Uruguay

Merchandise Trade

• Uruguay has been a World Trade Organization (WTO) member since January 1, 1995 and a member of the General Agreement on Tariffs and Trade since December 6, 1953. The country is also a member of MERCOSUR (since 1991).
   
• Uruguay imposes a regionally competitive average weighted tariff rate on imports of 4.8%. This is the 12th lowest out of 30 Caribbean and Central and South American states with data readily available.
• The country currently has only one anti-dumping measure in place, affecting certain types of electric water heaters from Mainland China.
   
• Uruguay currently imposes tariffs on 105 products originating from 32 countries, including Mainland China.
   
• In addition to tariffs put in place by Uruguay, MERCOSUR members also impose tariffs on 10 products originating from 16 countries – including from Mainland China.
   
• Import tariffs are highest on finished goods and many capital goods and intermediate inputs face lower or eliminated rates.
   
• Generally, no tariffs are charged on goods traded between MERCOSUR countries. Uruguay has championed the free trade of goods throughout the trade bloc.
   
• Inefficient trade bureaucracy remains an issue, but procedures are generally more efficient than in neighbouring Argentina and Brazil, increasing Uruguay's appeal as an entry point to the MERCOSR trade bloc.
   
• Although food and agricultural products remain Uruguay's main source of export revenue, chemical, industrial and fuel products comprise an important export sector, with pulp and paper production an important national industry.
   
• Uruguay has a few non-tariff barriers but these are mainly used to protect public health, national security, the environment, phytosanitary conditions and consumers.

Sources: WTO – Trade Policy Review, Fitch Solutions

Multinational Trade Agreements

Active

1. MERCOSUR: A regional customs union with Brazil, Argentina, Paraguay, Uruguay and Venezuela (the latter was incorporated as a member in 2012 but is currently suspended). The Mercosur (which stands for Southern Common Market) agreement covers goods and services; the agreement on goods was signed on March 26, 1991, and entered into force on November 29, 1991, while the agreement on services was signed on December 15, 1997, and entered into force on December 7, 2005. The agreement facilitates trade with these neighbouring countries through the removal of tariff and non-tariff barriers. In particular, Argentina and Uruguay are key trade partners of Brazil. The customs union is still in the process of being fully implemented with some significant exceptions to the common external tariff in individual countries and double-application of import tariffs on goods imported to one member and subsequently moved into another. Bolivia is in the process of becoming a full member. Mercosur encompasses approximately 75% of South America's GDP and is one of the world's largest economic blocs.
    
2. MERCOSUR associate members: The free trade agreement (FTA) between MERCOSUR and associate members. However, MERCOSUR's associate members – Chile, Colombia, Ecuador, Guyana, Peru and Suriname – do not enjoy full voting rights or complete access to markets.
    
3. MERCOSUR-India Preferential Trade Agreement (PTA): The PTA between MERCOSUR and India was signed on January 25, 2004, and came into force on June 1, 2009.
    
4. MERCOSUR-Israel FTA: The agreement, agreed on Montevideo in 2007, was signed on December 18, 2007, and came into effect on December 23, 2009. The FTA provides concessions on tariff preferences for approximately 8,000 products (mainly manufactured goods).
    
5. Uruguay-Mexico FTA and Economic Integration Agreement: The agreement, which covers goods and services, was signed on November 5, 2003, and entered into force on July 15, 2004.
    
6. MERCOSUR-Mexico Partial Scope Agreement: The agreement covers goods, was signed on July 7, 2016, and entered into force on December 28, 2016.
    
7. MERCOSUR-Egypt FTA: The agreement, signed in August 2010, became operational in 2017 and exempts products from import taxes (with 65% of all traded goods between the two regions becoming exempt in 2017, with the remainder gradually lowering after).
    
8. MERCOSUR-SACU PTA: The PTA between MERCOSUR and the Southern African Customs Union (SACU) countries (Botswana, Eswatini, Lesotho, Namibia and South Africa) which covers goods, was signed on December 15, 2008, and came into effect in April of 2016. The agreement offers concessions on 1,062 tariff lines for MERCOSUR traders doing business with SACU (and concessions on 1,052 tariff lines for SACU countries doing business with MERCOSUR).

Ratification Pending

EU-MERCOSUR Trade Agreement: After 19 and a half years, an agreement between the parties was reached on June 28, 2019. The signed agreements will be presented to the parliaments of the EU and Mercosur bloc members, as well as to the EU Parliament, for ratification before coming into effect. The agreement will cover a total population of 780 million and, currently, Mercosur countries import goods and services from the EU worth approximately EUR68.0 billion. Mercosur's investment stock in the EU is worth EUR52.0 billion while the EU is the biggest foreign investor in Mercosur, with stock of EUR381.0 billion. The agreement contains specific commitments on labour rights and environmental protection, including the implementation of the Paris climate agreement and related enforcement rules. The EU will not fully open its market for imports of agri-food products, although beef, poultry and honey imports from the Mercosur countries will be permitted to increase over a five-year phasing in period. Several EU countries are obstructing ratification of the deal in its current form.

Sources: WTO Regional Trade Agreements database, Fitch Solutions, European Commission

Foreign Direct Investment

• Value Added Tax: 22%
• Corporate Income Tax: 25%

Source: DGI

Business Taxes

Source: DGI
Date last reviewed: February 6, 2020

Foreign Worker Permits

Foreign workers must obtain work permits and a Uruguayan identity card and may reside in Uruguay under either a temporary or permanent residency visa. It can take up to two years to obtain permanent residency, but this should not pose additional risks to investors looking to bring in foreign workers, as residency permits are very likely to be issued eventually. Workers may reside in the country under a temporary visa until the permanent visa is issued.

Local and Foreign Worker Quotas

There are no quotas for employment in Uruguay, except for businesses based in free trade zones, which must employ a workforce which is at least 75% Uruguayan, although this is negotiable.

Sources: Europa.eu, Fitch Solutions

Sovereign Credit Ratings

Sources: Moody's, Standard & Poor's, Fitch Ratings

Competitiveness and Efficiency Indicators

Sources: World Bank, IMD, Transparency International

Fitch Solutions Risk Indices

Source: Fitch Solutions
Date last reviewed: February 6, 2020

Hong Kong’s Trade with Uruguay

Export Commodity	Commodity Detail	Value (US$ million)
Commodity 1	Telecommunications and sound recording and reproducing apparatus and equipment	56.8
Commodity 2	Office machines and automatic data processing machines	20.9
Commodity 3	Tobacco and tobacco manufactures	10.4
Commodity 4	Articles of apparel and clothing accessories	8.5
Commodity 5	Electrical machinery, apparatus and apppliances, and electrical parts thereof	2.8

Import Commodity	Commodity Detail	Value (US$ million)
Commodity 1	Meat and meat preparations	39.6
Commodity 2	Essential oils and resinoids and perfume materials; toilet, polishing and cleansing preparations	8.1
Commodity 3	Metalliferous ores and metal scrap	5.3
Commodity 4	Leather, leather manufactures, and dressed furskins	3.2
Commodity 5	Photographic apparatus, equipment and supplies and optical goods; watches and clocks	2.4