Last week, we profiled a country that doesn’t often receive much UK attention from an investment point of view, Uruguay, and asked whether investors should be considering investing in the South American country of just over three million people.
Here, we speak to Fernanda Prece, commercial director at Las Cárcavas, for her thoughts on why investors should focus on a nation that routinely punches above its weight – from football and culture to education and cuisine.
Uruguay is often overshadowed by Brazil and Argentina, which are more popular tourist and investment destinations - why is this and what different things does Uruguay have to offer?
Uruguay is a country that knows how to maintain political and economic stability, always being a haven of value for neighbouring countries.
Argentina is placed in the number one position with 75% of buyers and is followed by Brazil, with approximately 11% of buyers.
The upper middle class and upper-class Argentinians adopted Punta del Este as a summer destination in the 1980s and consolidated, forming a place almost of their own origin.
Where are the best/most profitable investment locations in Uruguay?
Uruguay has a range of opportunities when choosing an investment. The most important points are Punta del Este, Jose Ignacio and surroundings, Montevideo and Colonia del Sacramento, all with different characteristics but with significant and tempting incomes.
How does the Uruguayan property market compare to the UK in terms of owner occupation/renting?
This is a very good question. I am going to divide it into two parts, Montevideo and Punta del Este.
Montevideo offers commercial and office investment opportunities by concentrating a large number of international companies and port entry with very important activity. Occupancy is total throughout the year and rents can reach 10% annual return.
On the other hand, Punta del Este is a summer destination, with more owners who use their houses during seasonal periods.
The occupation in summer periods has a large percentage of owners who then put their houses for rent in the high season to obtain great benefits. The occupation in this period is between 85 and 100%.
How much of Uruguay's property market is made up of overseas investors? Are there many UK-based investors in the country?
Uruguay is the gateway to Mercosur. Free access to Mercosur allows you to access a market with more than 270 million people which accumulates 56% of the GDP of Latin America.
The country has a first class port infrastructure in Montevideo, from where the densest road network in the entire continent is projected, with excellent contacts with neighbouring countries.
The percentage of foreign investors is very high and depends a lot on its older brother Argentina.
On the other hand, Europeans have chosen this destination since it is known as the Saint Tropez of Latin America where they can acquire properties at a much lower value than in their countries of origin and with incredibly higher dimensions. UK, Germany, Sweden, France and Italy lead the percentage of foreign buyers.
What tax incentives are in play for those buying from abroad?
Uruguay has just launched a very broad incentive plan for foreign investors with the intention of handling more than 400,000 residence requests by 2020.
The legal conditions that protect the investor and ensure equal treatment for both foreign and local investors, the free exchange market and a single tax system for the entire territory, are some of the conditions that make Uruguay an attractive and safe destination to conduct business.
• No restrictions on repatriation of profits
• No limit for the endowment of foreign capital in companies
• Free exchange market
• Equal treatment for foreigners and locals
• No local counterpart, authorisation, or prior registration is required
• Unique tax system throughout the territory
Uruguay is also the only country in South America with a Free Airport regime, in addition to being the only one on the South American Atlantic coast with a Free Port regime.
If you had to give three reasons why someone should invest in Uruguay, what would they be?
I think I would have plenty of reasons to invest in Uruguay, but if I had to choose three, I would say nature is a crucial factor. You can have a house in a protected nature reserve for values that are impossible to find in Europe.
Economic/fiscal security and stability would be another point that would be taken into account, while the consolidated quality offered in a highly qualified market in international gastronomy, architecture, design and human resources would be another one.
Most British people only really know about Uruguay through its national football team, but what does the country offer in terms of cuisine, culture and places to visit?
Uruguay is a country that respects nature and integrates with it in a careful and balanced way. It is a country that seeks to develop its maximum potential, without forgetting its identity and values, which provides stability and security.
The grill is one of the most outstanding menus of the Uruguayan diet. Tasting it with a glass of Tannat wine is an unmissable experience.
Protected areas represent 1% of the country’s land and sea surface, the percentage of variety of landscapes exceeds 90% and that of ecosystems and priority species for conservation sits at 40%.
Tango is recognised as one of the greatest cultural contributions of the Plata Region to the world. It encompasses, at the same time, dance, music, singing and poetry. In September 2009 it was declared Intangible Cultural Heritage of Humanity, by UNESCO.
Hot springs, beaches, free zones, sunsets, adventure tourism and luxury brands are some of the characteristics why foreigners should choose Uruguay as a destination.