Changes in international trends resulting from the health crisis may represent an opportunity for Uruguay, which, thanks to its resilience, macroeconomic stability, institutional quality, and quality of life, continues to be an attractive destination for FDI.

The Competitive Intelligence area of ​​Uruguay XXI presented this week the new Report on Foreign Direct Investment (FDI) in Uruguay. The report indicates that although the COVID-19 pandemic will affect FDI flows, changes in international investment trends constitute an opportunity for the country. Due to its institutional quality, macroeconomic strength and resilience to external shocks, Uruguay is positioned as an attractive destination for investors.

Regarding the analysis of the pre-pandemic situation, the report highlights that for 2019 FDI flows increased slightly compared to the previous year at a global level, with growth explained largely by higher capital flows to Europe. Latin America, meanwhile, already registered a reduction of 8% in 2019, totaling US$ 161,000 million, with Brazil and Mexico as the largest recipients of FDI in the region.

It is expected that the COVID-19 pandemic will significantly affect foreign direct investment flows, with a global reduction of 40% in 2020, according to UNCTAD forecasts. The effects of the health crisis on FDI are even expected to affect investment permanently, with short- and long-term consequences.

Uruguay is a country open to foreign investment and where there is a broad consensus regarding the importance of FDI for the development of the national economy. Successive administrations have generated an adequate investment climate, with a friendly environment for doing business, a stable and attractive legal regime, and a regulatory and institutional framework that adapts to the needs of investors.

Along these lines, the report states that the economic growth of the last decade has led to investment opportunities in various sectors – agribusiness, forestry wood, cannabis, global services and renewable energies - in addition to specific investment projects.

The report highlights that these distinctive qualities added to the changes in international investment trends mean a window of opportunity for Uruguay, as aspects such as institutional quality and resilience will become increasingly important when choosing a destination to invest. .

Likewise, the Uruguayan government has already introduced regulatory changes that favor investment, both national and foreign.

For his good management of the global health crisis, and its outstanding performance in environmental, social and governance factors, Uruguay stands out as a preferential partner for doing business among emerging countries.

Clear rules of the game, macroeconomic stability, financial and commercial openness, add to a battery of investment incentives that, together with the outstanding infrastructure and wide availability of qualified human capital, make Uruguay an exceptional destination to invest.

This is why the new competitive intelligence report from the investment, export and country image promotion agency affirms that even in a challenging world scenario, Uruguay will remain a destiny attractive to the foreign direct investment, thanks to the aforementioned structural factors, which have cemented its favorable position as a business partner.

To access the Foreign Direct Investment Report, go to here.