Austria Uruguay: LatAm s Best Kept Secret 2 Strongest democracy and social and political stability in Latin America Continued growth and investment despite global slump Best labor value for money in the region Highest internet and PC penetration in Latin America New law to make investment even more attractive 1
Gateway to the Region 3 Santiago 1,900 km 72 92 hrs Buenos Aires 250 km Asunción 1,550 km 72 96 hrs Rio de Janeiro 2,400 km 72 96 hrs São Paulo 1,970 km 72 96 hrs Porto Alegre 870 km 24 48 hrs Uruguay: A safe, reliable and competitive location, providing an unbeatable logistics base in the heart of the wealthiest region of 24 hrs Montevideo South America Access to a Large and Wealthy Market Access to a large and growing consumer market due to our membership in MERCOSUR and our open economy 4 Uruguay MERCOSUR Population (millions) 3.3 242 Area (km 2 ) 176,215 11,878,244 GDP 2009 (US$ billions) 31.6 2,144 GDP per capita 2009 (US$) 9,458 8,859 GDP growth rate 2009 (%) 2.9 0 Sources: Central banks and national statistics institutes 2
Political and Social Stability 5 Factor Uruguay in South America Low Corruption (Transparency International 2010) 2 Democracy Index (The Economist Intelligence Unit 2010) 1 Economic Freedom Index (Heritage Foundation 2011) 2 Quality of Living (Mercer Eco City Ranking 2010) 1 Low Cost of Living (Mercer Cost of Living City Ranking 2010) 4 6 Modern Infrastructure World class port facilities in Montevideo, a regional hub par excellence for South America s Southern Cone region Boasts Latin America s most dense highway network 2009: new airport terminal, Colonia ferry port and Montevideo ring road Reliable electric supply (mostly from renewable sources) Quality of electricity supply (ranking) US 23 Ireland 25 Chile 30 Spain 36 Uruguay 37 Hungary 46 Italy 47 New Zealand 56 Brazil 63 Argentina 93 Source: World Economic Forum s Global Competitiveness Report 2010 2011 3
Platform for the Region Movement of containerized cargo in the port of Montevideo 7 Thousands of units 800 700 600 500 400 300 200 100 0 425 455 191 293 210 334 259 273 309 353 519 596 67 75 588 609 402 351 367 2002 2003 2004 2005 2006 2007 2008 2009 2010 Containers TEUS Source: National Ports Authority (ANP) Notes: Includes imports, exports, transit and transfer TEU = twenty foot equivalent unit Goods in transit: 2009: 47.3% 2010: 51.4% One Laptop Per Child (Plan Ceibal) Helping our future workforce eliminate the technology gap Only country in world to meet goal of full countrywide coverage of school age children and teachers Students covered: 380,000 Teachers trained: 18,000 Total free Wi Fi spots in Montevideo: 250 Thanks to the plan, 220,000 households (out of 1,280,000) received dtheir first computer; half of them belong to the poorest 20% of the population 8 4
Quality of Life Free from natural disasters Tolerant country: no ethnic, racial or religious conflicts Excellent sanitary level. Child mortality rate: 9.5 every 1,000 (2009), vs. 22.8 in Latin America (2007) Third safest country in Latin America, evidenced by the booming second home market (Latin Business Chronicle 2009 Index) Ranked among the first countries, with the Scandinavian countries and Japan, in US based Freedom House s Freedom in the World Survey 2009 9 Global Peace Index (ranking) New Zealand 1 Ireland 6 Uruguay 24 Spain 25 Chile 28 Italy 40 Argentina 71 Brazil 83 US 85 Source: Economist Intelligence Unit 2010 Tourism and Entertainment 10 Uruguay is the champion in tourism in LatAm according to Latin Business Chronicle's Latin Tourism 2010 Index Over 2 million tourists per year ( 60% of the population) Tourism represents over 6% of GDP Four Seasons, Conrad, Radisson, Sheraton operate in Uruguay Continued investments: Setai Group, US (US$ 80 M) Sofitel, France (US$ 63 M) Fasano, Brazil (US$ 50 M) Pestana, Portugal (US$ 15 M) US$ 1.5 billion were invested in tourism related real estate over the last 5 years 5
Beneficial Promotion Systems Comprehensive legal framework for investment 11 The government e recognizes es the important t role oeof the FDI and maintains a favorable investment climate Uruguay has a track record of attracting large investments in agricultural, industrial, services and infrastructure Investment Law (Nº 16,906) January 1998: Domestic and foreign investors are treated equally Foreign investments do not require prior authorization or registration Free transferability of capital and profits overseas In 2008 the government created a one stop shop to assist investors and an automatic, predictable, transparent and effective mechanism that benefits a broader base of firms and specifies objective criteria for granting incentives Beneficial Promotion Systems Tax benefits Exemption from Corporate Income Tax * for up to 100% of the amount invested and for a period of up to 25 years, which h depend don a matrix ti of targets and indicators, and the size of the project. Indicators o Employment creation o Territorial decentralization o Export growth o Increased added value o Increased research, development and innovation o Use of clean technologies o Impact of the project on the national economy * Corporate Income Tax exists only at the national level (25%) 12 6
Income Tax Exemption Depends on the Size of the Investment: 13 Project size (denomination) Project size * (in US$ millions) Maximum % of investment to be deducted from taxes Small Up to 0.3 60 5 Maximum period (years) Medium S1 Up to 1.3 70 15 Medium S2 Up to 6.7 80 20 Large S1 Up to 13 90 25 Large S2 Up to 48 90 25 Large S3 Up to 670 100 25 Very Large More than 670 100 25 * Approximate amounts; ranges depend on the value of the UI (indexed unit) Temporary Admission (similar to the drawback regime) 14 Temporary Admission is the tax free introduction offoreignforeign goods to the domestic market from outside the national customs territory, with a specific purpose other than consumption, to be exported, within 18 months, in the state in which they were introduced or after having been subject to certain processing, manufacturing, repairing or value added processes, witheffective occupation of labor. The Temporary Admission regime also applies to machinery and equipment from any source, entering temporarily for maintenance, repair or upgrade. 7
Free Trade Zones 15 Users 100% exempt from: Corporate Income Tax Wealth Tax Import levies Any other tax created or to be created in the future * Can develop industrial, commercial or service activities Technology and service oriented business parks operating asftzs in Montevideo: Aguada Park Zonamerica Parque de las Ciencias (2011) World Trade Center Free Zone (2011) * Companies within the FTZs must pay social security contributions for their Uruguayan employees. Free Ports and Free Airports 16 Only free ports on South America s Atlantic coast 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 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 8
Information Technology 17 #1 software exporter in Latin America (US$68 per capita, followed by Costa Rica with ithus$ 33) #1 technology country in Latin America (Latin Business Chronicle s Latin Technology 2010 Index) Highest total telephone penetration in Latin America: 123 mobile lines per 100 residents in 2009 Connection to Global Crossing cable due in 2011 will enable a much faster connectivity Broad tax benefits (*) based on the Internet, broad band, fixed lines and cell phones penetration Logistics and Transport 18 Optimal logistic location in South America s Southern Cone where the Río de la Plata, Paraná and Uruguay Rivers converge with the Atlantic Ocean Deep water ports operating under free port regimes. Bid for second container terminal in the Montevideo port coming soon Latin America s densest highway network New airport terminal, new ring road in Montevideo and expansion of highway to Colonia 9
Regional Distribution Centers (RDCs) RDCs allow users to: Cut logistic costs, delays and stocks Store and perform diverse operations on the the goods Save money that would have been spent on import and export levies The goods arrive just in time to other MERCOSUR countries, Bolivia, Chile and Mexico (due to trade agreements with these countries) Time taken trucks to main destinations: o Argentina: 24 hours o Brazil: 24 96 hours o Chile: 72 96 hours o Paraguay: 72 96 hours 19 A Strong Economy 20 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 5.0% GDP growth in constant values Cumulative Annual Growth Rate (2004 2010): 6.4% 7.5% 4.6% 7.6% 8.9% 2.9% 8.5% 2004 2005 2006 2007 2008 2009 2010 E Estimated GDP growth in 2010 China India Uruguay Peru Argentina Brazil Mexico Chile Russia Germany Japan USA Eurozone 10.5% 9.7% 8.5% 8.3% 7.5% 7.5% 5.0% 5.0% 4.0% 3.3% 28% 2.8% 2.6% 1.7% 0% 5% 10% 15% Sources: Central Bank of Uruguay ; 2010 E: IMF, World Economic Outlook, October 2010 Source: FMI, World Economic Outlook, October 2010 10
Strong Growth in Exports 21 Uruguayan Exports (US$, millions) Exports have tripled in the past 6 years 9000 8000 Services 7000 Goods 6000 5000 4000 3000 2000 1000 0 Source: 2002 BCU and 2003TradeMap. 2004 2005 Data in 2006 USD millions 2007 2008 2009 Goods and Services (2009, % of total exports) Services 25% Sources: BCU and TradeMap Goods 75% Sources: Central Bank of Uruguay (BCU) and TradeMap Main Destinations of Goods Exports 2010 22 North America Africa 5% 3% Rest of South America 8% Rest of Europe 10% MERCOSUR 33% Asia 19% Source: National Customs Administration European Union 22% 11
Other 30% Raw hides, skins 3% and leather Vehicles and auto 3% parts Fish 3% Malt, wheat flour 2% Other; Livestock 2% Petroleum oils 2% 30% Fruits 2% Fats, Oils 2% Pharmaceuticals 2% Rest 9% Wool; 3% Plastics; 4% Wood products; 4% Export Break Out Main products and services Goods (2010) Services (2009) Dairy products; 8% Meat; 19% Cereals; 12% Oil, Soybeans and Seeds; Wood 11% pulp; 10% Other company services 9% Transport 16% IT 8% Financial services 4% Other 2% 23 Tourism 61% Sources: Central Bank of Uruguay (BCU) and Trademap; Uruguay XXI s calculations 24 Successful Investments 12
Examples of multinationals in Uruguay 25 Examples of multinationals in Uruguay 26 13
In Summary 27 These are exciting times for Uruguay: Our economy is growing We top many Latin American rankings Investments are pouring in We are carrying out many innovative programs Do business with us! 14
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