Worries of extreme left power grab cause “growing” interest of Peruvians to settle in Uruguay

RIO DE JANEIRO, BRAZIL – In recent months, executives of companies operating in Peru, investors, individuals, and wealthy families from that country have been interested in locating some of their businesses in Uruguay, buying real estate. Some have even decided to relocate, waiting for the borders to open to move forward in their legal residency process personally.

The political uncertainty in Peru, where there was a recent change of government, made Uruguay a possible destination country, and this interest increased in June and July.

Businesses and families look for new locations amid uncertainty over Castillo’s new government. Uruguay is increasingly becoming a Safe Haven not only for Argentines but also Peruvians.

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However, the phenomenon is not comparable in scale to that of Argentines last year due to the fiscal measures and foreign exchange restrictions imposed by the leftist Alberto Fernández government.

The interest of Peruvian business people and families is channeled through some Uruguayan consulting firms, executives, and official bodies.

Among entrepreneurs and investors, inquiries are not directed to mining or retail, but to the relocation of activities that can be easily carried out from abroad, such as the management of some business areas of service companies, financial investments in real estate, investment funds, software, forestry or trade in goods to supply the region.

A “growing stream of inquiries” from Peru, Diego Tognazzolo, tax, legal, and accounting partner at PwC Uruguay, told Búsqueda newspaper. He said interest began in March and April and deepened as Peru’s elections approached with authoritarian rightwing Keiko Fujimori and far-leftwing Pedro Castillo as the only two candidates. The latter took office in July.

THE PERFECT COCKTAIL

Tognazzolo said that while there was no single reason, stakeholders cited the most important factor was the “uncertainty” about the measures President Castillo and his Marxist-Leninist Peru Libre party might take to restrict the movement of capital and the activities of companies and individuals.

However, no specific announcements have yet been made. “This is the perfect cocktail,  the uncertainty of Peru and the stability of Uruguay,” he said. He added that companies and individuals are thinking about “asset protection” because they consider it “imminent” that the new Peruvian government could adopt confiscatory measures, forced conversions, or restrictive measures on the free operation of businesses or private activities, in general, some areas of activity.

The consultant said that Uruguay, as a destination, has maintained its “gradient” of “legal, political and economic stability,” which is “highly appreciated” abroad. Going into detail, it mentions that Uruguay is an “open country that has agreements to avoid double taxation and treats domestic and foreign investments equally,” he said.

He acknowledges that Uruguay maintains its investment credentials, among other issues ranging from quality of life and safety to dealing with the Covid 19 epidemic and vaccination results. “In some cases, they specifically mention the person of President Luis Lacalle Pou,” he said.

According to Tognazzolo, “many anticipate what could happen (in Peru) and prefer not to take the risk of staying,” because often those who “go first” escape measures that could affect their activities.