Uruguay’s solid and stable institutional framework gives it an advantageous position to attract investment. In addition to a reputation for social and economic stability, the country offers a suitable framework for visitors, tourists and investors. The Legislative and Executive branches operate in an appropriate manner, judicial institutions act independently and there are no significant bureaucratic costs. Foreign investments are welcomed by people and legislation as well.
Uruguayan economy is evermore open with increasing participation in the international market. Given the size of the domestic economy, exports play a significant role in local development.
Services account for the largest part of GDP. The main sectors in the services industry include retail, transport, communications, financial services, insurance, real estate and professional services. Agriculture and livestock production accounts for 10% of GDP. Nevertheless, its importance on the economy is much greater than this, since the agriculture and livestock sector supplies most of the raw materials for the manufacturing industry, which in turn exports much of its production. Manufacturing accounts for 23% of GDP. The food, leather, textile, chemicals and forestry product subsectors are noted for their size and contribution to exports.
Due to the significant growth in exports, a rising degree of economic liberalization has been observed over the last few years, measured as the coefficient between imports and exports over GDP. Services play a growing role in exports.
Likewise, the country has received much foreign direct investment in various sectors of activity. Long standing traditions of legal guarantees, contract fulfillment and tax benefits for new investments, coupled with a strategic geographic location, high quality of life and safety are the reasons why international investors select Uruguay.
Periodic wage adjustments are established by the Salary Boards, which have been regulated by law and consist of representatives from workers, businesses and the government.
State incomes come principally from taxes collected through the DGI (Dirección General Impositiva) tax bureau. However, surpluses from state-owned companies also contribute to public income. Public spending decisions are made through a budget law that is passed during the first year of each administration and adjustments are made in the following years.
Whichever the political party is in office, a responsible fiscal policy has been the norm, and the primary surplus goals are sought to be in harmony with public debt sustainability. By law,
there is a maximum annual limit for new net government debt.
The Central Bank of Uruguay is a technically, administratively and financially autonomous entity. Its primary objective is currency stability to contribute to economic growth
and employment objectives.
Regulation and supervision of the operations of payment and financial system seek to promote solidity, solvency, efficiency and development.
Uruguay has stable internal prices with single-digit inflation. To achieve currency stability, the Central Bank of Uruguay carries out an inflation policy. As an instrument to achieve this, the Monetary Policy Committee sets reference interest rates for short-term inter-bank loans.
Uruguay has a reliable financial system with excellent liquidity and solvency ratios and low default levels. After the regional financial crisis of 2002, deposits have risen steadily.
Uruguay has a long-standing tradition of recognizing citizens’ rights with regard to social security and labor relations. The literacy rate is very high and nearly all of the population has
access to education, health services, potable water, telephony and electricity.
Recently, Uruguay put into practice an innovative program in IT education, known as the Plan CEIBAL (Basic Computer Technology Educational Connectivity for Online Learning). The program’s objective is to promote social justice through equal access to information and communication tools for all the society. With this objective, internet connected laptop computers are given to all school children in the public school system throughout the country in an effort to make Uruguay the country with the highest connectivity level in the world.
There are no ethnic or religious conflicts and public safety rates are better than the regional average.
In environmental matters, Uruguay has quality standards recognized over the world.
Some indicators that reflect the quality of life of Uruguayan society are as follows:
- Uruguay has the most progressive income distribution in Latin America.
- Life expectancy: 76 years
- Qualified labor force: 1 in 3 workers have technical or university training.
- Literacy rate: 98%
- Doctors per 100,000 inhabitants: 365
- Infant mortality per 1,000 births: 13
- Uruguay is tobacco smoke free (6th in the world and 1st in South America)
Economic stability, adherence to general economic principles, transparency and respect for contracts are the traditional qualities of the Uruguayan political system and transcend the
specific programs of various administrations.
Foreign investors may carry out any type of activity under the same conditions as local investors. In certain industry sectors, foreign investors can perform activities under public concession agreements.
The tax system is neutral with respect to foreign investment. No prior authorizations are required to make investments, except for environmentally-related permits. The country has an attractive investment promotion system that grants specific guarantees to the investor, denoting a high degree of commitment by the government.
Legislation also expressly establishes tax privacy.
There are no limits on capital repatriation or profit transfer and no permits are required.
The currency exchange market is free and has no limits on foreign currency trading. Investments can be made in any currency.