28 November 2011

Who is coming to Uruguay and Why?


More people are coming to Uruguay in 2011 than in past years. More Uruguayans are returning to Uruguay from abroad and more foreigners are seeking residency, and it looks like it could be the beginning of a trend. The purpose of this article is to provide you with a perspective of who is coming to Uruguay and why.

Returning Uruguayans 

The largest group of people coming to Uruguay in 2011 is returning Uruguayans. There are over 600,000 Uruguayans living outside of Uruguay. Most of these expat Uruguayans left Uruguay for better work opportunities in fully developed countries, with peak exoduses occurring during difficult economic times, such as the 2002 regional financial crisis. Spain, the United States, and Australia have been the most popular places for Uruguayans to work abroad.

However, with the slow down in the number of jobs available in Spain and the US (combined with the lowest unemployment rates in Uruguay’s history) many Uruguayans are coming home.

According to estimates by the Uruguayan government, the number of returning Uruguayans increased 300 percent in 2011 over 2010. The Uruguayan departments that provide 12 months of free health services and job training for returning Uruguayans with low means is serving an average of 350 new arrivals per month.

While better paying jobs is the incentive that has lured Uruguayans away from Uruguay - family, friendship, and national identity are the big attractions for Uruguayans to return.

Uruguayans, like many people from Latin America, strongly value family closeness. It is common for grandparents, parents, and children to get together weekly and to stay in regular contact during the week. I have met several Uruguayans who came back to Uruguay to raise their children after working abroad. Others after working an entire career abroad, return to Uruguay to be close to family and friends.

Foreigners immigrating to Uruguay 

In the last couple of years the annual number of applications for Uruguayan residency has also gone up at a rate of more than 300 percent. Where are these new immigrants coming from and why are they coming to Uruguay? Following are some of my personal observations:

Foreigners coming to Uruguay to invest
Uruguay has long been a popular place for real estate investors from Argentina and Spain, and more recently from Brazil, other European countries (in addition to Spain), and North America. While many investors do not live in Uruguay, some have stayed to improve, manage, and administrate their real estate holdings.

Foreigners coming to Uruguay to work
Uruguay has the highest rate of Foreign Direct Investment, as a percent of Gross Domestic Product, in Latin America. Many international companies are setting up and expanding their operations in Uruguay, or making Uruguay their regional base of operations. While most of the workers for these companies are Uruguayans, there are also many specialists coming to work that include corporate officers, professionals, consultants, trainers, and specialized maintenance personnel. Some of the companies starting out or expanding in Uruguay are from the United States, China, Scandinavia, and India.

In addition to private sector employment, government embassies and regional commissions with a presence in Uruguay also bring in foreign workers.

There are also workers from less developed countries in South America like Paraguay and Peru who immigrate to Uruguay for higher paying jobs with benefits. All workers in Uruguay receive full medical coverage, disability insurance, and retirement payments.

Foreigners coming to Uruguay to start a business
Latin America, as a region (with low sovereign debt, young populations poised for work, rapidly increasing consumer spending, and an abundance of natural resources), is expected to have one of the highest rates of economic growth during the coming decade. The Southern Cone of South America (which includes Chile, Argentina, Uruguay, Paraguay, and Southern Brazil) has the greatest rate of growth in the region. Many people favor Uruguay for its central Southern Cone location, as well as its relative stability, safety, and low level of government corruption.

While many large international companies are investing and expanding in the region, there are also individuals and small companies starting a business in Uruguay. Following are a few examples of where people are coming from and what types of businesses they are starting.

  • Small businesses and individuals from India and the USA have come to Uruguay to enter joint ventures with Uruguayan software companies. 
  • People from Scandinavia, Australia, and England have come to Uruguay to start international online businesses. 
  • People from China and the Middle East are coming to Uruguay to start food export businesses. 
  • A Hungarian recently came to Uruguay to start a solar panel installation business. 

Also, many foreigners who came to Uruguay for love, family, and culture started a small business as a way to support their life in Uruguay – but did not come to Uruguay specifically for the purpose of starting a business. Among these businesses are professionals, personal services, restaurants, and retail stores.

Foreigners coming to Uruguay for greater safety and financial security 
The crime rate in neighboring Argentina has gone up significantly in recent years. In addition to the increase in crime, Argentina has been experiencing high rates of inflation and the government has started putting capital controls in place. While most Argentines have a high level of national pride, some are moving to Uruguay for greater safety and financial security until the situation in Argentina improves.

Foreigners coming to Uruguay to retire 
According to the Legatum Institute, Uruguay is the best place to live in South America. Uruguay has a variety of attractive lifestyle settings for retirees, which include Uruguay’s capital, Montevideo, a variety of unique beach communities, and the Uruguayan countryside. Most foreign retirees in Uruguay are from Western Europe and North America.

Montevideo, Uruguay's capital city  
Montevideo is a small city of 1.8 million people with interesting architecture, lots of squares, parks, museums, modern shopping centers, a waterfront promenade, and great places to eat. For the evening there are many cinemas, live theater events, and nightclubs. The city has good bus service and several hospitals, including the renowned British Hospital.

Uruguayan beach communities 
Uruguay has many unique beach communities including Punta del Este, South America’s most popular beach resort, which is also becoming a year-round international city. In addition to Punta del Este, some retirees are choosing to live in smaller beach communities such as Piriapolis and Atlantida.

Uruguayan countryside 
Most of Uruguay is cattle land and farmland with many small farms and rural properties that are manageable for an active retiree who wants to live close to the land. A few of the most popular places for foreigners to buy small rural properties is near Punta del Este, near Valley Eden, and near Atlantida.

The Blend 
In this article I have tried to isolate some of the reasons that people are coming to Uruguay. In real life, however, the reasons usually intermingle. Economic opportunity, love, family, culture, specific threats, and specific opportunities all mix together.

Are you a returning Uruguayan? Have you relocated to Uruguay? Your comments are always appreciated. 

1 comment:

Benay said...

Up 300% from 2010 is amazing!

Thanks again for the on the ground perspective.

-B