Charlas Location is a series of live interviews that we carry out in our Instagram account Every Friday at 17pm.
On June 3rd we held an exclusive interview with lawyer Verónica Raffo, a graduate in American and International Law and specialized in Management. Partner at Ferrere Abogados and CPA Ferrere and Ferrere in Uruguay, Bolivia, Paraguay and Ecuador. A leader in entrepreneurship and gender issues.
These were the main points of the interview:
What is the current investment situation?
“The current situation is interesting, because there is a lot of liquidity in the world, there is money. And making safe investments, such as bonds, is an investment that today gives you a negative rate. So there is an interest or a feeling that investing in real issues, such as real estate development, becomes very attractive and interesting. And here you have interesting tax benefits for large-scale projects, which were benefits that existed but there was a relaxation in recent times because the new government understands that we need investment. Now you have very interesting benefits, such as 8 or 10 years of exemption from assets, depending on where they are. And you also have a percentage of income tax that is very interesting.”
“Then you have the issue of social housing. What is sought there is dynamism, not only from developers, but also from those who buy because they have tax benefits for 10 years. So there you have another interesting business. There were regimes that existed but there have been adjustments during these months that are interesting to take into account, in a world where money has a tendency to want to be invested in this way.”
How are investments developing in Uruguay?
“In Uruguay, over the last three years, we have had the same investment rate, there has been no increase, it is more or less 3% of GDP. And it is the same as in 16, we need much more investment. When I talk about investment, I am referring to the general investment, Uruguayan and foreign. So there is a regime that favors investment, which has become quite sophisticated, a project must be presented to COMAP, which analyzes various dimensions: one was the generation of quality employment, the issue of clean technologies, innovation, environmental impact. And this is a quite sophisticated regime and very appropriate for a country that has so much investment that it can afford to choose the best. It is likely and it would seem reasonable to me that this new government will review this regime, because there is a relevant dimension which is the generation of employment. Surely it will privilege that dimension when analyzing the projects.”
“Today everything is very stagnant, there are no big transactions. I think that one of the things that is most sustainable are real estate investments or projects. In general, they are projects where the business plan is more linear and easier to analyze. But otherwise, traditionally in Uruguay there is everything, meat packing plants were bought, a lot of investment in agriculture, there was a lot of Argentine investment. Then there are investments that have to do above all with technological issues, we have an interesting software industry and there are companies from the region, large technology companies that come to put important developments here. For example, Mercado Libre, which has a large investment in the country, and it is very interesting because it is a cutting-edge company. The truth is that it is super variable and broad, which is good, that there is a fairly broad panorama.”
What are the recommendations when facing an investment?
“What is really important is that they get advice, because from the very beginning you have to know the rules you are going to play by. Because if not, we often see that they come, start walking a path and then only then become aware of some things that were not done and that delays the procedures and makes them more complex. So the truth is that good prior planning is necessary to understand the business, the sector, the applicable rules and the dynamics of how things work here. There is an induction that is legal and business-related, and another that is also cultural in the sense of how things work. The truth is that this prior planning always bears fruit later.”
What is the situation of SMEs and self-employed workers?
“What this pandemic revealed to us is the enormous fragility and weakness of the small business world. And I'm talking about really small businesses, the sole proprietorship, the self-employed. The reality is that sometimes we talked about "they're not illegal" or "they're already formalized," but the level of precariousness was remarkable. And what this pandemic made us realize is that we're hit hard and our whole world is falling apart. I think there are things to be done, and I think it could also be part of what will be seen in the upcoming review of social security. Because it's deficient, due to all the problems we're already aware of. I think this is an important element to keep in mind: recognizing this world of small entrepreneurs and self-employed workers and what a more considerate system for their situations could be.”
<h4¿Cuál es la posición de las mujeres en el mundo empresarial?
“I was president of the Organization of Businesswomen of Uruguay for many years, I work closely with all the projects they have in Uruguay and projects at a more global level on this topic. Why did I become convinced and start to see this? Because the truth is that for many years I was not aware, I did not adequately consider how women were underrepresented in the economy and in the private sector. I work mainly in the private sector, although with UN Women I have participated in issues that are more in the public sector, when you talk about the issues of femicide, teenage pregnancy, which are other dynamics. But clearly there is an underrepresentation, if you look at the numbers, the gap in economic terms is still very large, it is approximately 30%, which means occupying leadership positions in companies and a wage gap. Why do we want to change this reality? What we want is the diversity of having men and women together leading organizations, it has been shown that the results of companies are better when their directors are mixed.”
“I worked a lot with female entrepreneurs, and the reality is that the female entrepreneurship rate was much lower than the male rate. In recent years, thanks to the work of many organizations, that has been changing. Many organizations have put a lot of effort, heart, and money into encouraging more women to become entrepreneurs. Why does that matter to us? Because it directly impacts the GDP; you'll have a country that will generate more money because you have more people starting businesses and more people working. I think we need to get rid of the "you're back here bothering us" mentality that sometimes happens with the March 8th marches. We need to get rid of that connotation, and ultimately, we need to think about whether my country, my society, my community, and my company benefit from having more women working side by side with men, because you'll have a diverse team that will perform better.”
What are the most important challenges facing Uruguay today?
“One of the huge challenges, which was clear for the new government, is to have as many trade agreements as we can. With all the countries we can, with reasonable conditions. I have a lot of confidence in the current Foreign Ministry to negotiate these treaties. That should be our strategy, to be as open as possible to the world, with all the free trade agreements we can. And those that are between blocks, so be it. We are negotiating with the European Union, we have to try to close that. Today the EU, with all this blow that has happened, we will see how anxiously they will be thinking about closing agreements with other countries again or how much they will close themselves to the internal Europe, we do not know yet. But ultimately that is going to be the great challenge, Uruguay opening up as much as possible. On the agenda of Uruguay as a country this has to be at the top of its interests, because sometimes we do not realize how important that is, to start having the greatest commercial openness possible. I think that is going to be the way and that this government is very clear about it.”
