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Doing Business in Uruguay

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Doing Business in Uruguay Doing Business in Uruguay Contents Presentation 4 Foreword 6 Country overview 7 Strategic location in the region 12 Respect for legal clarity 13 High human resource quality 16 An open economy 19 Foreign trade 24 Investment framework 27 Foreign investment 32 Tax system 36 Investment promotion 41 Social security and labour regulations 45 Accounting and audit requirements 50 Main indicators of the economy 52 Hints for the business visitor 54 Contacts 58 Presentation The República Oriental del Uruguay, hereafter referred to as Uruguay, is a small country both in size and population. Its culture, health and living standards, are among the highest in Latin America. 4 Doing Business in Uruguay 2014 Uruguay’s economy is based on the free enterprise principles while it has a number Uruguay offers significant advantages to We are confident that this latest edition of of state-owned those who are currently evaluating doing Doing Business in Uruguay will be of entities engaged in business and making investments in South assistance for executives considering direct America. In this guide we address the or indirect investment in our country. public services and factors that make Uruguay a preferable business activities. location for those looking for centres for The content of this material is also contacts, shared services, logistics, available at www.pwc.com.uy. distribution, and regional treasury facilities. We welcome the opportunity to assist you with any questions or matters related to PwC has had a continuous presence in doing business in Uruguay. Uruguay since 1920. Throughout these years we have earned a solid reputation for excellence and distinctive services, From 2003 onwards the flow of foreign making us one of the leading firms in direct investments has dramatically audit, tax and business advisory services in increased in different sectors of our Uruguay, serving prestigious local and economy, especially in Forest & Cellulose- foreign companies and individuals with two state-of-the-art plant mills with established in the country. Our purpose is large scale of production-, Transport and to build trust in society and solve Logistics , Telecommunications important problems. ,Information Technology, Retail & Consumer, Energy and Agribusiness. Oil & Our solutions are designed to meet the Gas prospecting has started in the specific needs of each client by using a maritime platform and large scale of multidisciplinary team and comprehensive Mining activities is nowadays being approach, adding relevant value in the way debated. our clients perceive it. Foreign companies as well as foreign Maintaining and building on our position investors are welcome and enjoy the same of leader depends on our ability to create José Luis Sablich opportunities as local competitors. Cross and sustain real differentiation from our Territory Senior Partner border investments are encouraged. competitors, creating a distinctive firm. [email protected] 2014 Doing Business in Uruguay 5 Foreword This Guide has been prepared to provide information on doing business in Uruguay. While the Guide covers a broad range of topics, it is not intended to provide comprehensive coverage and does not constitute professional advice. For specific questions, it is necessary to refer to the laws, regulations and decisions and/or to seek appropriate advice. The materials contained in this Guide were assembled in the last quarter of 2013 and, unless otherwise indicated, is based on the information available at that time. 6 Doing Business in Uruguay 2014 Country overview 2014 Doing Business in Uruguay 7 Localisation and weather Uruguay is located in South America with coasts on the Atlantic Ocean, between Brazil and Argentina. It has a land surface area of 176,215 km2 and a total area of 318,413 km2 when considering rivers and territorial waters. The country is divided geographically into 19 states (“departamentos”) with Montevideo as its capital. The largest cities are Montevideo, Salto and Paysandú, last both on the shore of Rio Uruguay, the river that is the border line with Argentina. It is the only South American country that lies entirely in a temperate zone. Due to this, it has small variations in temperature, precipitation and other climatic factors. There are no remarkable topographic features. Most of the country consists of gently undulating plains crossed by long rivers. The climate is mild and healthy throughout the year. Temperatures average 62° to 82°F (17° to 28°C) in summer and 42° to 57°F (6° to 14°C) in winter. Rainfall occurs in all seasons but is generally heavier in the autumn months. Its weather and topographic is especially suitable for agriculture, forest and livestock production. Population and language According to the last census (2011), the population of Uruguay is a bit more than 3.2 million. Approximately 95% of the whole population lives in urban areas – about 60% live in Montevideo and its surrounding areas. There is no indigenous population; most Uruguayans are descent from Europeans (mainly Spanish and Italian). Spanish is the official and most used language. English is the most used foreign language by the business community. Currently, Portuguese is also widespread as a result of having a long border with Brazil and because of the trade and tourism between both countries. Political system and government Uruguay has long standing traditions of democracy and legal and social stability and a solid financial and legal framework that is attractive to foreign investors contemplating business ventures in the region. Politically, Uruguay has a democratic republic system, with a presidential regime and three consolidated political parties. The government is divided into three independent branches: Executive, Legislative and Judicial. The Executive Branch is administered by the President of the Republic, who acts together with the Vice President and the Ministerial Council. The President and the Vice President are elected through universal, popular, direct vote and the Ministers are designated by the President. 8 Doing Business in Uruguay 2014 The Legislative Branch consists of the General Assembly, which includes the Vice President, a 30-member Chamber of Senators and a 99-member Chamber of Representatives. Parliamentary elections are held at the same time as presidential elections (last Sunday of October every five years – last election was held on 2009). Uruguay has a two-round system for Presidential elections. In case the candidate for President with more votes in the election of last Sunday of October does not reach the 50% plus one of the valid votes, then there is a runoff with the second most voted candidate, on the last Sunday of November of the same year. The President, Vice President, Senators and Representatives serve a five-year term. The Vice President, the Senators and the Representatives can be consecutively re-elected, but the President can not. The Judicial System is administered by the Judicial Power, one of the three State Powers. Its jurisdiction is national. It is divided in Courts and Tribunals. The system adopted for the judiciary is the collegiate one for higher organisms (Supreme Court of Justice – the highest hierarchy Justice Body and Appeal Tribunals) and the one-man system for the lower organisms (Courts and Peace Courts). State governments are elected in a separate election from the Presidential and each state chooses its own public authorities. Each state has an “Intendente” (Governor) and a Legislative Branch of 30 members, where the majority (at minimum) belongs to the party of the Governor that has won the state election. Living in Uruguay In Uruguay people enjoy a safe, peaceful and healthy environment. Public meetings take place peacefully. Traffic in vehicles, even in urban centres, is fluid. Montevideo can be crossed by car from one end to another in just an hour, at any time of the day. Cities have large green spaces, and because of the continuity of the wind and the absence of polluting industries, there is no pollution. Epidemics of any kind are practically non-existent. The distances to access recreational areas (e.g. the countryside, beaches and shores of rivers) are short. The most popular resort town (Punta del Este) is 140 km east of Montevideo. All major cities are connected by routes that have origin in Montevideo (South – North). Also there are some important routes that cross the country East – West. The national sport is soccer. There are many private clubs where to practice sports, including golf, tennis, soccer, rugby, squash, etc. There is also cultural activity which results in an adequate range of theatres, cinemas and music shows. 2014 Doing Business in Uruguay 9 Why Uruguay? A summary Its location, infrastructure and natural conditions enable complete and easy access to the of Uruguay’s largest economies in the region. advantages for A tradition of respect for political, social and economic freedom, as well as solid institutions, ensures a stable framework. investors Uruguayans are family oriented and human relations often play an important role. According to the 2013 Legatum Prosperity Index, Uruguay is the best place to live in Latin America. It is ranked 30, ahead of Chile, Argentina and Brazil. The ranking is based on a variety of factors including wealth, economic growth and quality of life and it covered 142 countries, 96% of the world’s population and 99% of the world GDP. Additionally, Uruguay ranks as one of the safest countries in Latin America (with Chile and Costa Rica) regarding the Latin Security Index that measures security for multinational executives, index developed by FTI Consulting for Latin Business Chronicle. According to the 2013 Global Peace Index, that rank 162 countries by measuring security in society, the extent of conflict and the degree of militarisation, Uruguay is in first position in Latin America and 24 globally. Also Uruguay maintains a “high” level of human development, ranking in 2013 among the top three in the region and 51th worldwide, according to the United Nations index that each year reflects the quality of life in different countries.
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