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Free Zones are part of a set of policies to promote investment in Uruguay, among which the Investment Promotion and Protection Act, the Free Port and Airport regimes, the Public-Private Partnership Act (PPP) and the Industrial Parks Act are included.
Free Trade Zones (FZs) play a key role in the attraction of investment, the generation of qualified employment and the diversification of the country’s exports. The export of goods from Uruguay to the FZs went from representing 3% of total sales in 2004 to 18% in 2014 when they amounted to US$ 1,659 million. This increase is mainly explained by the sale of grains to Nueva Palmira and Fray Bentos FZs respectively. Moreover, since 2014 the sales of wood to Punta Pereira FZ gained importance due to Montes del Plata beginning operations.
List of Free Zones:
There are currently 12 FZs in Uruguay: Nueva Palmira (State), Fray Bentos (UPM), Libertad, Punta Pereira (Montes del Plata), Colonia, Colonia Suiza, Floridasur, Rivera (under state control), Zonamerica, WTC Free Zone, Parque de las Ciencias and Aguada Park. Two of them were created before the FZ Act, in connection to the port in the Colonia province (Nueva Palmira and Colonia).
The first Free Zones in Uruguay began as logistics clusters, but over the years other FZs emerged, providing services to foreign countries and Uruguay, as is the case of outsourced administrative activities, call centers and software development activities, among others. Currently, FZs conduct an ample variety of activities, with a high potential for future growth. Based on their characteristics, Free Zones can be classified into four types: Industrial; Trade and Logistics; Global Services; and Mixed.
A- Industrial: These are the FZs where most of their production value is industrial. In Uruguay they are: Rivera, Colonia (PepsiCo), Fray Bentos (UPM) and Punta Pereira (Montes del Plata).
Rivera Free Zone: It was created in 1993 and is currently under government control. It is located in a forest area 7 km. away from the city of Rivera and 400 km. away from Montevideo. It has a 14,000 sq. m. warehouse area for storage. The main company in the FZ, Tingelsur S.A., conducts sawmilling activities.
Colonia Free Zone: Managed by Grupo Continental Zona Franca S.A., is a modern 22-hectare park with 130,000 built sq m. A vast array of activities in this FZ revolve around industrial sector activities, although other types of commercial and logistics activities based on date from Free Zone Department – General Directorate for Commerce – MEF and Free Zone Chamber.–I are also carried out. Strategically located just 50 minutes from Buenos Aires, the FZ has access to several roads.
PepsiCo: has been located in Colonia FZ since 1993, from where it produces concentrates for the manufacturing of beverages, generating the majority of the FZ’s added value. It currently employs 118 people.
UPM Free Zone - Fray Bentos S.A.: This is where the Finnish enterprise UPM operates from. It has a production capacity of 1.3 million tons of bleached short-fiber eucalyptus pulp. At a global level, UPM has production plants in 17 countries and its annual sales exceed € 10 billion. In 2009 UPM acquired the majority shares of Botnia S.A. The plant, located in Uruguay, began operations in 2007 and is the company plant with greater production capacity. In Uruguay, UPM employs 550 people directly and over 2,800 in its production chain, among which nurseries, forest plantations, transport, plant and port operations are included. Apart from pulp, the UPM plant produces energy, equivalent to approximately 11% of the total energy produced annually in Uruguay. The annual waste is used by the UTE (Uruguay’s electricity company) 11 Source: Information provided by PepsiCo. networks to provide electricity to over 150,000 homes.
Punta Pereira Free Zone: It is located in the province of Colonia, where the Montes del Plata pulp mill operates. This company is integrated by two of the most relevant companies in the forest sector in the world; Arauco, with Chilean capitals and Swedish-Finnish Stora Enso. The plant has a production capacity of 1.3 million tons of eucalyptus dry pulp. About 700 people work at the plant on a daily basis and the production chain employs about 5,000 people permanently. Plant facilities include an electricity generating unit for self-sufficiency and surplus clean energy exports to the national grid (up to 80 MW approximately), as well as a port terminal.
B- Trade and Logistics:
Florida Free Zone: Located in the province of Florida, 93 km. north of Montevideo, it mainly operates as a distribution center and warehouse. There are currently over 500 companies in this FZ with an area of over 70,000 sq m.
Libertad Free Zone (Lideral S.A.): It is located on km. 49 of national Route 1, which begins in the Port of Montevideo and connects it to Libertad FZ in approximately 30 minutes, allowing for agile logistics at highly competitive costs. It has a plot with container, vehicles and machinery storage areas, storage warehouses for goods and a wide variety of services.
Nueva Palmira Free Zone: This zone is a few meters away from the Nueva Palmira port, next to the mouth of the Uruguay River, a strategic place to access the Parana-Paraguay-Uruguay waterway, one of the main river outflows from Brazil and Paraguay. The FZ can be accessed through route 21, 53 and 12. It is located 270 km away from Montevideo and 110km from Colonia by road. It has a covered grain storage capacity of approximately 280,000 tons. A large amount of goods from other countries in the region are exported from the Nueva Palmira port, particularly soy, wheat, corn and pulp. Facilities of the Nueva Palmira Port12 : » M320 m. long “T” shaped pier. » Exterior Draft: 32". » Interior Draft: 5 meters. » Grain conveyor belt. » Access from the River Plate by Martin Garcia canal with 32" draft. » Automated environmental control for bulk storage of cereals. » Strategic location in Parana-Paraguay waterway.
Aguada Park: Located in the Aguada neighborhood, opposite the Montevideo port and very close to the City Center and the Old City. The FZ is located between the ANTEL Tower (national telecommunications company) and UTE (national electricity company). It has a cutting edge 30,000 sq m. complex specially designed for services. Main clients operate in various sectors, such as software development, call centers, BPO and shared services, financial services, professional services and trading sectors, all aimed at the export of services. The most outstanding ones include: EGS Expert Global Solutions, Globant, MercadoLibre, Corporación Navíos, Banco Itaú, Teyma, Sabre Holdings, Travel Leaders, among many other companies. Aguada Park companies currently employ approximately 2,500 people.
WTC Free Zone: It is strategically located in the city of Montevideo with a world-class building infrastructure which provides customers the possibility of working in the first and only LEED (certified) tower in Uruguay. It has 17,000 sq m. office space, from where currently about 100 leading companies offer their services to the world, some of which are: PwC, Deloitte, TCI Delivery Center, Estudios Energéticos Consultores, Catalent Uruguay, Baker Tilly, Latinbroker, Towers Watson, MVD Consulting, Graco, Bestseller, Galante & Martins Internacional, Trillonario.com, Contract Global Services, G&R Zona Franca among others. Additionally, three of the four major grain traders, leading regional consultants in financial advice and professional studios of various kinds, also render services from this FZ.
Zonamerica: Located in Montevideo, near Carrasco International Airport, Zonamerica is a place where infrastructure, corporate services and its modern business environment offer clients major competitive advantages to conduct business with the region and the world. Zonamerica recently won the Best Free Zone in the Americas for small and medium companies awarded by FDI Magazine from the Financial Times Group. Zonamerica also operates as a magnet to attract qualified talents with technical skills and language competence, essential for the global services industry. There are currently 9,500 people working in Zonamerica in over 300 companies. Companies located in Zonamerica operate in several business areas: Logistics, Financial Services, Information Technology, Call Centers, Regional Offices, Biotechnology, Consulting and Trade in general. Some of the companies in the Park are: Sabre Holdings, Ricoh, Merck, Ocwen,Tata Consultancy Services, Verifone, PWC, Finning, Despegar.com, RCI, among others. Zonamerica has 28 buildings to cater for its clients’ needs. The Celebra Building was recently inaugurated with over 8,000 sq. m. of premium offices. These will have LEED Gold certification, which will make Celebra one of the most emblematic buildings in the country.
Parque de las Ciencias: It covers an area of 55 hectares in the province of Canelones, on Route 101 and only 1 km. away from Carrasco International Airport, in a unique strategic location. Parque de las Ciencias has capacity to accommodate trade, industrial and service activities. It stands out for its modern infrastructure and variety of services, specially designed to enable industrial, scientific, high technology and added value ventures. It also provides facilities for service providers of these ventures. Construction work began mid-2010, and currently there are approximately 50,000 built sq m. in the FZ. The most remarkable buildings are: two modern office buildings, of 6,500 sq. m. and 3,500 sq. m. respectively, a 23,000 sq m. pharmaceutical manufacturing plant, and a state-of-the-art research and development center, unique in the country. There is also a logistics building specialized in pharmaceutical products and medical devices with areas for fractionating, preparation and other related services, and other two buildings for logistics and/or industrial general activities. Construction work began in 2014 for the building of a second pharmaceutical plant, exclusively devoted to manufacturing oncology injections, and a new building for logistic services. Parque de las Ciencias currently has over 25 users, among which there are several pharmaceutical companies, companies in the technology sectors, suppliers of raw materials, medical equipment trading companies, logistics operators and service providers in various areas such as intellectual property, marketing, design and engineering, among others.
Colonia Suiza: It is located in the city of Nueva Palmira and was developed by a mainly industrial business group, with more than 80 years of experience in our country and the region. It has an industrial, commercial, and service park which allows the development of a wide variety of activities. In 2004 one of the largest and most modern publishing industries in South America became part of the park, where hardcover books and high quality graphic material exported globally are produced. Among its client list are: Santillana, Alfaguara, Random House, SM and Planeta.
Read the report about free zones in Uruguay elaborated by Uruguay XXI here.
Cost of installing a business in Uruguay
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