Juan Carlos Rodríguez
Commercial and Marketing Director
Aguada Park
jcrodriguez@aguadapark.com

LATAM FDI: Welcome to the LATAM FDI podcast. Today we are very fortunate to have a gentleman from Uruguay with us. His name is Juan Carlos Rodriguez, and Juan Carlos is the commercial and marketing director of the Aguada Park Free Zone in Montevideo. Today we will talk about investing in  Uruguay and its attraction for foreign capital. How are you doing today, Juan Carlos?

Juan Carlos Rodríguez: Good morning. Very good, fine. Thank you very much for inviting me to talk about my country, what we can do, and the investments made in the last few years.

LATAM FDI: Juan Carlos, could you please tell us first about yourself and the organization that you represent?

Juan Carlos Rodriguez: I represent a services free trade zone in Montevideo. Geographically, it is between two giant countries. Uruguay is a very small country of 3.5 million people between Brazil and Argentina. Since the times that it was a Spanish colony, it has been a country for services. Uruguay gained its independence in the 19th century and is focused mostly on providing global services.  We are also a very touristic country.  We are one of the most politically stable countries in all of the Americas. We have a great middle class. All our public schools and university are free of cost. Every child at school has a laptop. This was instituted over 15 years ago, and we are working for the world.

We are recognized for three or four main things. We are a logistic hub for the region. So many multinational companies are working from here, as is the case with places like Hong Kong, Hamburg, Miami, and Long Beach. Montevideo Freeport is a very stable place, and we are developing business from here to the rest of the region. The second thing is we are a free trade zone country. We have a very stable country and a 100-year-old legal frame framework that makes investing in Uruguay secure.

Countries that establish themselves in Uruguayan free zones do not have any kind of taxes from the day they initiate their operations until the future. That means they do not have to pay corporate tax and asset taxes. These incentives give multinational companies the impetus to establish themselves in the region and the state. And the third thing that makes investing in Uruguay a great option is our people. That’s real value. Imagine that all our children are learning English from the very first day of primary school. Additionally, we work during the same hours and occupy the same time zones. We are in the middle, between east and western US states, which gives companies investing in Uruguay a great advantage. The location is the fourth point we can discuss, as we are half an hour from Buenos Aires. We are 2 hours from Sao Paulo. We are 2 hours from Asuncion, Paraguay, and Santa Cruz, Bolivia. Additionally, we are 4 hours from Lima, Peru. So, when we are talking about location, location, and location, that is a huge advantage for companies investing in Uruguay that are seeking to do business throughout South America. Finally, technology is important. We are developing a real technological hub for companies that are investing in Uruguay. Many billionaire companies have invested in Uruguay in the last ten years.

That idea gives you an overview of how our country has developed recently.

LATAM FDI: Most people have a tendency to think of manufacturing when they think of free zones. Your free zone is different. Can you tell our audience what the Aguada Park Free Zone is involved in?

Juan Carlos Rodriguez: We can say two or three things when discussing free trade zones. The first thing is yes, manufacturing was a huge investment in free trade zones in the country. But two or three companies have done this.  That is all. They have come from Europe, from places like Sweden and Spain. Pepsi has a huge factory in a free trade zone. But real development or the increasing free trade zone activity in Uruguay has occurred for the last 40 years. It started with logistics because the taxes were why they came to distribute goods from Europe, the States, and Asia. They were in a hub and investing in Uruguay in the free trade.

So that has increased real value to our population because there are some careers in the university that began providing professional people directly to businesses for this new job. For example, the  German company BASF has 60 locations in different places around the world and decided some years ago to have three locations Kuala Lumpur, Asia, Berlin for Europe, and Montevideo for the Americas. So today, the Uruguayan people are looking for factories and providing services to those in the United States. So, the people of Uruguay have a high level of education. I think that companies investing in Uruguay will find that the country is rich with a good population. For its size of 3.5 million people, Uruguay is tailor-made to provide global services. When we say it, we are a boutique country. We are not a place for car assembly. We are not a huge population consuming million and millions of dollars worth of goods in our supermarkets. Those investing in Uruguay will find that we are global service providers. And in another way, we are a tourism-driven country. We receive more than three or four million visitors per year. This is more than the population of the country. Why? Because we are secure.  During the pandemic and over the last four years of the pandemic, the experience of Uruguay can serve as a case study.

Freedom, responsibility. I don’t know if it is exactly in a way, say in English, but what does it mean when the worst part of the pandemic of COVID came? The president said please stay at home, but you will not be obliged; we ask you. We got the first vaccine in Uruguay before Brazil, before Argentina. Our leadership dealt with the people of Pfizer in a really marvelous way. We had almost no death in Uruguay

This made billionaires and the richest businessman in Brazil and Argentina come to stay in Uruguay. So today, it is incredible that we have more than 60,000 families of the richest families in the region with us.  This is because they are safe to go bicycling. They are safe at the beach. They can be secure and do not have to have bodyguards. We do not have arms. You can see we are first in all the social variable rankings.

Something that we are proud of is that there is no corruption in our politics, and we do our best.  Corrupt individuals go to jail.

Those investing in Uruguay will note that the country has political unity. Perhaps you can see four or five presidents of different parties in the same reception. All join in together. This gives the country a culture of maturity, stability, transparency, and the acceptance of the political ideas of one president by another.  Differences do not matter. They must be unified because they must defend the democracy of our country. So, I imagine these different small things are important when you are in the middle of two giant countries like Argentina, which has almost 50 million people, and Brazil, which has more than 200 million people. Well, there’s business. These two large countries have a significant volume of business. Investing in Uruguay is a marvelous platform to develop from here to the South Cone and Latin America in its totality. Perhaps not for a manufacturing factory, but perhaps for shared service centers and corporate headquarters.

LATAM FDI: When I listen to you, I think of companies that have facilities in places far from the United States. They have them in places like the Philippines and India. And other locations that don’t share the same time zones, that share different cultures. When I look at Uruguay, Uruguay is in the same time zone as the United States. It is a place that, in my estimation, companies that do business in these very faraway locations should look at. Companies may be listening to this podcast and have an interest in Uruguay. After hearing your description of the country and investing in Uruguay, what do they have to know about the free zone program in the country? What are some of the incentives that are part of that program?

Juan Carlos Rodriguez: First of all, that’s very easy to work inside free trade zones in Uruguay. Why? Government has a defined program, and under it, companies receive incentives. What are they? You will not have any kind of taxes to pay. Tata from India has almost 2000 people in Latin America, and they do not pay taxes in Uruguay.  Free zone status guarantees fiscal benefits for the contract period that has been agreed upon. I can say you that investing in Uruguay is very easy on the one hand. Other points are the good quality of people and location. This is in addition to good infrastructure. It is the same kind and quality of infrastructure you are accustomed to in the States, the same kind of quality.

LATAM FDI: Well, you’ve given us a really good overview of what people can expect to find in Uruguay. When people listen to these conversations, I’m sure further questions come to mind. Would people with further questions on Uruguay be able to contact you and communicate with you to learn more about investing in Uruguay?

Juan Carlos Rodriguez: Sure, I will gladly receive questions. Your listeners can contact me by email or by the Aguada Park website. It’s very easy. It’s in Spanish and in English. I can be contacted directly or through my team. Also, we usually travel to the States and visit companies and places because we have some customers there.

LATAM FDI: Well, what we’ll do to make all this information visible to people is in the section with the podcast transcript. We usually include the contact information of the person that is speaking with us. We’ll put your email address and your website, and if it’s okay with you, maybe a link to your LinkedIn page as well.

Juan Carlos Rodriguez: Perfect. My name is Juan Carlos Rodríguez. My email is jcrodriguez@aguadapark.com.

LATAM FDI: Well, thank you for joining us today. This discussion about investing in Uruguay has been very interesting. It is a country that maybe a lot of people don’t know much about, but hopefully you have fed their curiosity, and they’ll have reason to contact you with more questions.

Juan Carlos Rodriguez: Thank you very much. Steve, you’re always helping to develop Latin American countries. Thank you really very much. And for everyone that comes to Uruguay, you will find a very friendly country. It has very good meat, and marvelous weather where you can pass your time and visit different beautiful places. And thank you very much.

LATAM FDI: Thanks, have a great day.

Juan Carlos Rodríguez: Thank you.

Veronica Medina
Founder and CEO
Business Hub Consultants
vmedina@businesshubconsultants.com

LATAM FDI: Hello. Welcome to another episode of the LATAM FDI podcast. In these recordings, we speak to experts in business and economic issues throughout Latin America. Today we have Veronica Medina with us. We feel very fortunate to speak with her. She’s the founder and CEO of Business Hub Consultants. She’s located in Santiago, Chile. And I’ll just let her introduce herself and her company to you, and then we’ll have a discussion about doing business in Chile.

Veronica Medina: So, hello, everyone. Thank you so much for having me here with you today. I’m back in Santiago after doing a full month of traveling to see our clients. We hadn’t seen some of them in four years due to the coronavirus pandemic. As I said, I am the founder and CEO of Business Hub Consultants. We are a consulting firm based out of Santiago, Chile. We also have offices in Lima, Peru, covering mainly Spanish-speaking South American countries. I would say about 85% of our work is helping foreign companies that are interested in doing business in Chile and other countries in the region. We do a large proportion of work with American companies. We help them do business in South America by connecting them to service distributors and end clients. We help them in several ways. What are their strategies for doing business in our countries? We help them with regulations and do all of the research and assistance that companies require to do business in this exciting environment in South America. We think we could be a good conduit, specifically after the pandemic for the United States and bringing its logistics and suppliers closer to home.

LATAM FDI: Well, it’s interesting that you have activities throughout the region, but today we will focus on doing business in Chile. Maybe you could tell our listeners about the investment trend that’s been occurring during the past year in Chile. How have things been there?

Veronica Medina: Yes, we just had some reports from our Central Bank with very positive results. I don’t know if some of us were quite surprised by our good results, but, for example, the FDI inflow up to February of 2023 was higher by close to 50% than in the same period last year. And also, FDI in the full year of 2022 increased by 31% to close to $21 billion over the previous year. Additionally, that figure is 50% above the average for the last five years. So, I think very good results have been achieved.  This is evidence that doing business in Chile is still very attractive in terms of bringing investment into the country. We currently have about 500 investment projects in Chile in the pipeline in different stages of development. The top three sectors are energy and global technology services. The third is mining and mining suppliers. And the top investors in Chile are actually the USA, which solidifies the trade and investment relationship that we’ve had with the USA for decades. China follows this, and then in third place is Canada. So, we’re very excited by those results. Doing business in Chile is still an attractive option for investors.

LATAM FDI: That sounds very positive. It seems to me that there was some trepidation with respect to political changes that have occurred in Chile recently. But given what you just said, it seems like we can assume that there’s still a lot of confidence in the country’s economy and doing business in Chile.

Veronica Medina: Absolutely. We’ve also just got in numbers for import-export trade. Those numbers are also breaking records. So, again, we’re coming out of the coronavirus pandemic, and as you say, rightly. I don’t want to dismiss Chile’s political challenges over the past years; your listeners might be up to speed. We just had our referendum this Sunday regarding the new constitution that will be written. We had to go vote for the constituents that would be writing that constitution. And I must say that yesterday, Monday, May 8, 2023, the stock exchange opened positively by 2%. So, the market seemed to be reacting quite favorably to an issue that is obviously important to many businesspeople. Experts have mentioned that our rewriting of the constitution might cause investment projects to be put on standby. Right, because you’re rewriting the Constitution. But I also think that with the results on Sunday and obviously with some of the numbers I’ve just given, thankfully, it seems that we’re proving all of those things wrong.

LATAM FDI: It’s great to hear that. You mentioned a few minutes ago in passing some of the economic sectors that stand out for doing business in Chile. If people are looking at the country in terms of potential investment, what should they look at in the short term, and also, what should they look at in the long term?

Veronica Medina: Yeah, well, I think, as I mentioned, the top investment portfolio where the projects are, is in the energy sector. The tech services sector here has grown not just in terms of investment, but we’re also looking at a kind of commerce. Right. It’s not just the investment. So, companies are looking to sell their products or their technologies in the market. We are seeing these trends in energy, in tech, and in mining. Just a few weeks ago, here in Santiago, we had Expo Min, which is one of the largest trade shows in LATAM for mining. It was really the first one that had been done since the end of the coronavirus pandemic. And we had a lot of international pavilions. American companies were represented well in the US pavilion at that show. I would tend to say that those are the industries that will continue to be a focus. Agtech as well. If you’re looking for investment in Chile, Agtech is also key. But regarding the development future, we have great potential because of our lithium reserves for use in electric vehicles. The government has very strong environmental and climate change regulations and is net zero. I think all those industries related also to clean technologies as such will continue to grow.

LATAM FDI: The market appears to be active in these particular industries. What advice would you offer investors looking at doing business in Chile, and what can you as a company do to help them?

Veronica Medina: Yeah, well, I think obviously you have to do due diligence. You can’t go into a market blind and must assess the risk in your particular industry.  You must also be connected with someone local on the ground, right? Someone with the networks in the industry or industries you’re trying to engage in doing business in Chile. Even though Chile is a very open economy, it is important to remember that we have the most free trade agreement signed in the world. And as we mentioned before, the relationship with the United States and with American-made products and technology is very well known here in Chile.  I still think that they are highly regarded. We, as a company, always tell our clients that they should have somebody on the ground when considering doing business in Chile. And that’s where we can help with those connections. Getting you connected to the right people in the right industry, in the right position within, whether it’s large companies, SMEs, or even at a government level. We’re here to also help you with doing due diligence in the market and looking at the opportunities for you. Is Chile the right place for you to be, right?

LATAM FDI: Considering juridical factors and concerns, how does Chilean legislation favor investors?

Veronica Medina: I mean, Chile has, again, with what I mentioned regarding the openness of its economy for decades now. We welcome investors, and foreign investors are treated just the same as local investors in the country. Investment is pretty much permitted in all sectors of the economy. There are some tax benefits in certain regions of the country if the investment is done in those zones. There are some tax incentives if you are doing high-tech projects or R and D, and obviously, kind of the economic zones in the north and in the south of the country that also have very good favorable regulations and tax incentives for companies to go into those special trading zones aimed at doing business at Chile.

LATAM FDI: Speaking of incentives, can you give some specifics?

Veronica Medina: For example, if you’re doing R and D in your company, you can get tax credits for 30% of the R and D investment that your organization is doing. So again, Chile is a highly technological-based society. We are actually ranked number one in LATAM for innovation. So, there are tax incentives for anything that has to do with R and D, with technology development. Also, working with Corfo, the Chilean economic development agency, there might be some subsidies for companies to tap into there.

LATAM FDI: Well, given all of the information that you’ve shared with us now, my experience has been that when individuals listen to these podcasts, the information that the speaker has offered obviously leads to other questions. That being the case, and you being the go-to person for South America and doing business in Chile, how can people contact you to get more information that they may need to proceed with their business plans?

Veronica Medina: Well, absolutely. We have our website, which actually has some great also insights into doing business in Chile. We have country fact sheets there. We have industry fact sheets as well for the region. And the website is businesshubconsultants.com. My email is vmedina@businesshubconsultants.com. And obviously, through you, Steve, people can get in touch with me through you since now we are also working together and trying to promote this great region.

LATAM FDI: Well, thank you very much. Another thing we’ll put up on our transcript portion on our website of this particular conversation is your LinkedIn page, a link to that if that’s okay.

Veronica Medina: Perfect. Okay, absolutely. Anyway, you can reach out to me. I know I’m based in Chile. I’m also Chilean by birth. But I must say it’s a great country to do business in. We continue to have the highest GDP per capita in the region. We’re the number one country for ease of doing business in the region. You were talking about clean tech and energy. We’re the number one country and renewable energy investment in LATAM. And number two in the world. So, I think there are really some exciting things here, such as lithium and green hydrogen. There’s a lot to be done here in Chile now.

LATAM FDI: Well, thank you for joining me. This has been a very interesting conversation. I’m sure that the listeners will find it to be interesting as well.

Veronica Medina: Perfect. Thank you so much. Thank you, everyone, for listening.