Uruguay continues to stand out as one of the most business-friendly countries in Latin America, earning global recognition for its political stability in doing business. According to the Global Innovation Index (GII) 2025, published by the World Intellectual Property Organization (WIPO), Uruguay ranks fourth worldwide in policy stability for businesses. This achievement underscores the country’s reliability and predictability, key factors for investors seeking low-risk environments.
Despite a slight decline in overall innovation rankings, Uruguay’s consistent approach to governance and operational security ensures that it remains a top destination for international companies.
Why Political Stability in Doing Business Matters
For investors and multinational companies, stable political conditions are critical. Political stability in doing business reduces the risk of sudden regulatory changes, minimizes bureaucratic delays, and ensures a predictable operating environment. Uruguay’s fourth-place global ranking puts it ahead of most Latin American countries, only slightly behind Switzerland, Luxembourg, and Singapore.
This stability makes Uruguay a compelling choice for businesses seeking to expand into South America. It reassures investors that long-term projects can proceed without major disruptions due to political, legal, or security uncertainties.
Strengths in Sustainability and Digital Trade
Beyond policy stability, Uruguay excels in sustainability and digital innovation. WIPO highlighted Uruguay’s 12th-place global ranking in low-carbon energy use, a distinction that makes it a regional leader, surpassed only by Paraguay. For businesses focused on sustainable operations, Uruguay offers a forward-looking environment aligned with global green standards.
Uruguay also ranks 16th worldwide in ICT services exports as a share of total trade. This positions the country as a growing digital hub, capable of supporting technology-driven industries such as software development, fintech, and IT-enabled services. A combination of strong ICT infrastructure and political stability in doing business gives Uruguay a unique edge for tech-focused investors.
Operational Stability: Minimizing Risks for Companies
Operational stability is another area where Uruguay shines. The country ranks 16th globally and first in Latin America in this category, which measures the likelihood and severity of risks—political, legal, operational, or security-related—that could affect businesses.
For companies entering Latin America, operational stability is critical. Uruguay’s low risk profile allows businesses to operate efficiently and confidently, making it a preferred location for regional headquarters, manufacturing hubs, and export-oriented enterprises.
Weaknesses and Opportunities
While Uruguay’s stability is a significant advantage, the GII report identifies areas for improvement. Gross capital formation as a percentage of GDP ranks 114th globally, indicating relatively limited domestic investment in business infrastructure. Patents by origin and graduates in science and engineering also rank low at 108th.
These challenges highlight the need for continued investment in research and development and workforce education. Strengthening these areas could elevate Uruguay’s innovation performance and further attract high-value industries seeking a skilled labor pool.
Innovation Rankings: A Decline but Not a Crisis
Uruguay’s overall innovation ranking dropped six places to 68th globally in the GII 2025, matching its lowest mark since 2020. Regionally, Chile leads at 51st, Brazil follows at 52nd, and Mexico follows at 58th. Among high-income economies, Uruguay ranks 47th.
The country fell to 61st in innovation inputs and 76th in innovation outputs, signaling gaps in translating policy stability into measurable innovation outcomes. However, these declines do not diminish Uruguay’s appeal for businesses prioritizing low-risk environments and operational predictability.
What This Means for Investors
For investors, Uruguay’s position in the GII sends a clear message: political stability in doing business is a strategic advantage. Companies can rely on predictable policies, strong regulatory frameworks, and minimal operational risk. This makes Uruguay ideal for long-term investments, particularly in sectors such as renewable energy, technology, and export-oriented services.
By leveraging its sustainability and digital strengths while addressing innovation gaps, Uruguay offers a balanced environment for growth. Businesses that support local R&D initiatives and invest in workforce development can benefit from both stability and emerging opportunities in this dynamic market.
Looking Ahead: Balancing Stability with Innovation
Uruguay’s model demonstrates that political stability in doing business provides a strong foundation for economic growth. While innovation rankings have dipped, the country’s stable environment, sustainable energy use, and digital infrastructure continue to attract forward-thinking investors.
Focusing on strengthening education, research, and innovation ecosystems will allow Uruguay to complement its global leadership in stability with rising innovation performance. For international companies seeking a reliable and secure entry point into Latin America, Uruguay remains a top-tier choice.
Conclusion
In an era of regional volatility, Uruguay stands out for its combination of political stability in doing business, operational reliability, and environmental leadership. While innovation performance faces challenges, the country’s predictable policy environment and low-risk business climate make it an ideal destination for investment.
For businesses aiming to expand in Latin America, Uruguay provides a compelling mix of security, sustainability, and emerging technological potential, proving that stability is not just a comfort—it’s a competitive advantage.