Due to Uruguay’s social and political stability, the country is positioned as a safe and friendly economy to do business in. Likewise, Uruguay’s inhabitants enjoy a high level of equality and it’s Per Capita Income (PCI) is relatively high compared to other Latin American nations. The country has also made important progress in tax regulations that have stimulated foreign investment over the last decade.
Learn about the business opportunities in Uruguay and why the fastest-growing economy in Latin America can be your next business destination.
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Trade agreements stimulate Uruguay’s business opportunities
Foreign executives expanding in Latin America must take advantage of business opportunities in Uruguay driven by trade agreements with other major economies in the region.
Trade agreements are essential to foreign companies as they stimulate favourable trading conditions, businesses expansion and decrease unemployment rates. Likewise, members have a greater incentive to do business and invest in new markets.
Uruguay is an official member of multiple trade agreements, including Mercosur and The Andean Community of Nations.
Uruguay is considered as a regional hub with a strategic location to access other economies in South America, supported by its membership to Mercosur. The Southern common market known as Mercosur was founded in 1991 by Argentina, Brazil, Paraguay, Uruguay and Venezuela. This trade bloc seeks to create a free trade environment, stimulate investments and the fluid movement of goods.
The citizens of Mercosur countries have the right to free movement, residence, and employment within the member countries. Likewise, citizens have the privilege of free transportation of goods, services and money, as well as equal labour rights. Mercosur allows companies established in this region to access a significant population with limited fees and duties. The creation of this commercial bloc is one of the main contributions to the improvement of economic growth rates in Uruguay and other member countries.
The Andean Community of Nations
The Andean Community of Nations is a regional bloc made up of four countries: Bolivia, Colombia, Ecuador, Perú. However, Argentina, Brazil, Chile, Paraguay and Uruguay act as associate members of this community.
The Andean Community of Nations intends to achieve a comprehensive, balanced and developed environment, through greater regional integration. Thanks to this agreement, companies from member and associated countries can do business in a more friendly commercial environment and enjoy multiple benefits, increasing business opportunities in Uruguay.
Agriculture market in Uruguay
Agriculture and agri-industry account for 12% of Uruguay’s GDP, and for about 70% of total exports. Uruguay’s land offers many opportunities for foreign agriculture-focussed companies seeking to expand and innovate with their agribusiness practices in Uruguay. Uruguay’s key value chain is mainly based on:
- Citrus fruits (oranges, lemons, and grapefruits).
- Deciduous fruits (apples, pears, peaches, and nectarines).
The factors driving the Uruguayan agricultural market are the big fertile land and government policies that ensure no limitations or restrictions on the export of agro-industrial goods.
Uruguay’s strategic geographic location
Uruguay has an advantageous geographic location. The country’s coast allows it to host maritime trade. Uruguay has the port of Montevideo, which is one of the most important ports in South America. Likewise, the country share borders with 2 influential countries in South America: Brazil, and Argentina.
Furthermore, Uruguay possesses an outstanding infrastructure to support its regional trade and logistics operations by air, earth, and sea. This infrastructure is maintained by a free port, airport access, bonded warehouses, and temporary admission systems.
Trade opportunities combined with its strategic geographic increases business opportunities in Uruguay.
Free trade zones
Free trade zones are very important for the attraction of foreign investment or business activity to Uruguay. They offer various benefits, including:
- Free trade zones are isolated from the rest of the Uruguayan territory. Economic activity is encouraged through several benefits and incentives established by law.
- Free trade zones allow their operators to engage in all types of commercial, industrial and services activities, including marketing, deposit, storage, assembly and disassembly.
- Free trade zone operations are excluded from all national taxes, with the intention to stimulate their business.
- Goods and services coming in and out of the free trade zones remain free of tax, regardless of whether the entity that enters these goods/services to the free zones is local or foreign.
- Free trade zones may be government-run or private. As of today, there is a single state-owned free trade zone, located in the city of Nueva Palmira.
Explore business opportunities in Uruguay with Biz Latin Hub
Taking advantage of business opportunities in Uruguay and Latin America will ensure the success of your expanding company. However, local business environments can be somewhat challenging, especially for foreign executives. It is essential to engage with an experienced and trusted legal provider to support you when incorporating or forming a company in Uruguay.
At Biz Latin Hub, our team of multilingual specialists in Uruguay have expertise on how to facilitate your market entry efficiently and professionally. With our full suite of market entry and back-office services, we are equipped to guide you through the company incorporation process before starting commercial operations in Uruguay. Contact us now to receive personalized assistance.
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