The United States has lauded Uruguay for maintaining ‘a favorable investment climate’, telling American firms that the South American country could be an ideal place for setting up goods distribution centers in the region.
Uruguay has a stable legal system in which foreign and national investments are treated alike. And it does not discriminate against foreign investors, the US State Department has said in its 2019 Investment Climate Statements.
More than 120 US firms have invested in Uruguay, with forestry, tourism, hotels, administrative services, and telecommunications, being the major sectors with American investment.
“With a small market of high-income consumers, Uruguay can also be a good test market for U.S. products,” the report noted.
The South American country’s attractions are its extensive free trade zones, free ports, stable political climate, and wealthy population. Moreover, in Uruguay, unlike many other countries in the region, foreign investors are not tempted or forced to bribe officials and politicians.
A 2018 survey by the country’s export and investment promotion agency and the Ministry of Economy showed that almost all investors were highly satisfied with Uruguay´s free trade zones and free ports.
The United States does not have a double-taxation treaty with Uruguay but does have a bilateral investment treaty.
Interestingly, the US did not express concern about Uruguay’s growing trade relations with China. Uruguay is the first country in the Southern Cone to join the Chinese One Belt One Road initiative.
Both domestic and foreign investments have somewhat slowed down in Uruguay in recent years, yet international rating agencies are giving better ratings to the country. Standard & Poor’s and Moody’s rate Uruguay two steps above the investment-grade threshold with a stable outlook.