Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Last Published: 1/9/2020

Drawbacks to doing business in Uruguay include its small market size (3.4 million inhabitants, approximately half of which reside in the capital Montevideo), lack of trade financing, and inflexible labor laws.  These labor laws give unionized labor the right to occupy workplaces and disrupt company operations. In 2018, some companies were forced to close due to high production costs and labor conflicts.

Related to labor inflexibility, the World Economic Forum’s 2016-2017 Global Competitiveness Index ranked Uruguay 131th of 137 countries, echoing many domestic and foreign investors´ concerns about management-employee relations.  There are labor challenges in the areas of hiring and firing practices, limited flexibility in setting wages, wage inflation resulting from the work of tripartite salary councils, and the effects of significant taxation and social contributions on the individual’s incentive to work.

Uruguay has high duties and taxes on imported products; the government raised both in 2017.  According to Doing Business Index 2018 and in relation to the “trading across borders” category, Uruguay was ranked 151st of 190 countries, due high export and import costs.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.