4. 4
Uruguay has a privileged geographical
Strategic 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
5. 5
…with free access to a large market:
Strategic location and modern infrastructure
MERCOSUR
Indicators Uruguay MERCOSUR
Access to a large and Population (million) 3.4 276
growing consumer market
due to our open economy Area (sq km thousands) 176.2 12.795
and our integration to the GDP 2011
46.7 3,307
MERCOSUR (US$, billion)
GDP per capita 2011 (US$) 14,213 11,982
GDP growth rate
5.7% 3.7%
2011 (%)
Source: Uruguay XXI based on data provided by Central Banks and National Statistics Institutes
6. 6
Social and political stability
Uruguay in South Uruguay in the
Ranking
America World
Transparency of government policymaking
Social 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)
7. 7
Uruguay’s sustainable growth
Uruguayan GDP (Annual Variation in %)
Macroeconomic strength
Between 2005 and 2011
the average annual
growth rate was of 6%
Uruguayan GDP per capita (PPP) US$
Source: Uruguay XXI based on data provided by the Central Bank of Uruguay and the IMF (WEO September 2011)
8. 8
A country that attracts more FDI
FDI in South America (% of GDP - 2011)
Macroeconomic strength
US$ millions FDI in Uruguay FDI/GDP (%)
Leading sources and recipient sectors of FDI
2001-2010
2500 8%
2289
2191
2106
2000
6%
FDI FLow FDI/GDP
1529 Cattle Raising,
1493 Construction Agriculture and
1500 1329 Forestry
24%
23%
4%
1000 847
Manufacturing Financial
Industry Brokerage
2% 11% 8%
500 416
297 332
194
Hotels and
restaurants
0 0% 6%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Uruguay XXI based on data provided by Central Banks
9. 9
…with increasing exports…
Exports of goods and services
(US$ million) Exports of services
Macroeconomic strength
Financial
Other services Other
company 4% 3%
services
5%
IT
5%
Logistics
19%
Tourism
64%
Source: Uruguay XXI based on data provided by the DNA and BCU (Balance of Payments)
10. 10
Exports by destinations Exports of goods
Macroeconomic strength
Brazil
Other Meat
China 21% 17%
Argentina
Milling Soy
Russian Federation
products 10%
Venezuela 3%
Fur, 3%
Germany Wood pulp
Wool, 3%
10%
United States of America Plastics, 3%
Spain Wood
products
Cereals
Paraguay 4%
10%
Automobile Dairy
Mexico products
s Auto parts
6% 9%
0 500 1000 1500 2000
Source: National Customs Administration
11. 11
…and increasing access to more markets
Macroeconomic strength
12. 12
Modern infrastructure
Strategic 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
13. 13
Leading country in communications
Strategic 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
14. 14
High educational level
Favorable 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
15. Highly Competitive Human Resources
Best Value For Money
Comparison of Net annual wages costs: Total Annual Costs for a Business in
Uruguay (US$):
Customer
Service 8,800
3. Strategic Location
Executive
Accounting
12,800
Assistant
Systems
86,273
Manager
HHRR Manager 86,610
Financial
112,720
Manager
Production
115,199
Manager
Business
124,030
Manager
CEO 189,336
Source: Own compilation based on data from the Wages Council and the PwC Remuneration Survey, February 2012. Uruguay = 100
17. 17
Investment Promotion Regime
Complete legal framework for investments
Favorable 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 one-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
18. 18
Investment Promotion Regime
Tax benefits
Favorable 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%)
19. 19
Investment Promotion Regime
Calculating formula for the Corporate Income Tax benefit
Favorable 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%
20. 20
Investment Promotion Regime
Other tax benefits
Favorable 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
21. 21
Industrial Parks
Favorable business environment
• 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
contributions 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
22. 22
Track record of Investment Projects
Projects approved by the Commission for the Implementation of the Investment Law
(COMAP)
Favorable business environment
Projects approved by sector (2011)
In the last five years, the
amount of projects presented to
the COMAP multiplied by ten
23. 23
Temporary Admission
(Export incentive)
Favorable business environment
• Temporary Admission is the introduction into the country of
certain goods (raw materials, inputs, intermediate products,
etc.) relieved totally from payment of import duties and
taxes, with the specific purpose to be re-exported within 18
months, after having been subject to certain value added
process, with effective occupation of labor.
• The Temporary Admission regime also applies to machinery
and equipment from any source, entering temporarily for an
specific use, maintenance, repairing or upgrade.
24. 24
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.
25. 25
Free Ports and Airports
• Only free ports on South America’s Atlantic coast
Favorable business environment
• 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
26. 26
Uruguay – Japan Trade
Some Japanese Projects in Uruguay
27. 27
Trade Balance Uruguay-Japan
U$S millions
140
120
Uruguay - Japan
100
Exports
80
Imports
60
Trade Balance
40
20
0
2009 2010 2011 January - September
2012
-20
Source: National Customs Administration
Note: statistics include goods in transit
28. 28
Main Exported Products
U$S million
Code Product Description 2012
2009 2010 2011 (January -
September)
Uruguay - Japan
3302 Odoriferous substances or odoriferous substances-based mixtures 72,73 100,27 72,98 56,67
3824 Agglutinating preparations for molds or foundry cores 5,67 10,80 7,94 5,79
5105 Combed or carded wool and fine or ordinary hair 2,42 3,60 4,81 2,62
1505 Wool and its derived oily substances, lanolin 1,34 2,51 1,36 2,08
0303 Frozen fish 0,24 1,62 0,92 0,65
2402 Tobacco, cigarettes or substitutes 0,20 0,19 0,38 0,28
2009 Fruit juices, unfermented and without alcohol 0,00 0,00 0,24 0,23
1201 Soya beans 0,00 0,00 0,05 0,13
2309 Animal feeding preparations 0,13 0,14 0,14 0,10
2204 Fresh grapes wine 0,02 0,03 0,02 0,09
Sub Total 0,62 0,71 2,33 0,54
Total 83,39 119,89 91,18 69,18
Source: National Customs Administration
Note: statistics include goods in transit
29. 29
Main Imported Products
US$ million
2012
Code Product Description 2009 2010 2011 (January -
September)
Uruguay - Japan
4002 Synthetic rubber and factitious rubber derived from rubber oils 8,40 19,71 17,96 15,59
8703 Tourism automobiles and other vehicles designed to transport people 18,90 22,08 16,19 8,42
9018 Medicine, surgery, dentistry or veterinary instruments and apparatuses 2,24 2,21 1,81 3,00
4011 New rubber tires 3,22 3,21 4,33 2,89
8443 Printing devices and printing auxiliary machines 2,66 3,55 5,13 2,71
3926 Plastic products 1,60 1,96 2,60 2,68
8525 Radiotelephony, radiotelegraphy, broadcasting or television transmitters 0,50 0,67 0,74 2,52
8711 Motorcycles mopeds and velocipedes 2,01 1,57 2,14 1,99
8482 Ball, roller or needle bearings 1,69 1,95 2,21 1,89
0303 Frozen fish 2,00 2,81 2,35 1,71
Sub Total 30,02 34,93 40,66 27,89
Total general 73,24 94,65 96,10 71,29
Source: National Customs Administration
Note: statistics include goods in transit
30. 30
Examples of Japanese companies
present in Uruguay
RICOH Bonset
Japanese companies
Established in 1993 a Regional Plant under construction to produce heat
Distribution Center in Uruguay shrinkable film
Ricoh’s RDC occupies 400 m2 in Total investment: US$ 20 million
Zonamerica Free Zone
Takata Corporation Yazaki
Established in 2006.
Started operations in Electrical harnesses
May 2012
Two plants in Uruguay
Car’s Airbag plant
Total investment: US$ 10 million Total investment: US$ 6 million
400 employees 1,400 employees
33. 33
Regasification Plant
Brief description
International tender for companies interested in the
construction and operation of a LNG Regasification
Plant
Opportunities
Regasification capacity of 10 million cubic meters
expandable up to 15 million.
Construction of breakwaters, piers, floating deposits,
combined unit of storage and regasification
Operation and Construction under BOOT modality
(Build, Own, Operate, Transfer).
Total Investment: US$ 400 million (estimated)
Tender: international
Stage: Until 1st of October 2012 the qualification process will take place. Afterwards offers from the short listed companies
will be received. The tender process will be ending by December 2013 and construction is estimated to be concluded by the
end of 2014.
34. 34
Punta del Este Convention and Trade Fair Centre
Brief description
Public tender for the construction and operation of a
Convention Center and Fairground in Punta del Este
Opportunities
First stage 6,000 m2 expandable up to 18,000 m2
The contractor company will receive:
• Project by Carlos Ott, a well-known Uruguayan architect
with an important international career
• A cash contribution for construction financed by the
Government of up to US$ 23,150,000
• Operation Rights of the Convention Center and Fairground
Total Investment: US$ 40 million (estimated)
Tender: international
Stage: Deadline for bidding 30th of November 2012. Construction starts in
2013.
36. 36
Public Private Partnership (PPP)
PPP Law
Regulatory Framework (PPP)
In July 2011, the Uruguayan Legislative Branch passed the Public Private
Partnership (PPP) law that established the regulatory framework based on
world’s best current practices
PPP Contracts
Contracts of Government with Private companies in which during a limited
time frame the private party is assigned for the Design, Build, Finance and
Operation (DBFO) of an infrastructure project
Type of Projects
Transport Infrastructure: Road Network, Railway, Ports and Airports
Energy infrastructure
Waste treatment & disposal infrastructure
Social Infrastructure: Schools, hospitals, prisons
37. 37
PPP Adjudication Process
Initiative: Studies Bidding:
Evaluation Approval Bidders Offers
Public or Competitive Adjudication
Studies (MEF/OPP) Evaluation Analysis
Private Dialogue
The Technical
Commission
will order the
Launch a public
Any PPP Before offers. With the
bidding process Legal entities The criteria to
procedure may launching a PPP Unit
The Ministry of using any national or evaluate the
start within the project a approval, a
Finance (MEF) competitive foreign. offers is stated
Public technical, legal, provisional
and the Office method. The Accredited in the contract
Administration economic and adjudication will
of Budgeting COMPETITIVE financial and and linked to
but also as a financial be done. After
and Planning DIALOGUE technical quality, price,
private evaluations this the
(OPP) have to method may be solvency timeframe,
initiative. The must be done Tribunal de
approve the used for Incompatibilities costs, technical
private initiative 1- Profile Cuentas
evaluation complex : entities aspects, etc.
has to be 2-Elegibility intervenes and
studies and the projects in involved in the Done by a
presented at 3- Feasibility the winner
bidding bases. order to define project among Technical
CND 4-Value for presents the
technical others. Commission
money missing data.
aspects.
The final adj. is
done.
39. 39
Underway Projects (PPP)
1 Prison System
Brief description
Underway projects (PPP)
Design, construction, equipment and financing as well as
some activities such as cleaning, preventive
maintenance, food, laundry services, parks maintenance
among others for 2,000 prisoners. Health, police services and
rehabilitation of the prisoners will be run by the State.
Initial Investment: US$ 80 million (estimated)
Total Investment: US$ 320 million (in 20 years, estimated)
Tender: international
Term of contract: 22.5 years
Stage: Draft of contract since August 2012 in OPP and MEF for approval. Bidding
process expected soon.
40. 40
Underway Projects (PPP)
22 Highways number 21 and 24
Underway projects (PPP)
Brief description
Rehabilitation and maintenance of 192 km of existing road.
Contract mode: Design, Build, Operate and Transfer.
Initial Investment: US$ 70 million (estimated)
Total Investment: US$ 200 million (in 20 years, estimated)
Tender: international
Term of contract: 20 years
Stage: August 2012 approved by OPP and MEF. Bidding process
expected soon.
41. 41
Underway Projects (PPP)
3 Deep Water Port
Brief description
Underway Projects (PPP)
Design and Build a deep water port (greenfield) in
the coastline of Rocha department.
Increasing demand of cargo transport
Multipurpose port that complements the ports of
the Paraguay - Paraná seaway and the Regional
Ports
Will handle National and Regional Cargo
Total Investment: US$ 1,000 million (estimated)
Tender: international
Stage: June 2012 approved to be eligible by decree 196/012.
43. National Highway Network Road Projects
Increasing traffic of transported tones due to fast development of Agriculture, Cattle and Forestry
sectors. Need to have an efficient connectivity among the producing and transportation terminals.
Opportunities (PPP)
Route 3 North ARTIGAS
BRAZIL
Routes 4 & 31 SALTO
RIVERA Routes 6, 7 & 8
Route 26 PAYSANDÚ TACUAREMBÓ
ARGENTINA CERRO LARGO
RIO NEGRO
DURAZNO TREINTA Y
Routes 21 & 24 TRES Route 14
SORIANO FLORES
FLORID LAVALLEJA Routes 13 & 15
A ROCHA
Colonia and Juan Lacaze COLONIA SAN
port access roads JOSÉ
CANELONES ATLANTIC OCEAN
MALDONADO
Port of Montevideo
MONTEVIDEO
access roads
LA PLATA RIVER
44. 44
Railway
Railway must be refurbished in order to increase competitiveness in cargo transportation. Of the
3,000 km slightly more than 50 % is currently under operation.
Opportunities (PPP)
Required Investment
Segment US$*
Chamberlain - 100,000,000
Algorta - Fray
Bentos
Algorta - 55,000,000
Paysandú -
Salto
Piedra Sola - 15,000,000
Tres Árboles
Toledo - 90,000,000
Treinta y Tres
TOTAL 260,000,000
* Estimated values 2011 - 2015. Source
MTOP.
45. 45
In summary
It is an exciting time to do business in Uruguay:
1.Economy is growing at high and sustainable rates, as well as
domestic and foreign investment
2.We are a safe, reliable and stable country, both socially and
politically, with one of the best per capita GDP in Latin America
3.Our human resources are among the best qualified in Latin
America, and Uruguayan entrepreneurs view the world as their
market, making them ideal partners for joint projects
4.Investment promotion regimes are highly competitive and
profitable.