Nearshore Americas Publishes Exclusive Report on Uruguay’s Outsourcing Strengths

Uruguay's higher wages are offset by the high-value work its highly educated and multilingual workers produce — not to mention its 12 free-trade zones, where there are no transit, property, VAT, or net income taxes.

uruguay outsourcing

Despite being a small country with relatively high wages, Uruguay is a great market for high-value outsourcing work, according to Nearshore Americas’ latest white paper.

Among the nation’s many strengths, the report, “Country Profile: Uruguay,” notes that it is home to a large number of shared service centers and that only a few Latin American countries can rival it when it comes to internet infrastructure. And in addition to having the region’s fastest internet download speeds, Uruguay has 12 free-trade zones, where there are no transit, property, VAT, or net income taxes.

The white paper — which takes insights from interviews with industry leaders in the country, including executives from Sunny Sky Solutions, MVD Consulting, Sky Blue Legal Services, and KPMG — also says that Uruguay’s competitiveness as an outsourcing destination has been bolstered by economic and “regulatory instability” in surrounding markets, especially Argentina and Brazil. As Argentina imposed more restrictions on corporate companies over the past decade, many businesses with global operations moved into Uruguay. And Uruguay welcomed them by reforming its economy further.

“Since 2002, Uruguay has enacted a series of reforms to liberalize the economy,” said Sean Goforth, Nearshore America’s director of research. “Some business-oriented reforms, such as the data privacy law, have really boosted development of the BPO sector.”

Although labor is a bit expensive compared to other Latin American markets, Uruguay offers several benefits for businesses to offset the wage cost. Even outside of the free-trade zones, the government offers a series of incentives and tax exemption to spur the creation of shared service centers.

“High wages are a hindrance if the workforce is not productive, but in Uruguay’s case the country boasts a highly educated, multilingual workforce, which allows it to deliver high-value business services,” said Goforth. “The country excels at delivering higher-value BPO solutions, not to mention its strong software development sector.”

In Uruguay, English is compulsory from middle school through university. Therefore, the country is home to a large number of people who can speak in three languages, including Portuguese and Spanish.

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Uruguay’s growing popularity for legal process outsourcing (LPO) is another alluring factor for the market. “LPO remains a small, niche BPO offering, but Uruguay is capitalizing on its well-educated population, including lawyers and other professionals, to deliver legal services,” said Goforth. “The growth of the LPO segment is just one more indicator of the value that Uruguay renders when it comes to global services.”

This growing high-value segment, in addition to finance and accounting outsourcing (FAO) and knowledge process outsourcing (KPO), means that Uruguay will increasingly make its mark on the industry. “In the years ahead, budding strength in FAO, KPO, and LPO, as well as price competitiveness in software development, will help drive overall growth in the business services sector,” states the report.

This country profile for Uruguay is just the beginning of a planned series from Nearshore Americas. Goforth noted that the company will follow with reports profiling the BPO industries in other countries across Latin America. “This is the first white paper of a new kind,” said Goforth. “More such reports will be out in the days ahead.”