At the Conexión Uruguay–Brazil event organized by El Observador and Piso 22, the growth of investments by Brazilian companies in Uruguay was confirmed, along with their increasing interest in taking advantage of tax incentives such as the Investment Promotion Law.
Brazil has consolidated itself as Uruguay’s most important regional trading partner and the second most relevant globally, only behind China. This is also reflected in the intention of Brazilian companies to establish a presence in Uruguay. ‘We are receiving a large number of investment inquiries from Brazil,’ said Martín Mercado, deputy executive director of Uruguay XXI.
For Sebastián Risso of El Faro Advising, the key to boosting Brazilian investment in Uruguay lies in increasing awareness. ‘Uruguay is a hub for Brazil, but there is enormous lack of knowledge there about the opportunities Uruguay offers to Brazilian companies,’ Risso noted. ‘They ask: Can this be done here?’ added Alejandro Arechavaleta, President of the Uruguay–Brazil Chamber of Commerce, who works daily with business leaders from the South American giant and perceives the same curiosity among Brazilian entrepreneurs.
Over the five-year period from 2019 to 2024, investments surged. In 2019, the stock of Brazilian investments amounted to US$ 2.5 billion, and by the end of 2024 it had reached US$ 4.4 billion. ‘There was an increase of almost US$ 2 billion in just five years,’ Mercado pointed out.
This became even more evident recently with ‘two major investments that have São Paulo looking toward Uruguay,’ Risso emphasized, referring to the multimillion-dollar acquisitions of Enjoy Punta del Este by JHSF Fasano and HSBC by BTG Pactual, which act as magnets for Brazilian investment.
Over the years, major firms such as Minerva, Marfrig and Itaú have also joined this trend. ‘Brazilian companies generate around 16,000 jobs, and we are close to 120 Brazilian companies established in the country — that is the weight Brazil has in Uruguay’s investment landscape,’ Mercado highlighted, agreeing with Risso that Foreign Direct Investment is a key driver of Uruguay’s growth.
Arechavaleta, speaking from the Uruguay–Brazil Chamber of Commerce, stressed the importance of having an organization that represents Brazilian entrepreneurs in Uruguay. Its role is essential to facilitate the — more complex — process for Uruguayans when they want to expand into Brazil. ‘Here we all know that you knock on two doors and reach anywhere; in other countries that is not so common, so companies need proper representation.’
‘I want to go to Uruguay and I want you to show me what I can do there.’ This is the most frequent request Risso receives at El Faro Advising. Investors often arrive without a specific idea but with the intention of exploring the market.
Paraguay is another country they mention, but in this regard, Uruguay’s institutional solidity tends to tip the balance in its favor.
‘They cannot wrap their heads around the idea that there is a free zone for exporting services — for them, a free zone means Manaus: packages on the floor and absolute chaos,’ Risso explained. The same happens with regimes such as free airport and free port operations: ‘They cannot believe that a shipment arrives from China and the only documentation needed is the bill of lading,’ and that the owner of the goods may be Chinese but uses Uruguayan warehouses to reach the region more easily.
Companies from all sectors of the Brazilian economic spectrum show interest in Uruguay: services, production, logistics. They often arrive without a specific plan but with the intention of visiting Uruguay and, above all, exchanging experiences with other Brazilian entrepreneurs already operating in the country.
‘Brazilian business leaders are maturing in terms of beginning to view their operations through a regional or international lens — something that did not happen until recently and is related to recent tax changes and their implications,’ Arechavaleta noted. He highlighted dynamism in financial services, technology and logistics. ‘There is significant movement in logistics due to tax changes in Brazil that make it more convenient to operate part of the business from Uruguay,’ he added.
How significant are the incentives for Brazilian investment in Uruguay?The Investment Promotion Law is the main tool related to tax incentives for attracting investment. ‘In the past 20 years, COMAP has approved 175 projects of Brazilian origin totaling around US$ 1.3 billion.’ From 2023 to 2026, 42 projects worth US$ 600 million were approved. ‘There has been an acceleration in companies seeking tax benefits,’ Mercado emphasized.
The most important factorUruguay’s political stability and legal security are the elements that set the country apart — especially in the context of elections in Brazil, where tension is higher, the three speakers at the Conexión Uruguay–Brazil event highlighted. ‘It is a very important attraction and strengthens Uruguay as a regional — and perhaps global — investment hub for many companies,’ Mercado stated.
For Arechavaleta, this institutional solidity is ‘what generates the greatest value in the region’ and ‘its most important asset’ when negotiating.