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Clear and reliable rules of the game, Uruguay’s main asset

Wednesday, August 19th 2009 - 12:46 UTC
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Uruguay remains as a most attractive country for Argentine investors because of its business opportunities, logical taxing system and absence of export levies plus its geographical closeness, according to Luis Bonetto Argentine investment advisor and expert in agriculture.

When the world is still facing the worst global crisis since the Great Depression, Argentines linked to the agro business have found refuge in neighbouring Uruguay which has proven long term stability, a reliable taxing system, no export levies and multiple business opportunities, underlined Mr. Bonetto, interviewed by Uruguay-Properties.

Nevertheless Bonetto also pointed out that the same success of Uruguay calls on investors to “be cautious at the moment of making investment decisions” since operational margins are not as significant as “when the first wave of Argentines decided to explore conditions for their business in Uruguay”.

Agronomist Eduardo Blasina from the agriculture consulting group Blasina and Tardáguila, based in Montevideo believes Argentine investors will continue to come to Uruguay for very basic reasons: “a strong independent judicial branch, clear rules of the game, political stability, common sense taxes which unfortunately can’t be said of our neighbours; this is in essence Uruguay’s main asset and attraction plus the fact that there is good farm land for cereals, oil seeds and livestock”.

For almost two years now, Argentines farmers have been confronted with the administration of Presidents Nestor Kirchner and Cristina Fernandez de Kirchner over export taxes, tolerable when windfall earnings following the surge in international commodities prices, but no longer as prices have tended to stabilize downwards and costs have caught up.

Mr. Blasina believes the current global crisis which broke out in the US is extending to the rest of the world bringing a certain degree of “uncertainty”, which makes investors extremely cautious about where they put their monies.

“Some people consider that the real estate sector and the commodities sector were overvalued and now they are waiting for a gradual fall in land prices. But on the other hand the uncertainty factor has many people searching for alternatives to avoid financial risks”, said Blasina.

“It is then when they decide to invest in real estate, properties and land. This makes me believe investors will continue to arrive in Uruguay, trying to avert financial risks in a country where the rules of the game are clear and reliable”, he concluded.

Source: Uruguay Properties

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