Transcript
UruguayA place to invest, live and work.
Why invest in Uruguay?
1. Political and social stability
2. Macroeconomic strength
3. Strategic location and modern infrastructure
4. Favorable business environment
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Uruguay has a privileged geographical location…
UruguayA strategic location, with the best
connections to establish a logistics base in the heart of the richest region in the continent
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…with free access to a large market: MERCOSUR
Access to an increasing and large consumer
market due to our open economy and our integration to the
MERCOSUR
Indicators Uruguay MERCOSUR
Population (million) 3.4 241
Area (sq km thousands) 176.2 11,878
GDP 2011 (US$, billion)
46.7 2,991
GDP per capita 2011 (US$) 13,861 12,400
GDP growth rate2011 (%)
5.7% 3.7%
Source: Uruguay XXI based on data provided by Central Banks and National Statistics Institutes
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Social and political stabilityRanking
Uruguay in South America
Uruguay in the World
Transparency of government policymaking(World Economic Forum 2012)
2 20
Democracy Index(The Economist Intelligence Unit 2011)
1 17
Economic Freedom(Heritage Foundation 2012)
2 29
Political Stability(World Bank [WGI] 2010)
1 49
Index of political and economic transformation(Bertelsmann Foundation 2012)
1 4
Global Peace Index(Institute for Economics & Peace 2011)
1 21
Business Climate Index(Getulio Vargas Foundation & IFO 2012)
1 --
Quality of Living(Mercer Quality of Living City Ranking 2011)
1 77
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Uruguayan GDP (annual growth %)
7.5%%
4.1%
6.5%
7.2%
2.4%
8.9%
5.7%
4.0%
2005 2006 2007 2008 2009 2010 2011 2012J
Between 2005 and 2011 the average annual
growth rate was of 6%
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Uruguay’s sustainable growth
Source: Uruguay XXI based on data provided by the Central Bank of Uruguay and the IMF (WEO September 2011)
Uruguayan GDP per capita (PPP) US$
5,2635,981
7,191
9,351 9,364
11,996
14,672
15,71416,527
17,40918,360
19,362
2005 2006 2007 2008 2009 2010 2011 2012J 2013J 2014J 2015J 2016J
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0%
2%
4%
6%
8%
10%
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1000
1500
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
FDI/GDP (%)
US$ million
FDI FLow FDI/GDP
FDI in Uruguay
Source: Uruguay XXI based on data provided by Central Banks
1.2%
2.4%
4.1%% 4.1% 4.3%
5.4%
7.1%
Argentina Paraguay Colombia Brazil Peru Uruguay Chile
FDI in South America (% of GDP - 2011)
A country that generates and attracts more investment
Leading sources and recipient sectors of FDI2001-2009
23%
9%
6%
5%
3%
Cattle raising, agriculture and
forestry25%
Construction23%
Manufacturing industry
12%
Financial brokerage
9%
Trading5%
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12000
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Bienes Servicios
Exports of goods and services(US$ million)
Exports of goods Exports of services
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…with increasing exports…
Source: Uruguay XXI based on data provided by the DNA and BCU (Balance of Payments)
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Tourism64%
Logistics19%
IT5%
Other company services
5%
Financial services
4%
Other3%
Meat17%
Soy10%
Wood pulp10%
Cereals10%
Dairy products
9%
Automobiles Auto parts
6%
Wood products
4%
Plastics, 3%
Wool, 3%
Fur, 3%
Milling products
3%
Other21%
…and increasing access to more markets9
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• 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)
Modern infrastructure
USA Spain Uruguay Hungary Chile ItalyNew
Zealand Brazil Argentina Paraguay
32 34 35 37 39 42 47 69 96 117
Quality of Electricity Supply (ranking)
Source: World Economic Forum, Global Competitiveness Report 2010-11
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Source: World Economic Forum, Global Competitiveness Report 2011-12. Ranking for 142 countries
Leading country in communications
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Uruguay
Brazil
Chile
Argentina
19
47
66
Mobile telephone subscribers
(ranking)
70
Chile
Uruguay
Brazil
Colombia
53
56
61
Internet subscribers
(ranking)
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
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Uruguay: A competitive country to do business
The Global Competitiveness Index 2012
Highly Competitive
Slightlycompetitive
Source: Uruguay XXI based on The World Economic Forum, Global Competitiveness Index 2012
Chile
UruguayPeru Colombia
Argentina Ecuador
Bolivia
Paraguay
Venezuela
Brazil
Third place in South America63rd position in the Global Ranking
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Tertiary Education Enrollment(ranking)
USA 6
Spain 18
Argentina 21
Uruguay 25
Ireland 33
UK 36
Chile 38
Switzerland 51
Brazil 68
Paraguay 76
Source: The World Economic Forum. The Global Competitiveness 2011-12
Adults Literacy Rate (%)
Ireland 99.0
Switzerland 99.0
UK 99.0
USA 99.0
Chile 98.6
Uruguay 98.3
Argentina 97.7
Spain 97.7
Paraguay 94.6
Brazil 90.0
Source: United Nations, Human Development Reports 2011
• The State provides free education up to and throughout College and invests 4.5% of its GDP in education
• 100% of high school students have completed at least three years of English and two years of Computer Science
• 21% of university students are developing careers on Accounting, Finance and Business Administration
• 17% of university students are developing careers in Science and Technology
High educational level13
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Highly competitive human resources
Total annual labor costs in Uruguay (US$):
Source: Uruguay XXI based on data from Advice and PwC, February 2012
Comparison of net annual salaries:
Seamstress 6,600
Junior mechanic
12,200
Systems Manager
88,500
HHRR Manager
89,000
Production Manager
104,100
Financial Manager
107,900
Business Manager
114,200
Chief Executive
192,600
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Investment Promotion
• 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 establishingobjective criteria for granting tax exemptions, this was successfully accomplishedthrough an efficient, transparent, simple and non-arbitrary mechanism
Complete legal framework for investments
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• 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%
Tax benefits
* Corporate Income Tax exists only at national level (25%)
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Investment Promotion
• To be eligible for the benefit, companies must attain at least 1 point, ensuring a floor of 20% exemption from Corporate Income Tax
Calculating formula for the Corporate Income Tax benefit
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Total weighted score Exemption
2 29%
4 47%
6 64%
8 82%
10 100%
Investment PromotionFa
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• 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
Other tax benefits
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Investment Promotion
Industrial Parks19
• The users of industrial parks are eligible for the benefits specified in Law 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
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Investment Projects
295
177
485
1058
1290
1150
1429
61 63 75
313
393
833 852
2005 2006 2007 2008 2009 2010 2011
US$ million
Number of projects
Projects approved by the Commission for the Implementation of the Investment Law (COMAP)
In the last five years, the amount of projects presented to
the COMAP multiplied by ten
Agriculture10%
Commerce32%
Industry 21%
Services 30%
Tourism 7%
Projects approved by sector (2011)
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•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.Fa
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Temporary Admission(similar to the drawback regime)
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Free Zones
• Users 100% exempt from:
• 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.
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• Only free ports on South America’s Atlantic coast
• Free transit of goods, no authorizations or formal procedures are required
• Within port facilities, goods are exempt from:
oall import taxes or charges
oall 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
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Foreign companies present in Uruguay
In summary
These are exciting times for Uruguay:
• Our economy is growing
• Investments are flowing
• We are carrying out many innovative programs
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Thank you!
URUGUAY XXI
www.uruguayxxi.gub.uy
invest@uruguayxxi.gub.uy
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