Uruguay - Foreign investment

Uruguay's Foreign Investment Law of 28 March 1974 closed certain industries to foreign investors: public water and drainage services; railroads; alcohol and petroleum refineries; electric, telephone, local telegraph, mail, and port services; insurance; and issuance of mortgage bonds. Private investment in other sectors was generally welcome.

From 1992 to 1998, foreign direct investment (FDI) amounted to about $150 million annually, which reflected a relatively low pace of privatization. From 1999 to 2001 FDI inflow increased steadily, from $239 million, to $285 million, to $320 million. Under the impact of the worldwide decline in outward FDI, flows to Uruguay in 2002 are estimated to have fallen about one-third. Main investors included Canada and the EU. FDI hardly experienced any growth during the 1990s, even though the government promoted investment in the mining, tourism, hydrocarbons, forestry, printing, and media sectors.

The 1998 Investment Promotion and Protection Law declared that promotion and protection of national and foreign investment was in the national interest. Foreign and national investments would be treated the same, and investment would be allowed without prior authorization or registration. Complete foreign ownership is allowed in most sectors except for oil and telecommunications. Historically, Uruguay has maintained a number of state monopolies in which direct foreign equity participation is prohibited. Privatization is often popularly opposed, and the state seeks to foster efficiency through demonopolization and deregulation. State sectors that have been partially liberalized include insurance, mortgages, road building and repair, water sanitation and distribution, energy generation, piped gas distribution, and cellular phones. A law in February 2001 de-monopolized telecommunications, controlled by ANTEL. The state-owned oil company ANCAP is the only importer and refiner of petroleum products in Uruguay, and will remain a monopoly until 2006. Foreigners receive equal treatment in privatization/concession programs. There are nine free trade zones (FTZs), in the country, some state-owned and operated, others state-owned but privately operated, and others privately owned and operated. FTZs offer tax and duty exemptions.

Also read article about Uruguay from Wikipedia

User Contributions:

Comment about this article, ask questions, or add new information about this topic: