In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
Traditionally low, FDI inflows in Uruguay increased rapidly and regularly in the recent years, reaching 6% of the country GDP in 2008. They petered out for a year under the effect of global recession and have been progressively recovering since 2010. In 2013 FDI reached USD 2.7 billion. The government extended its economic plan of the previous years in 2013, which reassured the business environment by prudent budget and monetary policy, accompanied by a structural reforms program aiming to attract foreign investments.
Foreign investors benefit from the same rights and fiscal incentives as local investors. Foreign investments enjoy a total freedom in Uruguay and they are not subject to any declarations and there is not a limit regarding the transfer of profits or repatriation of capital. Uruguay is a member of MIGA, the Multilateral Investment Guarantee Agency and also a member of the International Arbitration Center in relation to investments that depend from the World Bank.
Foreign investment are attracted to the country's political stability, business climate and a skilled workforce.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Uruguay||Latin America & Caribbean||United States||Germany|
|Index of Transaction Transparency*||3.0||4.0||7.0||5.0|
|Index of Manager’s Responsibility**||4.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||5.0||5.0||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||2,504||2,687||2,796|
|FDI Stock (million USD)||15,147||17,547||20,344|
|Performance Index*, Ranking on 181 Economies||39||-||-|
|Potential Index**, Ranking on 177 Economies||72||-||-|
|Number of Greenfield Investments***||25||14||24|
|FDI Inwards (in % of GFCF****)||28.4||24.4||22.5|
|FDI Stock (in % of GDP)||32.6||35.2||36.1|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
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Last Updates: October 2014