Uruguay | The small South American country that has become the most attractive to invest in 2024 | Venezuela | United States | Ecuador | Colombia | World

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This country has managed to position itself favorably thanks to its attractive tax benefits, as well as its regulatory environment and political stability. Photo: composition by Jazmin Ceras/LR/Freepick. Video: Stay Real

Peru has maintained a superior position, particularly against Chilean companies interested in expanding their operations beyond their national borders for years. In the specific field of mining, until May 2023, the Andean nation managed to surpass its most direct competitor, Chilepositioning itself as the most attractive destination for the exploration and development of this sector, according to a report from the Fraser Institute.

Uruguay is known for its political and economic stability compared to other countries in the region. Photo: Immigrantinvest

What is the small country in South America that has become the most attractive to invest in?

Uruguay has been making progress in terms of tax competitiveness, especially with regard to income tax, compared to its neighboring countries, despite the fact that tax structures in the region present considerable similarities. When specifically examining this aspect, it is observed that the tax rate on taxable net income is 27% in Chile, 29.5% in Peru, and 25% in Uruguay, which shows an advantage for the latter.

Investment opportunities in Uruguay have stood out since 2022 and are diversified and enhanced. Photo: save.com

As for the Value Added Tax (VAT) or Sales and Services Tax, Peru leads with the lowest rate, set at 18%, followed by Chile with 19% and Uruguay, which has the highest rate, with 22%. When considering the other members of the Pacific Alliance, Colombia and Mexico, both countries have an income tax that can reach up to 35%, and VAT rates of 19% and 16%, respectively.

Uruguay gains ground thanks to the benefits it provides

Uruguay has stood out in the last year for its significant progress, especially among Chilean and Argentine companies interested in diversifying their operations. This country has emerged as a welcoming destination for business expansion. According to KC Consulting, the Uruguayan nation stands out as an attractive market for three main reasons: significant tax advantages, a solid and reliable regulatory environment, and a stable political framework.

Victor Jimenezfounder of KC Consulting, pointed out that Uruguay has a widely dollarized economy. This factor reduces exchange rate risk, contributes to maintaining a low and stable inflation rate, and promotes a diversified economy. These characteristics are key to facilitating long-term strategic and financial planning.

Uruguay is one of the countries with the best minimum salaries in the region. Photo: UNDRR

“In addition, it has political stability and a high level of security, an environment that provides a lot of tranquility and confidence when deciding on one country or another, an environment that, for different reasons, Peru and Chile have seen diminished,” he added.

Among the fiscal incentives that Uruguay makes available, they highlight measures such as the reduction of tax pressure on companies, exemptions in the Income Tax on Economic Activities (IRAE) and the Value Added Tax (VAT), as well as the restitution of the latter for exporters, and tax credits for research and development.

Companies can be exempt from paying Income Tax for a period of up to 10 years, as long as they invest in sectors considered priority. This tax benefit is not available in countries such as Peru or Chile. According to the analysis carried out by a consulting firm, the sectors that benefit the most from these measures are information technologies, biotechnology, renewable energies, logistics and tourism, which highlights the strategic approach of these policies to promote development in fundamental areas.

Why is Uruguay the best country in South America to invest?

Uruguay It is distinguished by its political and economic solidity compared to other nations around it. This stability represents a crucial element for investors who wish to reduce the risks linked to political and economic instability.

Uruguay stands out for its solid and business-friendly legal framework, with clear laws that protect foreign investments. It has signed investment protection treaties and agreements to avoid double taxation, creating a safe and predictable environment for investors.

Uruguay has a diversified economy that includes sectors such as agriculture, manufacturing, technological services and tourism. Photo: Kayak

High level of transparency and low level of corruption: Uruguay stands out in the region for its low level of corruption and high standards of transparency in government and commercial processes. This reduces the risks and costs associated with corrupt practices and improves the business climate.

Diversified economy: Although it is a small country, Uruguay has a diversified economy that includes sectors such as agriculture, manufacturing, technological services and tourism. This offers a wide range of investment opportunities.

Uruguay has stood out in the last year for its significant progress, especially among Chilean and Argentine companies interested in diversifying their operations. Photo: @rodolfocaporale

Strategic location: Its geographical location offers strategic access to Mercosur, a common market that includes Argentina, Brazil, Paraguay and Venezuela, making it an ideal platform to access a broader market.

Investment incentives: Uruguay offers various fiscal and non-fiscal incentives to attract foreign direct investment, including tax exemptions, customs benefits and support for business setup.

Uruguay is also known for offering a high quality of life, with high-quality health and education services. Photo: Reddit

Qualified workforce: The country has a well-educated and qualified workforce, especially in areas such as information technology, which is crucial for companies seeking to establish high value-added operations.

Quality of life: Uruguay is also known for offering a high quality of life, with high-quality health services and education, which can be an attractive factor for both investors and professionals looking to establish themselves in the country.