. An international airportserving the highest number of private flights in Uruguay is located 7 km from Carmelo in thedepartment of Colonia.Carmelo Golf is located among pine and eucalyptus trees near the La Plata River. Rooms aredistributed in 90 m2 bungalows and 120 m2 suites with views of the countryside and the river. Thecomplex includes a spa, gym, indoor and outdoor pools, beach, two tennis courts, two restaurants,a convention center and casino.The total investment amount will be US$ 15 million. Sales prices for lots vary between US$ 40,000and 350,000.22 th Source: COMAP. Note: 2010 estimate with data as of 30 of September 2010.23 th Source: www.ciudadbiz.com, business news website, 8 of November 2010.17
  18. 18. 5.2. Hotel Fasano and Las Piedras Villas development, Punta del Este24Located eight kilometers from La Barra in the department of Maldonado on the top and side of ahill, this 480-hectare complex opened in December 2010 with a total investment of more thanUS$ 100 million. The hotel consists of 34 bungalows ranging between 38 and 120 m2 in size and isadministered by Hoteles Fasano of São Paulo, Brazil. It was designed by Brazilian architect IsayWinfield.The project also features 295,000 m2 lots surrounding a golf course designed by Arnold Palmer.Homes have been built on some of the lots. In addition, there is a section with one and fivehectare properties.The complex includes a polo field, tennis courts and a beach on the Maldonado Stream.5.3. The Setai hotel and development in José Ignacio, department of Maldonado25The Setai José Ignacio is located in the beach resort town of José Ignacio, Maldonado. It is locatedon a 25-hectare property and has 1,300 meters of oceanfront space.The undertaking consists of two areas: An oceanfront boutique hotel in the main area with 10 individual villas. A residential area consisting of 40 lots to the east and west of the hotel for luxury homes.This exclusive boutique hotel will feature a wide range of services, including retail, recreation,leisure and a spa that will also serve villa owners. The main building will have 2,800 m2 of spaceand will house administrative and recreational activities of the hotel and spa, including arestaurant, Club Setai and 10 exclusive suites. The hotel will offer lodging in two-bedroom villaslocated on the property.The residential area consists of 40 individual lots averaging 2,000 m2 in size. 26 of the lots areoceanfront and the rest are in the second and third rows from the oceanfront lots. The lots weredesigned for large and exclusive residences ranging from between 250 to 500 m2.The total investment for the hotel and general infrastructure is approximately US$ 40 million.5.4. Hotel Rivera Casino Resort, city of Rivera26This project, located in the city of Rivera on the border with Brazil, consists of three sectionstotaling 13,000 m2 of space. A 4-star hotel will feature 60 rooms, a restaurant, conference hall,spa, game room and pool.Another building will include slot machines and a restaurant.A third part of the project is a remodeling of the former Hotel Casino building and will featurecasino table games, a slot machine room and six VIP rooms and will be connected to the hotelcomplex via a glass bridge over Uruguay Street.24 th Source: El Observador newspaper, Café y Negocios section, 16 of November 2011.25 th Source: Seinco, 29 of November 2010.26 rd Source: www.ciudadbiz.com, 3 of November 2010.18
  19. 19. The total investment by the Boldt-ICM-Manteo consortium is estimated at US$ 27 million.5.5. Hotel projects underway in Montevideo27In 2009, Montevideo had 9,700 hotel beds28 and new projects currently in construction will addanother 1,200. The following are the main projects underway. Regency Hotels Group.29 Regency, a business group of local capital, has three hotels in Montevideo and is building one more in the Carrasco area with a US$ 3.5 million investment. Sofitel Montevideo Casino Carrasco and Spa. Remodeling underway.30 The municipality of Montevideo awarded the reconstruction and 30-year concession of the Carrasco Hotel Casino to a consortium led by Codere of Spain along with the AGG company of Argentina, other international investors and the Sofitel hotel operators, the premium brand of French chain Accor. Sofitel administers 134 luxury hotels in 50 countries. More than US$ 60 million will be invested in the project. The hotel will feature 119 luxury rooms and will open in 2012. Codere is a Spanish multinational renowned for private casinos in Europe and Latin America. Accor is already represented in Uruguay through the Ibis Hotel, located on Montevideo’s rambla, or seaside avenue. Hotel Esplendor Cervantes Montevideo. Remodeling underway.31 Argentine business group Fën administers 17 establishments in several countries in Latin America and will remodel and administer the Cervantes Hotel, which has been declared a historical heritage site of the city. The hotel is located downtown and will feature 85 rooms and a multipurpose hall for corporate events, parties and tango galas, with an original design (boutique hotel). The total investment amount will be US$ 8 million. The opening is scheduled for 2011. Pestana Montevideo Hotel. Remodeling underway in the former Jockey Club building.32 Portuguese business group Pestana Hotels & Resorts administers 88 hotels, 43 of which are on three continents and 45 luxurious and historic hotels in Portugal, in castles, monasteries, palaces and fortresses. In Montevideo, the hotel is located on the capital’s main avenue, 18 de Julio, 100 meters from Plaza Independencia. The hotel will feature 100 rooms on 15 floors with a spa, indoor pool and halls for events and conventions. Neela of Spain is the owner of the building, which will be leased for 30 years. This undertaking will be the 13th for the company in South America and the investment will total US$ 20 million. The opening is planned for 2012. Hilton Garden Inn (part of the Hilton chain). Next to Montevideo Shopping Center and the World Trade Center, featuring 120 rooms and a US$ 10 million investment currently underway.27 th rd Source: El Observador newspaper, 14 of July 2010 and El País newspaper, 3 of September 2010.28 Source: Montevideo Tourism Conglomerate strategic plan, 2009.29 th Source: El País newspaper, Economía y Mercado section, 8 of November 2010.30 th th Source: El País newspaper, 25 of November 2009, 10 of September 2010.31 th Source: El País newspaper, 8 of November 2009.32 th Source: www.portaldeluruguay.com, 9 of March 2010.19
  20. 20. After Hotel. Located in Pocitos/Buceo, with 90 rooms and a US$ 8 million investment underway. Urban Express Hotel. Located in downtown Montevideo next to the Adela Reta Auditorium. Opened in September 2009 with 30 rooms.5.6. Projects underway in Punta del Este, Punta Ballena, La Barra and José IgnacioTo illustrate the growth of real estate investments in the greater Punta del Este area, we presentsome large projects currently underway financed mainly with foreign capital. Also included is anundertaking by the municipality of Maldonado.Sales prices for lots vary between US$ 30 and 150 per m2, while apartment prices do not exceedUS$ 3,000 per m2 on average. Convention Center and Fairgrounds. The municipality of Maldonado is in the process of awarding the construction of a convention center and fairgrounds on a property in El Jagüel, located a few minutes from downtown Punta del Este and the city of Maldonado. The site has convenient connections to highways, the airport and port. The first stage includes the construction of a convention hall and preparation of a 12,000 m 2 fairground. The second includes another convention hall and a 6,000 m2 expansion of the fairground area. The plan and financing proposal were presented by architect Carlos Ott and Bilkoy S.A. A bid is pending for the construction and management stages.20
  21. 21. The following are some projects under construction as of November 2010: 33 Silente Club de Mar. A project of Argentine capital located on the rambla (Seaside Avenue) in the Rincón del Indio neighborhood. Four buildings on a 3.5-hectare lot with units ranging from 160 to 718 m2 with ocean views plus 22 houses of 180 m2 each. Each unit has two parking spaces. The complex has a par 3 pitch and putt course, heater covered pool, outdoor pool, tennis court, club house, gym, spa, business center, reading room and kids’ club. Blue Bird. A project of Swedish capital. An oceanfront tower on La Mansa beach with two and three bedroom units ranging from 130 to 300 m2. One. Argentine and Uruguayan capital project featuring four 25-floor towers on a 28,000 m2 property with ocean views. Units have three and four suites each and services and conveniences of a 5-star hotel. Le Parc 1 and 2. An oceanfront tower of Argentine capital featuring 24 floors of 2 and 3 bedroom ocean view luxury apartments, all with housekeeper quarters. Laguna de los Cisnes. European capital project, 15 minutes from Punta del Este and 4 km from the Laguna del Sauce airport. 238 hectares divided in 224 half-hectare lots and 120 hectares of common space, 20 hectares of a lake and 4,000 hectares for watersports. Prices start at US$ 29 per m2. Swan Lake Forest. European capital project, located on route 12 km 5 facing Sauce Lake in the Cumbres de La Ballena hillside. On this 50-hectare development, 5 hectares will be allotted for a hotel that will be completely independent from the rest of the development. Lots sizes range from 1,000 to 4,800 m2. Green Park. Argentine capital project located in Punta Ballena. A private club with apartments surrounded by 140 hectares of virgin forest. El Puertito. European capital project. A development in Punta Ballena 9 km from the airport and 15 km from Punta del Este on Sauce Lake. Of the 9-hectare area, 6 are for exclusive use and 33% consist of common spaces. Villa Lagos. European capital project, development in La Barra. This project is located in Buenos Aires neighborhood along route 10. It is a large residential development consisting of 13 maritime farms between 4 and 5 hectares each and villas between 700 and 900 m2. Pueblo Coyote. Argentine capital project. A development in La Barra in an area with vineyards consisting of 29 lots of 2,000 m2 each. It has a tennis court, studio, boutique winery and clubhouse with a pool and barbeque area. Laguna Estates. Spanish capital project. A development in La Barra located on route 104, 15 km from Punta del Este. It consists of 81 lots of between 5,000 to 10,000 m2 with tennis courts and a clubhouse. Laguna Escondida. Argentina capital project, a hotel and development in José Ignacio. The project is on two properties accounting for approximately 120 hectares. The residential and hotel/spa area will be developed on an 86-hectare tract north of the highway. The second 12-33 Source: ciudadbiz.com, 12 November 2010.21
  22. 22. hectare tract on the beach will house the beach club and residences with lot sizes ranging from 1,800 to 7,000 m2 with a front greater than 35 m. Las Coronillas. Argentine capital project, development in José Ignacio. Total surface area is 100 hectares consisting of 55 properties of 8,000 m2 each with 50 hectares of lake and park areas, 4,500 m of roads, club house, pool, bonfire area, stables and corrals, children’s area and horse and bicycle trails. Veramansa. A complex by the Alvear business group of Argentina. It consists of several buildings and 800 m2 lots (average) surrounded by trees and lakes and a direct access to the beach. The investment will total more than US$ 30 million and will include a 5-star spa. Apartments range in size from 180 to 400 m2 and feature an international level of luxury.5.7. Projects underway in the city of Colonia34Over the last few years, real estate in the cityof Colonia has seen significant growth. On thecoastal avenue, the lot prices exceed US$ 500per m2 and properties sell for more than US$2,200 per m2. 80% of the apartments on thecoastal avenue are purchased by Argentineswho use them as second or retirementhomes.In 2010, real estate projects were announced with investments totaling more than US$ 5 million,including the Altos de Virrey hotel, the Costa Colonia condo hotel, and several apartmentbuildings, all along the coastal avenue.6. Prices and costs in the Uruguayan real estate sector6.1. Real estate marketThe largest real estate investments have been made in Montevideo and Punta del Este andconsists of two main types: horizontal properties (condominiums) and individual houses. Both arelinked to the tourism industry, especially in Punta del Este, due to the fact that most buyers areforeigners and because the properties are rented to tourists in summer.34 th Source: El Observador newspaper, Café y Negocios section, 17 of October 2010.22
  23. 23. The National Statistics Institute (INE) provides construction costs and existing home sales prices for Montevideo. Costs are categorized into 10 housing types in order of price.35 Sales price classification includes variables such as type (horizontal property, etc.), age (decade of construction), neighborhood, size (m2) and use (housing, office, retail, other).36 The following is a cost and sales price comparison for specific horizontal properties in Montevideo. For the comparison, we have selected the highest cost properties (luxury tower with elevator and heating). Regarding sales price, we have selected the top four highest price areas and the 75th percentile.Table 3. Montevideo: comparison between used unit sales price and construction cost, 2007-2009 (US$/m2)37 Construction Used unit sales price Year cost Punta Carretas Pocitos Parque Rodó Malvín Average 2009 958 1,564 1,448 1,362 1,331 1,426 2008 928 1,507 1,294 1,158 1,273 1,308 2007 753 1,314 1,152 974 1,066 1,127Note: cost per square meter includes: materials, compensation, equipment depreciation, benefits and general expenses of theconstruction company, value added tax and social security (BPS). Does not include land value, professional fees, constructionpermit costs and real estate commissions. The annual per square meter cost was calculated by averaging 6-month costs inUruguayan pesos from the INE and applying the inter-bank exchange rate (ask price) averaging the monthly exchange rate takenfrom www.ine.gub.uy/índices de precios y salarios/cotización de monedas. The sales price refers to used horizontal properties at ththe 75 percentile.35 See www.ine.gub.uy/actividad/actividad inmobiliaria/indicadores de actividad y precios del sector inmobiliario.36 See www.ine.gub.uy/indices de precios y salarios/precios de la construcción de viviendas.37 Source: INE National Statistics Institute. For costs: www.ine.gub.uy/indices de precios y salarios/precios de construcción deviviendas. For sales prices: www.ine.gub.uy/actividad/actividad inmobiliaria/indicadores de actividad y precios del sectorinmobiliario.23
  24. 24. No cost data exists for Punta del Este, but we estimate that costs are perhaps only slightly higherthan in Montevideo. However, per square meter sales price data for housing is available(horizontal properties and individual houses).For example, the average sales value per square meter in Punta del Este was US$ 1,623 and the75th percentile was US$ 2,024. In Pine Beach, the average value was USD 1,997 and the 75 thpercentile was USD 2,401.386.2. Montevideo office market39The supply of office space has expanded and is able to satisfy the requirements of domestic andmultinational firms. The office market in Montevideo began a renewal process in 2009, whichbegan with the start of the construction of World Trade Center III in 2007. At the end of the thirdquarter 2009, two class A+ buildings were opened which added 48,175 m2 of office space to themarket, plus three class A buildings that provided 9,798 m2 of space. Eight construction projectsare expected to be completed in 2010 and six moreare expected for 2011. See Figure 11.Following the international trend, developers arebeginning to show concern for the environmentaland renewable resources by seeking LEED standardsdeveloped by the United States Green BuildingCouncil for new buildings.Figure 11. Change in inventory of class A+, A and Boffices in Montevideo, 2003-2014 (thousands of m2)40Figure 12 shows forecasted changes in office space locations in Montevideo between 2009 and2014. Existing buildings have a vacancy rate been zero and less than 5% in some cases.Figure 12. Inventory of A+ and A offices in Montevideo in 2009 and estimated growth for 2009-2014 (thousands of m2)4140 Source: Colliers International, Q4 2009. Does not include officies in the Zonamerica free zone. Includes offices in the AguadaPark and WTC free zones.41 Source: Colliers International, Q4 2009.24
  25. 25. Figure 13. Per category average rental prices for official buildings in Montevideo, 2009(US$/m2)42 There is a wide range of prices in the market due to 30 4,3 various promotions developers have included in their 20 3,5 marketing mix. For example, for a class A building, 10 22 ,7 2,0 monthly rental prices vary from USD 14 m2 in areas 17,4 8,8 such as Tres Cruces to up to USD 26 in Ciudad Vieja. 0 See Figure 13. A+ A B Precios de alquiler mensual (US$/m2) Figure 14 shows rental prices and monthly expenses for some large buildings. Gastos comunes mensuales (US$/m2)Figure 14. Average office rental prices in Montevideo, 2009 (US$/m2)4342 Source: Colliers International, Q4 2009.43 Source: Colliers International, Q4 2009.25
  26. 26. W orld T rade C enter 3.5 24.0 T orre Marigot 2.5 20.0 T orre J uncal 3.5 20.0 G as tos mens uales P laza Mayor 1.4 18.0 de expens as (US $/m2) Aguada P ark 3.5 P recios de alquiler 18.0 mens ual (US $/m2) T orre E l G aucho 2.2 9.0 T orre de los P rofes ionales 2.0 8.7 0 5 10 15 20 25 307. Human resource trainingUruguay offers a wide range of human resource training in tourism, especially in the mid-range.The following are some examples:7.1 ORT University. Tourism Management Technician degree (two years). Preparation to assumesupervisory responsibilities in medium and large tourism organizations or management of smallcompanies, including hotels, gastronomy services, travel agencies and transport services.7.2. Montevideo Polytechnic Institute (ITHU). Two year courses: Expert in Gastronomy and Expertin Hotel Management. One year courses: Expert in Tourism and Professional Organizer ofCongresses and Events.7.3. Polytechnic University of Uruguay(UTU). The following courses are offered:Expert in Tourism (three years), Expert inPerformance and Recreation (one year),Expert in Lodging Management (twoyears), Expert in Tour Guide and TouristicCircuit Design (two years). Travel AgencySales and Reservation Assistant (twoyears), Tour Guide, Hotel Receptionist-Concierge (two years).8. Sector investment promotion and regulation26
  27. 27. 8.1. Investment promotionIn Uruguay, several regulations offer benefits for investments in tourism. Some benefits are for allindustries, while others are specific to the tourism sector. The following are two recentlyintroduced incentives for investment promotion and a third existing system to provide income taxexemptions for investments.Recent investment promotion legislationThe Investment Promotion and Protection law of 1998 (no. 16,906) established the generalpromotion framework while decree number 455/007 (26th of November 2007) is the currentapplicable regulation. Decree number 175/003 (7th of May 2003) adapts said regulation specificallyto the tourism sector.Applicants may select either system, or a combination of benefits from both in accordance withthe following.A – General investment promotion system: chapter 3 of law 16,906 – Investment Promotion andProtection Law and Regulatory Decree 455/007.This system is applied to any type of company that is subject to the IRAE corporate income tax inthe agriculture-livestock, manufacturing, retail or service sector and that invests in: moveable fixed assets directly linked to the company’s activity, including computer hardware, utility vehicles. fixed improvements (materials and services for civil projects), excluding those for residences.Investment projects must be declared as promoted by the Executive Branch. If a company belongsto a promoted economic sector, it still must apply to the COMAP application commission (at theUNASEP private sector support unit) to receive tax benefits.Applications are submitted to COMAP44, which has set timeframes (30, 45 or 60 days according toinvestment amount) to establish benefit amounts and promotion status with the ExecutiveBranch. If the timeframe is not met, it is understood that the project has been approved.The IRAE corporate income tax exemption is the principal benefit and consists of deductinginvestments made from taxes payable, in accordance with certain conditions regarding investmentamounts and fulfillment of certain objectives.1) Investment amountSeven investment sizes have been established so that the higher the invested amount, the higherpercentage of the investment that can be deducted from IRAE payable, and the longer the periodavailable for the deduction. See Table 4.Table 4. Project sizes according to investment amount, percentage of IRAE income taxdeduction and timeframe4544 COMAP and UNASEP offices are open to the public in the Uruguay Fomenta building located at Rincón 518, Montevideo.27
  28. 28. maximum % of Project Size in Project Size in investment to be Maximum term Indexed Units US$ millions deducted from for deduction (UI) millions taxes Small less than 3.5 less than 0.4 60% 5 years Medium S1 3.5 to 14 0.4 to 1.4 70% 15 years Medium S2 14 to 70 1.4 to 7.0 80% 20 years Large S1 3.5 to 140 7 to 14 90% 25 years Large S2 140 to 500 14 to 50 90% 25 years Large S3 500 to 7,000 50 to 704 100% 25 years Very large more than more than 704 100% 25 years 7,0002) Fulfillment of certain objectives in line with economic policy2.1. Percentage of investment to be deducted from taxesObjectives include: employment creation; domestic added value creation; export growth;decentralization or location outside Montevideo; clean technology use; increase in research,development and innovation; impact of the project on the economy.Each objective is assigned a score between 0 and 10. Each project size according to theinvestment amount, weighs differently for each objective, and there is a maximum score for eachsize.2.2. Maximum timeframe for tax deductionFor the small size projects, the maximum terms are: three years (1 to 4 points), four years (5 to 7points) and 5 years (8 to 10 points).The maximum term for projects of very large economic significance is 25 years. For medium andlarge projects, the maximum term is calculated by applying the ratio between the points obtainedand the maximum possible points (a higher score provides a longer term for deductions).After the end of the term, non-deducted benefits are lost.If the company does not initially have taxable income, the deduction remains on hold until taxableincome is obtained for a maximum of four years.The term is in effect from the first year the company has taxable income, starting in the fiscal yearthe project was presented.A detailed explanation regarding score calculation and other requirements can be found at:www.mef.gub.uy/comap_reg_actual.php and www.mef.gub.uy/comap_circulares.php.46Other exemptions45 Source: developed in house based on decree 455/007. To determine the dollars column, UIs were calculated at UYP 2.0916 andthe exchange rate at UYP 20.807 (31 August 2010), according to www.ine.gub.uy, price and wage indices. The maximuminvestment amount for small projects is USD 351,800 using the indicated exchange rates.46 Tax Bureau query no. 5172 of 23 December 2008 clarifies certain specific application aspects.28
  29. 29. Exemption on IP capital tax on movable fixed assets during the productive life of these assets. For civil works projects, the exemption period is up to eight years if located in Montevideo and up to 10 years if located outside the capital. Import duties and taxes on movable fixed assets are exempt when declared non competitive with national industry by the National Industry Bureau at the Ministry of Industry and Energy. VAT on local purchases of materials and services for civil works projects may be returned (similar to the export system).B – Specific investment promotion system for the Tourism Sector: decree number 175/003.Decree number 175/003 classifies tourism activities into two groups, with different incentives foreach: a) Tourism projects: lodging, cultural, commercial, conventions, sport, recreational, leisure or health activities that entail increasing tourism demand, approved in accordance with law 16,906 and this decree. b) Hotels, apartment hotels, inns, motels and tourism ranches already built or to be built.Under this system, meeting the objectives of decree 455/007 is not required.a) The following are exempted for Tourism Projects for civil works, VAT on local purchases and VAT on imports for the project, IP capital tax for 11 years and 50% of import taxes on these goods. For IRAE corporate income tax, civil works can be amortized over a 15-year period. for equipment, VAT on local purchases and VAT on imports for the project, IP capital tax for 5 years and 50% of import taxes on these goods. For IRAE corporate income tax, civil works can be amortized over a 5-year period.b) The following is exempted for hotels, apartment hotels, inns, motels and tourism ranchesalready built or to be built: for equipment, VAT on local purchases and VAT on imports for the project, IP capital tax for 5 years and 50% of import taxes on these goods.C – Alternative application of the general investment promotion system and specific system forthe Tourism Sector.Exemptions from both systems can be combined (decrees 175/003 and 455/007), which arepresented for comparison purposes in Table A6 in the Appendix.29
  30. 30. Investment exemption system (IRAE corporate income tax)A long-standing system exists in Uruguay known as the Investment Exemption system that isfound in income tax regulations (IRAE corporate income tax that taxes income at 25%).47 Thissystem provides an exemption on IRAE up to 40% for income invested in the acquisition of fixedassets (machinery, equipment, utility vehicles, computer equipment, etc.) and up to 20% ofincome invested in construction or building expansions.48The tourism sector is especially considered since the law states that assets for the furnishing andrefurnishing of hotels, motels, rest stops, and the acquisition of televisions and buses for hotelsare included. In building construction and expansion, hotels, motels and rest stops are specificallymentioned.Exemptions are presented along with tax returns.8.2. Sector regulationsHotels, apartment hotels, inns and motelsThese four categories for tourist establishments are principally regulated by decrees 384/997 (15 thof October 1997) and 210/001 (6th of June 2001).The latter requires hotels, apartment hotels, inns and motels to be registered and authorized priorto operations by the Ministry of Tourism and Sport (MINTUR). Requirements include validmunicipal authorization for the type of establishment (valid for five years) or municipalauthorization in process (in this case, the registry is provisory for an 18 month period).Decree 384/997 establishes the one to five star system for each of the four tourist establishments(except for motels, which have just three levels).Ratings are performed in accordance with parameters established in the decree.49 Servicesrendered by the establishments must be in accordance with the minimum required for the rating.A Rating Commission, which operates under the Tourism Ministry, ratifies or rectifies the rating ofthe establishment and is able to revise it during the period of validity.The classification and rating (stars) must be indicated on all publicity, correspondence, bills andother documentation and must be displayed on a distinctive sign at the main entrance and at thereception area of the establishment. Establishments may not use any denomination or indicationdifferent from what corresponds to its class and rating.47 Amended text 1996, chapter 4, IRAE corporate income tax, valid in accordance with law 18,083 dated 27 December 2006 andIRAE regulatory decree 150/007 dated 26 April 2007.48 In both cases, exempted income may not exceed 40% of net income in the period. If the exemptible amount of the investmentexceeds this percentage, it may be deducted over the following two periods.49 Items from the tourist establishment classification table, decree 384/997 dated 15 October 1997: 1) construction aspects ofrooms, 2) construction aspects of common areas, 3) room furnishings, 4) general furnishings, 5) personal services (i) 6) personalservices (ii), 7) languages and 8) general services. For details:http://www.mintur.gub.uy/images/stories/pdf/hoteles/matriz_hotel.xls.30
  31. 31. See the Tourism Ministry’s website on regulations and decrees for details on the following tourismoperators: travel agencies, organized campsites, hostels, real estate agencies, adventure tourism,rural tourism services and auto rental companies.The Tourism Operators page on the same site offers registry instructions and forms (the samefrom the preceding paragraph, plus Tour Guides and Convention Halls).31
  32. 32. APPENDIXTable A1 – Uruguay: visitors according to lodging Table A2 – Visitors to Uruguay per country ofand length of stay in days, 200950 residence, 2009 (in thousands)51 Arg entina 1,530 72.9% Thous ands Averag e G reater B uenos Aires 1,120 53.4%L odg ing type of vis itors s tay C entral and littoral 231 11.0%Hotel 821 5.5 O ther Argentina 179 8.5%O wn hous e 193 11.9 B raz il 250 11.9% P orto Alegre 66 3.1%R ented hous e 182 10.2 O ther s outhern B raz il 124 5.9%Hous e of S ão P aulo 45 2.1%family/friends 750 7.7 O ther B raz il 15 0.7%C amps ite 42 9.9 P arag uay 47 2.2%None 70 0.5 C hile 63 3.0%Apartment hotel 20 6.5 North Americ a 81 3.9%T ime s hare 3 5.4 R es t of Americ as 27 1.3%O ther 18 5.5 E urope 95 4.5%Total 2,099 7.2 O ther / no data 6 0.3% T O T AL 2,099 100.0%TableA3 – Reasons for visiting Uruguay, 2009 (in Table A4 – Nationality of cruise shipthousands)52 visitors, 2009-1053Vis it family and friends 469 22.3% T hous ands %R ecreation and touring 1291 61.5% B razil 154 52.7%B us ines s and profes s ional reas ons 154 7.3% Argentina 68 23.3%S port 14 0.7% North America 36 12.3%C ongres s , s eminar, s tudy 20 1.0% E urope 16 5.5%Health 11 0.5% O ther Americas 13 4.5%T rans it 89 4.2% O ther / no data 5 1.7%R eligious 5 0.2% T otal 292 100.0%O ther / no data 46 2.2%T O T AL 2099 100.0%50 Source: www.mintur.gub.uy, statistics51 Source: www.mintur.gub.uy, statistics52 Source: www.mintur.gub.uy, statistics53 Source: www.mintur.gub.uy, statistics32
  33. 33. Table A5 - 5 star hotels in Uruguay, 201054 Montevideo Punta del EsteRadisson Montevideo Victoria Plaza Downtown Conrad Punta del Este Resort Punta del Este & CasinoSheraton Montevideo Punta Carretas Solanas Forest Resort PortezueloHotel Belmont Carrasco Mantra Resort-Spa & Casino La Barra Las Cumbres (inn) Portezuelo Villa Roma inn Parque Golf Estancia Vik José Ignacio Fasano Hotel La Barra Department of Colonia Department of SaltoSheraton Colonia Golf & Spa Resort Colonia del Arapey Thermal Resort & Arapey hot Sacramento Spa springsHotel Four Seasons Carmelo Carmelo Horacio Quiroga Thermal Spa SaltoRadisson Colonia Hotel & Casino Colonia del SacramentoTable A6 – Comparison of general (decree 455/007) and tourism sector (decree 175/003)investment promotion systems VAT LOCAL PURCHASES VAT ON IMPORTS IP capital tax Civil works Equipment Civil works Equipment Civil works Equipment Decree VAT credit for VAT credit for VAT exemptions VAT exemption IP tax exemption IP tax exemption 175/003, local purchases local purchases on imports of in import of for civil works for equipment section a - of goods for civil of goods for goods for civil goods for for 11 years for 5 years Tourism works equipment works equipment Projects Decree Not applicable VAT credit for Not applicable VAT exemption Not applicable IP tax exemption 175/003, local purchases in import of for equipment section b - of goods for goods for for 5 yearsHotels, etc. equipment equipment Decree VAT credit for Not applicable 100% exemption 100% exemption Exemption from Exemption on IP 455/007 local purchases of fees and taxes of fees and taxes IP capital tax for capital tax on(regulations of goods for civil (including VAT) (including VAT) civil works movable fixed of law works on imports of on imports of projects for 8 assets for entire 16,906 goods for civil movable fixed years in useful life. article 3) works projects assets declared Montevideo and declared as not as not 10 years outside competitive to competitive to the capital domestic domestic industry industry54 Source: consultations with various specialists. Some hotels are in the process of being rated 5 stars by the Tourism Ministry andfor this reason, this table may differ from Table 2.33
  34. 34. Table A6 (continued) – Comparison of general (decree 455/007) and tourism sector (decree175/003) investment promotion systems 55 IRAE corporate income tax IMPORT TAXES Civil works Equipment Civil works EquipmentDecree 175/003, Civil works can be Equipment can be 50% exemption on all 50% exemption on all taxessection a – amortized over 15 amortized over 5 years taxes on imports of goods on imports of goods forTourism Projects years for civil works equipmentDecree 175/003, Not applicable Not applicable Not applicable 50% exemption on all taxessection b – on imports of goods forHotels, etc. equipmentDecree 455/007 Exemption of a maximum amount and term of 100% exemption of fees 100% exemption of fees and(regulations of 100% of the amount invested and for 25 years, in and taxes on imports of taxes on imports of movablelaw 16.906 accordance with applicable objectives and goods for civil works fixed assets declared as notarticle 3) indicators and project size projects declared as not competitive to domestic competitive to domestic industry industryState institutions supporting the tourism sectorMinistry of Tourism and Sport, Minister: Dr. Héctor Lescano.Rambla 25 de Agosto de 1825 esq. Yacaré S/N, Tel. 1885 100, www.mintur.gub.uy.Municipal governments also have tourism areas or departments.Business institutions related to tourism and real estateAssociation of Hotels and Restaurants of Uruguay (AHRU): www.ahru.com.uyAssociation of Private Construction Promoters of Uruguay (APPCU): www.appcu.orgChamber of Hotel and Tourism Industry of Uruguay (CHITU): www.camtur.com.uyConstruction Chamber of Uruguay: www.ccu.com.uyConstruction League of Uruguay: www.ligaconstruccion.orgReal Estate Chamber of Uruguay: www.ciu.org.uyRural Tourism Society of Uruguay (SUTUR): www.turismoruraluy.comUruguayan Association of Congress Organizers (AUDOCA): www.audoca.comDestination Punta del Este: www.destino-puntadeleste.com.uyPunta del Este Tourism Cluster: www.pacpymes.gub.uy/web/turismoBusiness Chamber of Maldonado: www.camaramaldonado.comRocha Tourism Conglomerate: www.rochaenelmundo.org.uyColonia Tourism Conglomerate. Martín Cuadrado: mcuadrado@coloniaturismo.comDepartmental Tourism Association of Colonia: www.coloniatotal.com.uyMontevideo Tourism Conglomerate. Oscar Iroldi: turmvd@gmail.com<0Web Portal of the Americas: www.portaldeamerica.com55 Source: developed in house based on UNASEP data.34
  35. 35. Uruguay at a glance56 Official name República Oriental del Uruguay (Oriental Republic of Uruguay) Location South America, bordering Argentina and Brazil Capital Montevideo 2 176,215 km . 95% of the territory has soil suitable for agriculture and Surface area livestock activities Population 3.4 million Population growth 0.3% (annual) Per capita GDP US$ 9,458 Per capita GDP (PPP) US$ 13,019 Currency Uruguayan peso ($) Literacy 98% Life expectancy at birth 76 years Form of government Democratic republic with presidential system Political divisions 19 departments Time zone GMT - 03:00 Official language SpanishMain economic indicators 2005 2006 2007 2008 2009 Annual GDP growth rate 7.5% 4.3% 7.5% 8.5% 2.9% GDP (PPP) US$ millions 32,048 34,602 38,235 42,543 43,551 GDP, US$ millions (current) 17,367 20,035 24,262 32,207 31,606 57 Exports (US$ millions), goods and services 5,085 5,787 6,936 9,291 8,551 Imports (US$ millions), goods and services 4,693 5,877 6,775 10,217 7,775 Trade surplus / deficit (US$ millions) 393 -90 166 -926 796 Trade surplus / deficit (% of GDP) 2.3% -0.5% 0.7% -2.8% 2.5% Current account surplus / deficit (US$ millions) 42 -392 -212 -1.502 258 Current account surplus / deficit (% of GDP) 0.2% -2.0% -0.9% -4.7% -0.8% Overall fiscal balance (% of GDP) -0.4% -0.5% 0.0% -1.4% -2.2% Gross capital formation (% of GDP at current prices) 16.5% 18.6% 18.6% 20.2% 19.1% Gross national savings (% of GDP) 17.6% 16.9% 19.0% 17.9% 17.1% Foreign direct investment (US$ millions) 847 1,493 1,329 1,840 1,139 Foreign direct investment (% of GDP) 4.8% 7.5% 5.4% 5.7% 3.6% Exchange rate peso / US$ 24.5 24.1 23.5 20.9 22.5 Reserve assets (US$ millions) 3,071 3,097 4,121 6,329 8,373 Unemployment rate (% of EAP) 12.2% 11.4% 9.7% 7.9% 7.7% Annual inflation rate 4.9% 6.4% 8.5% 9.2% 7.5% Net foreign debt (US$ millions) 8,938 9,157 9,662 8,254 11,12356 GDP data was taken from the IMF; data on foreign trade, FDI, exchange rate, international reserves and foreign debt wasprovided by the Central Bank of Uruguay (BCU); population growth, literacy, unemployment and inflation data comes from theNational Statistics Institute (INE).57 2008 and 2009 data includes a partial estimate of production activity in Free Zones and the information regarding the surveycoordinated with CUTI for software related activities.35
  36. 36. Investor Services About UsUruguay XXI is the country’s investment and export promotion agency. Among other functions, UruguayXXI provides no cost support to foreign investors, both those who are evaluating where to makeinvestments as well as those currently operating in Uruguay. Otoño 08 Our Investor ServicesUruguay XXI is the first point of contact for foreign investors. Services we provide include: Macroeconomic and industry information. Uruguay XXI regularly prepares reports on Uruguay and the various sectors of the economy. Tailored information. We prepare customized information to answer specific questions, such as macroeconomic data, labor market information, tax and legal aspects, incentive programs for investments, location and costs. Contact with key players. We provide contacts with government agencies, industry players, financial institutions, R&D centers and potential partners, among others. Promotion. We promote investment opportunities at strategic events, business missions and round tables. Facilitation of foreign investor visits, including meeting organization with public officials, suppliers, potential partners and business chambers. Publication of investment opportunities. On our website, we periodically publish information on investment projects by public entities and private companies. www.uruguayxxi.gub.uy inversiones@uruguayxxi.gub.uy36

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