UruguayA place to invest, live and work.

Why invest in Uruguay?

1. Political and social stability

2. Macroeconomic strength

3. Strategic location and modern infrastructure

4. Favorable business environment

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Uruguay has a privileged geographical location…

UruguayA strategic location, with the best

connections to establish a logistics base in the heart of the richest region in the continent

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…with free access to a large market: MERCOSUR

Access to an increasing and large consumer

market due to our open economy and our integration to the

MERCOSUR

Indicators Uruguay MERCOSUR

Population (million) 3.4 241

Area (sq km thousands) 176.2 11,878

GDP 2011 (US$, billion)

46.7 2,991

GDP per capita 2011 (US$) 13,861 12,400

GDP growth rate2011 (%)

5.7% 3.7%

Source: Uruguay XXI based on data provided by Central Banks and National Statistics Institutes

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Social and political stabilityRanking

Uruguay in South America

Uruguay in the World

Transparency of government policymaking(World Economic Forum 2012)

2 20

Democracy Index(The Economist Intelligence Unit 2011)

1 17

Economic Freedom(Heritage Foundation 2012)

2 29

Political Stability(World Bank [WGI] 2010)

1 49

Index of political and economic transformation(Bertelsmann Foundation 2012)

1 4

Global Peace Index(Institute for Economics & Peace 2011)

1 21

Business Climate Index(Getulio Vargas Foundation & IFO 2012)

1 --

Quality of Living(Mercer Quality of Living City Ranking 2011)

1 77

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Uruguayan GDP (annual growth %)

7.5%%

4.1%

6.5%

7.2%

2.4%

8.9%

5.7%

4.0%

2005 2006 2007 2008 2009 2010 2011 2012J

Between 2005 and 2011 the average annual

growth rate was of 6%

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Uruguay’s sustainable growth

Source: Uruguay XXI based on data provided by the Central Bank of Uruguay and the IMF (WEO September 2011)

Uruguayan GDP per capita (PPP) US$

5,2635,981

7,191

9,351 9,364

11,996

14,672

15,71416,527

17,40918,360

19,362

2005 2006 2007 2008 2009 2010 2011 2012J 2013J 2014J 2015J 2016J

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0%

2%

4%

6%

8%

10%

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1000

1500

2000

2500

3000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FDI/GDP (%)

US$ million

FDI FLow FDI/GDP

FDI in Uruguay

Source: Uruguay XXI based on data provided by Central Banks

1.2%

2.4%

4.1%% 4.1% 4.3%

5.4%

7.1%

Argentina Paraguay Colombia Brazil Peru Uruguay Chile

FDI in South America (% of GDP - 2011)

A country that generates and attracts more investment

Leading sources and recipient sectors of FDI2001-2009

23%

9%

6%

5%

3%

Cattle raising, agriculture and

forestry25%

Construction23%

Manufacturing industry

12%

Financial brokerage

9%

Trading5%

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4000

6000

8000

10000

12000

14000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Bienes Servicios

Exports of goods and services(US$ million)

Exports of goods Exports of services

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…with increasing exports…

Source: Uruguay XXI based on data provided by the DNA and BCU (Balance of Payments)

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Tourism64%

Logistics19%

IT5%

Other company services

5%

Financial services

4%

Other3%

Meat17%

Soy10%

Wood pulp10%

Cereals10%

Dairy products

9%

Automobiles Auto parts

6%

Wood products

4%

Plastics, 3%

Wool, 3%

Fur, 3%

Milling products

3%

Other21%

…and increasing access to more markets9

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• World-class port facilities in Montevideo, an excellent regional hub for the Southern Cone

• Uruguay has the most concentrated road network in Latin America

• New airport, new ring road in Montevideo and a new ferry port in Colonia

• Reliable electricity supply (mostly from renewable resources)

Modern infrastructure

USA Spain Uruguay Hungary Chile ItalyNew

Zealand Brazil Argentina Paraguay

32 34 35 37 39 42 47 69 96 117

Quality of Electricity Supply (ranking)

Source: World Economic Forum, Global Competitiveness Report 2010-11

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Source: World Economic Forum, Global Competitiveness Report 2011-12. Ranking for 142 countries

Leading country in communications

26

Uruguay

Brazil

Chile

Argentina

19

47

66

Mobile telephone subscribers

(ranking)

70

Chile

Uruguay

Brazil

Colombia

53

56

61

Internet subscribers

(ranking)

Uruguay is the most advanced country in Latin America according to the Information and Communication Technology Index (ICT), developed by the International

Telecommunication Union in 2011

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Uruguay: A competitive country to do business

The Global Competitiveness Index 2012

Highly Competitive

Slightlycompetitive

Source: Uruguay XXI based on The World Economic Forum, Global Competitiveness Index 2012

Chile

UruguayPeru Colombia

Argentina Ecuador

Bolivia

Paraguay

Venezuela

Brazil

Third place in South America63rd position in the Global Ranking

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Tertiary Education Enrollment(ranking)

USA 6

Spain 18

Argentina 21

Uruguay 25

Ireland 33

UK 36

Chile 38

Switzerland 51

Brazil 68

Paraguay 76

Source: The World Economic Forum. The Global Competitiveness 2011-12

Adults Literacy Rate (%)

Ireland 99.0

Switzerland 99.0

UK 99.0

USA 99.0

Chile 98.6

Uruguay 98.3

Argentina 97.7

Spain 97.7

Paraguay 94.6

Brazil 90.0

Source: United Nations, Human Development Reports 2011

• The State provides free education up to and throughout College and invests 4.5% of its GDP in education

• 100% of high school students have completed at least three years of English and two years of Computer Science

• 21% of university students are developing careers on Accounting, Finance and Business Administration

• 17% of university students are developing careers in Science and Technology

High educational level13

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Highly competitive human resources

Total annual labor costs in Uruguay (US$):

Source: Uruguay XXI based on data from Advice and PwC, February 2012

Comparison of net annual salaries:

Seamstress 6,600

Junior mechanic

12,200

Systems Manager

88,500

HHRR Manager

89,000

Production Manager

104,100

Financial Manager

107,900

Business Manager

114,200

Chief Executive

192,600

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Investment Promotion

• The State recognizes the important role of FDI and maintains a favorable business environment

• Uruguay has a significant background for attracting investments in agriculture, industry, services and infrastructure

• Investment Law (No. 16.906) – January 1998:

Foreign and domestic investors are treated under equal conditions

Prior authorization or registration are not required

There are no restrictions to capital transfers or profits abroad

• In 2008, the Government created a non-stop shop to assist investors by establishingobjective criteria for granting tax exemptions, this was successfully accomplishedthrough an efficient, transparent, simple and non-arbitrary mechanism

Complete legal framework for investments

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• Exemption from Corporate Income Tax* between 20% and 100% of the invested amount and for a minimum period of three years, depending on the evaluation of the project by a series of indicators

Indicators and weight coefficients

o Employment generation: 30%

o Territorial decentralization: 15%

o Increase in exports: 15%

o Cleaner production or Investment in R&D: 20%

o Sector Indicator: 20%

Tax benefits

* Corporate Income Tax exists only at national level (25%)

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Investment Promotion

• To be eligible for the benefit, companies must attain at least 1 point, ensuring a floor of 20% exemption from Corporate Income Tax

Calculating formula for the Corporate Income Tax benefit

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Total weighted score Exemption

2 29%

4 47%

6 64%

8 82%

10 100%

Investment PromotionFa

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• Exemption of Wealth Tax on civil works for eight years in Montevideo and ten years in other departments, 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, on the domestic acquisition of materials and services for civil works

Other tax benefits

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Investment Promotion

Industrial Parks19

• The users of industrial parks are eligible for the benefits specified in Law No. 16,906

• Additional benefits:– The total weighted score will be increased by 15%– They will have a 5-year tax credit for the employer’s social security

benefits of the new job positions created by the project

• At this moment there are three industrial parks with authorization:

– Parque Industrial Alto Uruguay

– Parque Industrial de Juan Lacaze

– Parque Industrial Zona Este

• The Parque Industrial Las Piedras will soon have authorization

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Investment Projects

295

177

485

1058

1290

1150

1429

61 63 75

313

393

833 852

2005 2006 2007 2008 2009 2010 2011

US$ million

Number of projects

Projects approved by the Commission for the Implementation of the Investment Law (COMAP)

In the last five years, the amount of projects presented to

the COMAP multiplied by ten

Agriculture10%

Commerce32%

Industry 21%

Services 30%

Tourism 7%

Projects approved by sector (2011)

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•Temporary Admission is the tax-free introduction of foreign goods to the domestic market to be exported, in the state in which they were introduced or after having been subject to certain value added processes, with effective occupation of labor.

•The Temporary Admission regime also applies to machinery and equipment from any source, entering temporarily for maintenance, repair or upgrade.Fa

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Temporary Admission(similar to the drawback regime)

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Free Zones

• Users 100% exempt from:

• Corporate Income Tax (IRAE)

• Wealth Tax

• Import Tariffs

• Any other created tax, or that might be created in the future *

• Users may develop industrial, commercial or service activities

• Business parks focused on technology and services which operate in Montevideo:

• Aguada Park

• Zonamérica

• Parque de las Ciencias

• WTC Free Zone

* Companies which operate under the free zone regime must pay social security taxes for their Uruguayan employees.

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• 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:

oall import taxes or charges

oall 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

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Foreign companies present in Uruguay

In summary

These are exciting times for Uruguay:

• Our economy is growing

• Investments are flowing

• We are carrying out many innovative programs

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Thank you!

URUGUAY XXI

www.uruguayxxi.gub.uy

invest@uruguayxxi.gub.uy