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Presentation invest-in-uy-uyxxi Presentation invest-in-uy-uyxxi Presentation Transcript

  • UruguayA place to invest, live and work.
  • 2Why invest in Uruguay? 1. Political and social stability 2. Macroeconomic strength 3. Strategic location and modern infrastructure 4. Favorable business environment
  • 3 Uruguay has a privileged geographicalStrategic 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 View slide
  • 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 View slide
  • 5 Social and political stability Uruguay in South Uruguay in the Ranking America World Transparency of government policymakingSocial 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 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 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 …with increasing exports… 14000 Exports of goods and services 12000 (US$ million) Bienes Servicios 10000 8000Macroeconomic 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 …and increasing access to more marketsMacroeconomic strength
  • 10 Modern infrastructureStrategic 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 Leading country in communicationsStrategic 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 Uruguay: A competitive country to do businessFavorable 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 High educational levelFavorable 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 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 Investment Promotion Complete legal framework for investmentsFavorable 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 Investment Promotion Tax benefitsFavorable 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 Investment Promotion Calculating formula for the Corporate Income Tax benefitFavorable 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 Investment Promotion Other tax benefitsFavorable 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 Industrial Parks • The users of industrial parks are eligible for the benefits specified in LawFavorable 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 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 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.
  • 22 Free Zones • Users 100% exempt from:Favorable business environment • Corporate Income Tax (IRAE) • Wealth Tax • Import Tariffs • Any other created tax, or that might be created in the future * • Users may develop industrial, commercial or service activities • Business parks focused on technology and services which operate in Montevideo: • Aguada Park • Zonamérica • Parque de las Ciencias • WTC Free Zone * Companies which operate under the free zone regime must pay social security taxes for their Uruguayan employees.
  • 23 Free Ports and Airports • Only free ports on South America’s Atlantic coastFavorable 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
  • 24Foreign companies present in Uruguay
  • 25 In summaryThese are exciting times for Uruguay:• Our economy is growing• Investments are flowing• We are carrying out many innovative programs
  • Thank you! URUGUAY XXI www.uruguayxxi.gub.uyinvest@uruguayxxi.gub.uy