Uruguay - Country Commercial Guide
Digital Economy
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Overview

Introduction

Uruguay’s digital economy has been rapidly evolving, positioning the country as a key player in Latin America’s technology landscape. With robust digital infrastructure, a stable political environment, proactive government policies, and a growing presence of large international companies, Uruguay presents significant opportunities for U.S. companies looking to expand their operations in the region. However, challenges, including regulatory complexities, market size, and market entry considerations, must also be taken into account. This report provides an overview of Uruguay’s digital economy and explores the opportunities and challenges that U.S. companies may encounter.

a. Brief Overview

Uruguay has established itself as a leader in the digital sphere within Latin America, earning top rankings across several key areas. According to the UNDESA Survey, Uruguay is ranked first in Latin America for digital government and leads the region in the Government AI Readiness Index. The country also stands out in cybersecurity, ranking fifth in the Americas according to the Global Cybersecurity Index (GCI). Uruguay’s commitment to transparency and open government is also recognized, as it ranks first in Latin America on the Open Data Barometer and was the first country in the region to join the Digital Nations, a global coalition of digital governments. Uruguay is an active member of international networks such as REDGEALC (the Latin American and Caribbean Network for e-Government Development) and the Open Government Partnership (OGP).

Furthermore, in April 2024, the Department of Commerce and the Department of State of the United States and the Ministry of Foreign Affairs and the Ministry of Industry, Energy, and Mining of Uruguay signed the U.S.-Uruguay Memorandum of Understanding (MoU) Concerning Cooperation on Select Critical and Emerging Technologies to demonstrate their shared commitment to advancing innovation, sustainability, and economic opportunity; and increasing trade. The MoU seeks to increase cooperation and chart a concrete path forward on the development and deployment of select critical and emerging technologies including semiconductors, artificial intelligence, data flows, clean energy, telecommunications, cybersecurity, and biotechnology.

b. National Focus

Regulatory Framework  

  • Personal Data Protection Law (Law N° 18,331): Regulated by its Data Protection Authority called Unidad Reguladora y de Control de Datos Personales (URCDP), this law regulates the treatment and protection of personal data in Uruguay. It establishes guidelines for how both public and private entities must handle personal information, ensuring the privacy and security of individuals’ data.
     
  • International Data Transfers: Uruguay’s law allows international transfers of data to countries with adequate data protection standards and is recognized by the EU for providing adequate protection. Uruguay has deemed the U.S. adequate by virtue of the 2022 EU-U.S. Data Privacy Framework (DPF), meaning any company certified under DPF have ‘adequacy’ with regard to data transfers between Uruguay and the United States.
     
  • Access to Public Information Law (Law N° 18,381): This law guarantees the public’s right to access information held by the state. It promotes transparency by making government information publicly available, with certain exceptions related to privacy and security.
     
  • Digital ID and Electronic Signature Law (Law N° 18,600): This law provides the legal framework for the use of digital identities and electronic signatures in Uruguay. It defines the validity and use of electronic signatures for authenticating digital documents and transactions.
     
  • Information Security Law (Law N° 18,719, Art. 149): This law focuses on the protection of information within the public sector, ensuring that state-held data is secure from unauthorized access and breaches. It establishes the responsibilities of public entities in safeguarding information.
     
  • Interoperability Law (Law N° 18,719, Art. 157-160): This set of articles within the law outlines the standards and protocols for data exchange between public and private entities in Uruguay. It promotes the seamless sharing of information across different systems and organizations.
     
  • Digital Services Law (Law N° 19,355, Art. 73-80): This law regulates the provision of digital services in Uruguay, including e-government services. It establishes the guidelines for delivering public services through digital platforms, aiming to improve accessibility and efficiency.
     
  • National Digital Health Records Law (Law N° 19,355, Art. 466): This law mandates the creation and maintenance of digital health records for citizens. It ensures that medical information is securely stored and accessible to authorized healthcare providers across the country.
     
  • Telemedicine Law (Law N° 19,869): This law provides the legal framework for the practice of telemedicine in Uruguay. It defines how medical services can be delivered remotely using digital technologies, ensuring that such services meet quality and safety standards.
     
  • Digital SAS (Simplified Stock Corporation) Law (Law N° 19,820): This law introduces the Digital Simplified Stock Corporation (SAS), a new legal structure that allows businesses to be incorporated and managed entirely online. It simplifies the process of starting and operating a business in Uruguay.
     
  • Accessibility (Decree 406/022, Art. 88, Law N° 19,924): This decree, as part of Law N° 19.924, mandates that digital services and content provided by the state be accessible to all citizens, including those with disabilities. It sets out the standards for ensuring that public digital platforms are inclusive and usable by everyone.

c. Digital Economy Overview  

Uruguay’s government has prioritized digital transformation as a cornerstone of its economic development strategy. This priority has continued through administrations across the political spectrum and is considered a state policy. Since its creation in 2007 as an executive unit under the Presidency of the Republic of Uruguay, AGESIC, the Agency for E-Government and the Information and Knowledge Society, has led the country’s digitalization efforts. One of their flagship policies is the creation of Uruguay’s Digital Agenda. “Agenda Uruguay Digital 2025” outlines the country’s vision for integrating digital technologies across various sectors, enhancing connectivity, and fostering innovation.

Uruguay’s digital infrastructure is among the most advanced in Latin America, with nearly universal high-speed internet coverage (91 percent of homes have high speed internet access) and ongoing investments in 5G technology. This creates a strong foundation for the continued growth of the digital economy, which is expected to expand by 10-15 percent annually over the next five years, driven mainly by both domestic and international demand for its ICT services. The country has positioned itself as a regional leader in software development, fintech, and e-commerce, with a growing number of tech companies in these fields.

Uruguay’s state-owned telecommunications company, ANTEL, has one of the best data centers in Latin America (boasting several international certifications) and four submarine cables in operation: Unisur and Bicentenario (installed in 1994 and 2011) connect it to Argentina, and the Tannat and Firmina cables co-developed with Google that connect to the United States through Brazil. The Firmina cable enabled better connectivity and data traffic of Google products in a faster and more secure way, boosting Google’s infrastructure in the region. In September 2024, Google also announced the construction of their first data center in Uruguay, its second in Latin America.

In 2023, Uruguay’s e-commerce sector mobilized over one million dollars through 42.5 million transactions, accounting for 1.5 percent of the country’s GDP. This marks a 22 percent increase in online sales compared to 2022. The first quarter of 2024 saw a 36 percent year-over-year growth, with 7 out of 10 Uruguayans making online purchases.

The Uruguay Innovation Hub (UIH) was established in 2021 by the Uruguayan government under the leadership of the Ministry of Industry, Energy, and Mining. The initiative aims to position Uruguay as a leader in the knowledge economy by fostering innovation and collaboration among various stakeholders, including startups, research institutions, and international partners. The UIH focuses on several key areas such as: Startup Acceleration, R&D Grants, Innovation Challenges, Talent Attraction, Collaborative Networks, and International Partnerships. These efforts aim to create a vibrant ecosystem that drives technological advancements and economic growth in Uruguay.

Uruguay has made significant strides in digital services to enhance government efficiency and citizen access:

Electronic Health Records: This system allows healthcare providers to access and update patients’ medical records electronically, improving the quality of care and facilitating the sharing of information among different healthcare institutions.

Electronic Billing: Businesses in Uruguay are required to issue electronic invoices. This system simplifies tax reporting, reduces fraud, and streamlines administrative processes for companies and the government.

Electronic Records: This digital file management system enables the electronic processing of documents and procedures within government agencies. It helps reduce paper usage, speed up administrative processes, and improve transparency.

Online Procedures: Uruguay offers various online services for conducting administrative procedures, such as applying for permits, paying fines, and accessing official documents. This system makes it easier for citizens to interact with government services without needing to visit physical offices.

Ceibal Program: This initiative provides students and teachers with digital tools, including laptops and educational resources, to every student enrolled in public education. The program aims to bridge the digital divide and enhance educational opportunities across the country.

d. Projected Digital Economy Growth

Uruguay’s digital economy is projected to experience growth in the coming years, driven by both public and private sector initiatives. The ICT sector is one of the fastest-growing industries in Uruguay, significantly contributing to the national GDP. According to recent studies, the ICT sector’s revenue reached $2.8 billion in 2022, with exports totaling $1.8 billion, 85 percent of which is exported to the U.S. The sector employs over 22,000 individuals directly and supports a broader ecosystem that includes more than 50,000 jobs.

Key players in Uruguay’s digital economy include government entities, major tech companies, and a growing number of startups. The Uruguayan IT Chamber (CUTI) and the Uruguayan Chamber of Digital Economy (CEDU) play crucial roles in supporting this ecosystem by organizing events, fostering networking, and representing digital businesses at both national and international levels. As the sector continues to grow, Uruguay is expected to enhance its position as a digital hub in Latin America, particularly in areas such as fintech, software development, and e-commerce.

Uruguay faces competition from other Latin American countries with strong ICT sectors. However, its stable political and economic environment, advanced digital infrastructure, and proactive government policies give it a competitive edge. Uruguay is also attracting interest from global tech giants seeking a stable base in Latin America, further boosting its digital economy.

For U.S. companies, this environment presents a unique opportunity to leverage Uruguay’s advanced infrastructure, skilled workforce, and strategic location to access both regional and global markets. Uruguay serves as an ideal base for regional operations. U.S. companies should consider using Uruguay as a hub for expanding into other Latin American markets, leveraging the country’s connectivity, highly-skilled workforce, Free Trade Zones, MERCOSUR and other Free Trade Agreements, to reach a broader customer base.

Market Challenges

Regulatory Complexity

While Uruguay has made significant progress in creating a supportive regulatory environment for the digital economy, challenges remain as the legal framework for emerging technologies is still under development. Additionally, navigating Uruguay’s public sector procurement processes can be complex, particularly for companies unfamiliar with the local regulatory environment.

Market Entry

U.S. companies looking to enter the Uruguayan market, particularly those new to the region, are advised to contact the USCS office in Montevideo to receive guidance. Although the country offers a welcoming business environment, understanding local market dynamics and consumer preferences is crucial for success. Conducting market research and building local partnerships is recommended to navigate these barriers effectively. Partnerships or strategic alliances with local firms can provide valuable insights into the market and help U.S. companies tailor their offerings to meet the specific needs of Uruguayan consumers, access distribution networks, and establish a local presence.

Competition from Regional and Global Players

Uruguay’s digital economy is highly competitive, with both regional and global players vying for market share. Companies from neighboring countries and global tech giants have established a strong presence in Uruguay, creating a competitive environment. U.S. companies should strive to differentiate themselves through innovation, quality, and customer service to compete effectively.

Digital Trade Opportunities

Uruguay’s digital economy presents numerous opportunities for cross-sector enabling technologies, which are crucial for driving innovation and efficiency across industries:

Communications and Networking Technologies: There are opportunities to participate in the ongoing rollout of 5G networks and internet services in general. Uruguay recently opened its internet service market to competition and granted internet satellite companies Amazon’s Project Kuiper a Class C license and Starlink a Class B license. U.S. companies specializing in telecommunications, cloud computing, and internet services can benefit from the high-quality infrastructure to offer advanced digital services, including next-generation connectivity solutions and digital transformation services for local businesses.

The main provider of internet access, state-owned ANTEL, is open to partnerships to jointly develop 5G business services for end-users via IoT in Ag-tech, healthcare, industry, logistics, and security. ANTEL is open to partnerships with U.S. companies that provide smart home applications, including internet video surveillance systems, TV boxes, and other smart applications and devices. They are also looking to partner in smart solutions for the industry and logistics sectors. Experts expect new opportunities in automation, the use of robots, virtual and augmented reality, gaming, software, and other solutions.  

Cybersecurity: On August 14, 2024, the Uruguayan Senate passed the country’s first cybercrime law that establishes specific penalties for offenses such as online harassment, computer fraud, data breaches, identity theft, unauthorized access to digital data, damage to computer systems, and the protection of personal data. The law is an important step forward for Uruguay to join the Budapest Convention as a member state.  In addition to this law, Uruguay must comply with a series of requirements to adhere to the Budapest Convention, including international legal cooperation and institutional coordination.

Uruguay has a cybersecurity framework which is based on NIST’s CSF. The government is currently working on building their new National Cybersecurity Strategy as part of the goals of Uruguay’s Digital Agenda 2025. As digitalization increases, so does the need for robust cybersecurity solutions. There are opportunities for companies that offer cybersecurity products and services, especially for companies that provide training and software.

Artificial Intelligence (AI): The country is developing its AI National Strategy. Although specific laws have not yet been crafted, Article 16 of Uruguay’s Data Protection Law, gives individuals the right to avoid decisions made solely by automated systems (like AI) if those decisions have significant effects on them, such as in credit scoring or job applications.  

Internet of Things (IoT) and Smart Cities: Uruguay’s openness to smart city initiatives, particularly in Montevideo, creates opportunities for IoT solutions. These initiatives are focused on improving urban management, enhancing public services, and reducing environmental impact through the use of connected devices and data analytics. The growth of IoT in Uruguay is also supported by the country’s advanced telecommunications infrastructure, which provides the necessary connectivity for large-scale IoT deployments.

Digital Economy-related Trade Events

  • The Cuti Business Forum is organized by the Uruguayan Chamber of Information Technology (Cuti) and serves as a key event for the technology and business sectors in Uruguay. This forum provides a platform for local and international companies to explore business opportunities, discuss industry challenges, and share insights on digital transformation and IT services. It features panels, workshops, and networking sessions aimed at fostering growth and collaboration within the tech industry, making it a significant event for professionals looking to expand their reach and influence in the Latin American market.
     
  • The Chamber of Digital Economy of Uruguay (CEDU) organizes key events to boost online sales in the country. “CIBERLUNES” or CyberMonday is the most significant online sales event in Uruguay, held twice a year, offering exclusive deals and discounts across various sectors. Additionally, CEDU hosts “Digital Days”, a series of six themed sales events throughout the year, each focusing on a specific industry such as fashion, technology, entertainment, home, travel, and beauty. These events are designed to encourage digital commerce and enhance the online shopping experience for consumers in Uruguay.
     
  • Punta Tech is an annual technology and innovation conference held in Punta del Este, Uruguay. It brings together global leaders, entrepreneurs, investors, and tech enthusiasts to discuss the latest trends and advancements in the tech industry. The event serves as a networking hub for industry professionals, fostering collaboration and knowledge-sharing in areas such as fintech, artificial intelligence, and digital transformation. With a focus on innovation and the future of technology, Punta Tech has become one of the most prominent tech events in Latin America.
     
  • The GeneXus Meeting is an annual event organized by GeneXus, a prominent Uruguayan software development company. It attracts developers, IT professionals, and business leaders from around the world to discuss software development, digital transformation, and innovation. The event includes workshops, keynotes, and networking opportunities focused on the latest trends in low-code platforms, artificial intelligence, and enterprise solutions. This event usually takes place between September and November.

Conclusion

Uruguay’s digital economy offers significant opportunities for U.S. companies, driven by advanced infrastructure, a supportive business environment, and a skilled workforce. However, challenges such as regulatory complexity, market challenges, and competition must be carefully assessed. By leveraging local partnerships, focusing on innovation, and engaging with the USCS, U.S. companies can successfully navigate the Uruguayan market and capitalize on the opportunities presented by this dynamic and growing digital economy. Uruguay’s strategic location and commitment to digital transformation make it an attractive destination for U.S. companies looking to expand their presence in Latin America and beyond.