Uruguay

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See how Uruguay compares to another country using any of the measures in the Index.

Rule of LawView Methodology

Uruguay recognizes and enforces secured interests in property and contracts. Expropriation is unlikely. The judiciary is transparent and independent, but the courts function slowly and are subject to intimidation. Transparency International ranked Uruguay the least corrupt Latin American country in its 2019 Corruption Perceptions Index. The government has prosecuted some high-level officials from the executive, parliamentary, and judicial branches for corruption in recent years.

Government SizeView Methodology

The top individual income tax rate is 36 percent, and the top corporate tax rate is 25 percent. Other taxes include value-added and capital gains taxes. The overall tax burden equals 28.6 percent of total domestic income. Government spending has amounted to 33.2 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.6 percent of GDP. Public debt is equivalent to 67.4 percent of GDP.

Regulatory EfficiencyView Methodology

The cost of starting a business has increased, and business freedom has declined for a fifth straight year. The maximum number of days per week that an employee can work has been reduced. The government has eliminated some price controls but still sets prices for electricity, fuels, rents, interdepartmental transport, medicines, natural gas, pasteurized milk, taxi fares, tolls, and water.

Open MarketsView Methodology

Uruguay has eight preferential trade agreements in force. The trade-weighted average tariff rate is 9.6 percent, and 53 nontariff measures are in effect. The economy is relatively open to foreign investment, but major investment reforms have been absent. About 70 percent of adult Uruguayans have formal banking accounts. In 2020, reserve requirements were reduced to maintain the appropriate level of liquidity in the banking system.