10 Jan 2019
Uruguay: Market Profile
- A coastal country in southern South America, Uruguay borders Brazil to the north and Argentina to the south. The country’s strategic geographical location, coupled with its world-class logistics and technology infrastructure, has made Uruguay a trading hub in the South American continent. Its well-developed rail network, dense road network and free ports have connected the country with the 600 million-strong, US$5.5 trillion Latin American market.
- Uruguay, with arable land accounting for about 90% of its territory, has successfully turned its natural resource blessings into quality-driven agricultural business. Thanks to advancement in geo-referencing and traceability systems, Uruguay is reportedly producing food for 28 million people, reaching markets such as the US, the UK, Canada, Italy, Spain, Germany, Hong Kong, and South Korea, and is expecting to pass the 50 million customer mark in the near future. Cattle, poultry, honey, citrus and vineyards make up the majority of its agricultural products.
- Being a member of the Southern Common Market (MERCOSUR), Uruguay’s products, except for sugar and automotive products, enjoy duty-free access to Brazil, Argentina and Paraguay. MERCOSUR aside, Uruguay has signed an array of preferential trade agreements independently or as a member of MERCOSUR, with trading partners such as Bolivia, Botswana, Chile, Colombia, Cuba, Ecuador, Egypt, India, Israel, Lesotho, Mexico, Namibia, Peru, South Africa, and Swaziland.
- Among Latin American countries, Uruguay has topped many international organisations’ rankings, such as the World Bank with respect to political stability, rule of law and corruption prevention. Uruguay’s social and political stability and highly-educated, multilingual (English, Portuguese and Spanish) workforce, in particular, have provided a favourable environment for business, especially in the service sector, such as near business process outsourcing (BPO) and knowledge process outsourcing (KPO) operations, which are said to have accounted for more than half of the country’s GDP in 2017.
- On the back of the country’s business-friendly investment regime with generous investment incentives, Uruguay has been an increasingly popular destination for foreign direct investment (FDI), which accounts for more than half of the nation’s GDP, far higher than the world average. Foreign investors are eligible for national treatment and support, including a simple national taxation system, free movement of foreign exchange, zero restrictions on profit repatriation, free port, free airport, industrial parks. Foreign investors may participate in public-private partnership (PPP) projects in priority sectors, such as green energy, transportation (roads, rail, ports, airports), waste management and social infrastructures (health centres and public housing). More information on the investment environment and the relevant regulations can be found at Uruguay’s investment promotion agency, Uruguay XXI.
- The stock of FDI to Uruguay amounted to US$30 billion in 2017. According to the mainland Ministry of Commerce (MOFCOM), China’s total stock (flows) of FDI in Uruguay exceeded US$225 (US$49) million as of the end of 2016, up from US$2 (US$0.5) million in 2007. Investment from Hong Kong, however, has remained minimal.
Source: Hong Kong Trade Statistics, Census & Statistics Department