Luis Lacalle Pou will assume office on March 1, 2020, for a period of five years. His victory brings in a conservative government and ends the rule of the left-wing Frente Amplio coalition after 15 years in power. A much more pro-business administration should mean that doing business should become smoother over the next five years.
On January 22, the new government published a draft urgency law (Ley de Urgente Consideración) on its website. Uruguay’s Constitution allows the president to propose urgent laws, which pass automatically if not rejected or substituted after an abbreviated debate of no more than 90 days in Parliament. Among hundreds of provisions, the draft establishes certain issues relevant for agri-business and farmland investors:
- It proposes to allow land ownership to public limited companies with bearer shares. Incentive for international investment in Uruguayan farmland!
- A change in the role of the Institute of Colonization in the purchase process of farmland. It is expected that as a result 150.000 hectares currently held by the Institute will become available on private market.
- Modification of the financial inclusion law for example to eliminate the obligation for salaries and pensions to be paid electronically (not in cash).
- Import of gasoil will be facilitated which would lead to a significant reduction of expenses in Uruguayan farming.
- Stricter control and sanctioning of robbery of livestock in rural areas by enforcing rural police.
Several measures that, once adopted, would lead to an improved profitability in farming and hence an increase of land value.