Business Opportunities in Uruguay

1. Business Opportunities in Uruguay April 2011

2. 2 These are exciting times for Uruguay: • Very strong democracy and social and political stability • Continued growth and investment • Strategic location • Best labor value for money in the region • Highest internet and PC penetration in Latin America • Attractive promotion regimes which encourage investment Outstanding Value

3. 3 Political and Social Stability

4. 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) • One of Latin America’s safest countries, evidenced by the booming second home market (3rd in 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 Source: Economist Intelligence Unit 2010

5. 5 A Growing Economy Estimated GDP growth in 2010 GDP growth in constant values Cumulative Annual Growth Rate (2004–2010): 6.3% Sources: Central Bank of Uruguay : IMF, World Economic Outlook, October 2010 Source: IMF, World Economic Outlook, October 2010

6. 6 Booming Foreign Direct Investment FDI in South America (2009, % of GDP) Uruguay’s FDI flows (US$ millions) FDI increased considerably in 2002–2009 Source: Economic Commission for Latin America and the Caribbean (ECLAC) Source: ECLAC

7. 7 Strong Growth in Exports Uruguayan Exports (US$, millions) Goods and Services (2010, % of total exports) Exports have tripled in the past 6 years Source : Central Bank of Uruguay (BCU)* Forecast for 2010 Source: Central Bank of Uruguay (BCU) * Forecast for 2010

8. 8 Export Break-Out Main products and services Goods (2010) Services (2010) Sources: Central Bank of Uruguay (BCU) and Trademap; Uruguay XXI’s calculations

9. Main Destinations of Goods Exports 2000 2010 Source: National Customs Administration

10. Uruguay- Greece

11. Trade Balance Uruguay - Greece 2006 - 2010 US$ millions Source: National Customs Administration Note: Date doesnotincludestadistics of oil

12. Main Exported Products Uruguay-Greece 2010 Source: National Customs Administration

13. Main Imported Products Uruguay-Greece 2010 Source: National Customs Administration. Note: Date does not include Stadistics of Oil

14. 14 Strategic Location

15. 15 Gateway to the Region Rio de Janeiro 1,490mi 72-96 hrs Asunción 960mi 72-96 hrs Uruguay: A safe, reliable and competitive location, providing an unbeatable logistics base in the heart of the wealthiest region of South America São Paulo 1,225mi 72-96 hrs Santiago 1,180mi 72-92 hrs Porto Alegre 540mi 24-48 hrs Buenos Aires 155mi 24 hrs Montevideo

16. 16 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 Sources: Central banks and national statistics institutes * Forecast for 2010, source: IMF (WEO)

17. Platform for the Region Movement of containerized cargo in the port of Montevideo • 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%

18. 18 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) Source: World Economic Forum’s Global Competitiveness Report 2010-2011

19. Labor: Best Value for Money • State provides free education through college and invests 4.5% of the GDP in education • 100% of 15 year-old high school students have finished at least 3 years of English and 2 of computer science • 21% of university students study accounting, finance or business administration Source: United Nation’s Human Development Report 2009 Source: World Economic Forum’s Global Competitiveness Report 2010-2011

20. 20 Highest Ranked in LatAm in Use of Modern Communications Source: World Economic Forum’s Global Competitiveness Report 2010-2011

21. 21 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 their first computer; half of them belong to the poorest 20% of the population

22. 22 Beneficial Promotion Systems Comprehensive legal framework for investment • The government recognizes the important role of 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 • The United Kingdom and Uruguay signed an Investment Promotion and Protection Agreement between the two nations in 1997

23. 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 depend on a matrix of targets and indicators, and the size of the project • Exemption of Wealth Tax on civil works for 8 to 10 years, and on fixed assets throughout their life • Exemption of import taxes and fees on fixed assets declared non-competitive with the domestic industry • 100% refund of VAT, under the exporters regime, on the acquisition of materials and services for civil works in the domestic market * Corporate Income Tax exists only at the national level (25%)

24. Beneficial Promotion Systems Other Tax Benefits • Exemption of Wealth Tax on civil works, for 8 years in Montevideo and for 10 years in other regions, and on fixed assets throughout their life. • Exemption of import taxes and fees on fixed assets declared non-competitive with the domestic industry. • 100% refund of VAT, under the exporters regime, on the acquisition of materials and services for civil works in the domestic market. * Corporate Income Tax exists only at the national level (25%)

25. Temporary Admission (similar to the drawback regime) • Temporary Admission is the tax-free introduction of foreign goods to the domestic market • Goods to be exported, within 18 months, in the same state they were introduced or after having been subject to certain processing (manufacturing, repairing or value added processes) • The Temporary Admission regime also applies to machinery and equipment from any source, entering temporarily for maintenance, repair or upgrade.

26. 26 • 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 as FTZs in Montevideo: • Zonamerica • Aguada Park • World Trade Center Free Zone (2011) • Parque de las Ciencias (2011) 26 Free Trade Zones *Companies within the FTZs must pay social security contributions for their Uruguayan employees.

27. 27 Free Ports and Free Airports • 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: • all import taxes or charges • all domestic taxes (e.g. VAT) • Services rendered are exempt from VAT • 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

28. 28 Regional Distribution Centers (RDCs) • Optimal logistic location in South America’s Southern Cone where the Río de la Plata, Paraná and Uruguay Rivers converge with the Atlantic Ocean • Unique and favourable legal system for logistics activities: Bonded Warehouses, Free Zones, Free Ports and Free Airports • RDCs in Uruguay allow users to: • Cut logistic costs, delays and inventories in neighbouring countries • Store and perform diverse operations on the goods • Generate financial savings on delayed levies at final market • Uruguay boasts Latin America’s densest highway network and excellent connectivity to neighbouring countries • Lorry time to reach main destinations: Argentina: 24hs, Brazil: 24-96 hs, Chile: 72-96 hs

29. 29 Foreign Investors

30. 30 In Summary • 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!

35. 35 Thank You! www.uruguayxxi.gub.uy invest@uruguayxxi.gub.uy