Trend to investing in Uruguay
Investing in Uruguay is becoming a trend again. Short term investments and purchase of land are some of the biggest types of investments lately in Uruguay.
Investing in Uruguay has many advantages that prospective investors need to know. There is a tradition of respect for the law and private property in Uruguay. This sets up an ideal investment scenario in both rural and urban areas. Improvement in infrastructure, communication and technology have been significant in recent years as well. This process has created a new quality and advantage for investing in Uruguay. For instance, the agricultural business model has been largely developed in the last 6 years in two main areas: Soybean and Forestry.
Ranking by Regions
If we rank investing in Uruguay by area and regions, Montevideo clearly has taken the first place.
San Jose, north from Montevideo with a steady growth in the last 5 years appears in the second place. The third position is for the entire region of Maldonado. Then fourth is Canelones where investments have been largely diversified in the last 2 years. The fifth and sixth place belongs to Lavalleja and Soriano.
Type of Investments
Investments differ in each region. While in some places, like Soriano, the focus is on the extraction and export of commodities, in others such as San José and Canelones, companies generate added value to the product and provide work for the local workforce.
In Montevideo, the increased flow of investments are linked to the port, logistics, software and financial services to international companies. Many of them are located in the free trade zones: Zonamerica, Aguada Park and now the new Free Zone WTC group.
Meanwhile in San Jose, the main investments are in the automotive sector with companies like Effa (assembling parts) and Takata (which manufactures airbags and seat belts).
In Maldonado the strong foreign investments are still focusing on Real Estate. So far in 2014, there are 400 thousand square meters under construction. Regional investors still choose Punta del Este as the best investment place. The northeastern areas of Maldonado are clearly the new developing regions and have been discovered and turned into profitable businesses such as the olive oil production.
Canelones has several chemical pharmaceuticals businesses such as Urufarma, Mega Pharma and Calister among others. The western zone of Canelones on Route 5 concentrates on industrial manufacturing of plastic and leather.
Another business that captures the interest of the investors is farming in the region of Soriano. The preferred crops are soy, corn, wheat and barley.
Colonia & Rio Negro
Colonia and Rio Negro are also an area of interest for investors in land for crops. The land in this region is very fertile and has the right amount of rain to grow crops. The Rio Negro has been putting itself on the map with excellent Caviar production, Blackriver Caviar is sold world wide as prime caviar.
New Law is helping to Invest in Uruguay
The great stimulus to attract foreign investors was the 2007 Investment Law that offers tax breaks to companies who decide to invest in Uruguay.
The new law benefits companies that create jobs, increase exports and invest in research, development and innovation to increase domestic value added which are among some other requirements. This includes the trade and service sectors that capture intensive labor (previously only included was agriculture business and industry).
Moreover, the law provides greater access to small and medium enterprises, since the process for the amount of documentation was simplified and decreased. The process is not only easier but also less expensive.
This growth has not been achieved by accident. To maintain the investments in Uruguay it has been necessary to promote the synergy between companies operating in the country.
There have been other processes as well, the organization of capital using different production lines and new strategies to place the production in the market and abroad.
Along with this, foreign investment funds, that group shareholders worldwide, allocating capital for the acquisition of land for the production of commodities and agricultural marketing is clearly a new process in Uruguay and there is yet more to come.
For information on land investment or Real Estate in Uruguay please contact us.
Mary Ann Thompson