When investigating Latin America markets for business today, it may pay to think small—specifically at a nation of only 3.5 million people and 68,000 square miles that offers big business potential: Uruguay.
“Uruguay stands out in Latin America for being an egalitarian society and for its high per capita income, low level of inequality and poverty and the almost complete absence of extreme poverty,” according to the World Bank. “Two main characteristics —a solid social contract and economic openness— paved the way to the reduction in poverty and the promotion of shared prosperity that Uruguay successfully followed in the last decade.”
Andrés Durán Hareau, Uruguay’s ambassador to the United States, expressed his nation’s business advantages as follows:
“It’s stable, where investors can think long-term because institutions work, the rule of law works, there is political, macroeconomic, and social stability. And this is key, this is very important. It’s a reliable country that offers certainty.”
Such certainty has catalyzed progress in several promising sectors, with core fundamentals boding well for future growth. Highlights follow.
Homegrown support for the full fintech ecosystem
As Latin America assumes global leadership in ecommerce, Uruguayan companies are helping to bring these digital transactions to life for consumers, businesses, and financial institutions.
In 2021, Uruguay became home to South America’s first unicorn: cross-border payments platform dLocal. A near 48% jump in the share price on first day trading saw the company valued at almost $9 billion.
dLocal is one of more than 60 Uruguayan fintech enterprises meeting needs within the digital finance ecosystem. Bankingly gives banks and credit unions the ability to deliver their own customers online and mobile banking services, Prometeo provide a single point of access to 101 bank connections in 10 countries of the region, and the Inswitch finance-as-a-service platform enables any company to offer financial services.
For entrepreneurs and consumers, MiFinanzias has connected over $100 million to small and medium-sized enterprises, and Paganza lets users pay bills from their phone. Meanwhile, the business environment is unfolding favorably for digital currency.
In August 2021, Senator Juan Satori introduced a bill to allow the use of cryptocurrencies as payments in contracts, and in October 2021, the Central Bank of Uruguay established a work plan laying the foundation for the regulation of digital assets and service providers. In the beginning of 2022, Uruguay’s first cryptocurrency ATM is expected to launch operations in Punta del Este, offering consumers Ferret Token and Urubit.
Innovation in industries old and new
In a nation long known for excellent beef and beautiful beachfront properties, entrepreneurs are charting new paths with enabling technologies. Chipsafe, for example, gives cattle producers a means of monitoring livestock remotely, and NudaProp is the first investment platform in Latin America and the Caribbean focused on “naked” real estate ownership, in which an investor holds the title to a property but no other rights associated with home ownership.
Uruguay also has a presence in digital-first sectors and emerging tech. Abya Corp, which Bloomberg describes as “a Netflix-type service for gaming,” was founded by a Uruguayan team of entrepreneurs, and Montevideo-based Unicorn Games incorporates augmented reality into games for youth. Uruguay is home to more than 30 AI development companies and firms like Block3, which offers blockchain solutions for education, e-commerce, retail, pharmaceutical, media, and laboratory clients.
As a result of efforts like these, Uruguay now ranks fifth among Latin American and Caribbean countries in the World Intellectual Property Organization’s Innovation ranking, behind only Chile, Costa Rica, Brazil, and Mexico. Hackers/Founders CEO Jonathan Nelson explains the nation’s edge as follows: “What Uruguay has probably done better than most of the countries is that they’ve actually always seen themselves as an exporter of technology…So the policies were always geared toward, ‘think global. Think of this as your home base but also think about exporting.’ And they’ve actively tried to build a network and try to do cross-pollination across different ecosystems.”
Education, collaboration, and infrastructure designed for growth
Companies looking to do business in Uruguay will find an educated workforce, partnerships that encourage innovation, and a commitment to maintaining the strong roads, water systems, and connectivity essential to commerce and daily life.
Since the Uruguayan government launched Plan Ceibal in 2007, providing schools with internet access and students with digital devices and education in everything from coding to robotics, the nation has “remarkable progress toward closing the digital divide,” in the words of the Brookings Institution.
The nation is committed to keeping progress growing through public-private partnerships. Newlab Studios Uruguay is a platform to bring innovators, inventors, and entrepreneurs together to launch businesses in Uruguay and develop, test, and deploy frontier technologies to meet crucial industry goals. Another example is CBI + I, a public-private biotechnology center nurturing projects ranging from cheese fermentation to medicinal cannabis derivatives, phosphorus-solubilizing microorganisms.
Uruguay has invested heavily in upgrading its infrastructure in recent years, including modernization of roads, ports, hydroelectric dams, and water systems. The Ministry of Transport and Public Works surpassed its highway development goals from 2012 through 2019, and the government has announced an ambitious $1 billion, four-year water and sanitation project.
Such enhancements include the connectivity critical to digital innovation. In June 2021, Google announced it was building Firmina, which will connect Uruguay, Brazil, and Argentina to the United States with the longest underseas internet access cable in the world.
Ready to speak with specialized consultants and advisors who can help you evaluate the Uruguayan market for expansion, partnership, investment, and more? Contact us today.