Uruguay, the second best country in Latin America to start an online business

With a total score of 43.98, Uruguay is the most recommended country in Latin America to start an online business after Chile.

For some years now, the North American company Best Accounting Software has been in charge of evaluating accounting software so that small companies, freelancers and NGOs can choose, thanks to its reviews, the most suitable accounting software for their particular situation and type of business.

So it is not surprising that in this new year it has poured all that accumulated experience into an index that evaluates which are the best countries in the world to set up an online business.

The Best Countries to Set Up an Online Business evaluates 99 countries on 20 variables ranging from GDP per capita and percentage of the population using electronic means of payment, to the number of procedures required to start a business, the number of countries with the same time zone or the degree of postal development.

As the number of variables to be analyzed according to the number of countries and categories is close to 2,000, we will limit our analysis to Latin America. We will only add that the best country to open an online business is Denmark, and the worst, Haiti.

With a total score of 43.98, Uruguay is the most recommended Latin American country for starting an online business after Chile. This is influenced, as we have already seen, by all the variables related to Internet service, where the country has stood out in the region for some years now. In addition to the well-known download speed, Uruguay is the country with the highest number of broadband subscribers (29.25%, 10 points more than Argentina, the second) and it beats Chile in terms of percentage of population using the Internet (82% of Chileans versus 78% of Uruguayans) and percentage of social network users (79% and 78%, respectively).

Uruguay also has the highest percentage of population using the Internet for online shopping and bill payment in Latin America, with 31% (followed by Chile with 29%) and an acceptable level of corporate taxes at 25% (the lowest is Paraguay with 10% and the highest Brazil and Venezuela with 34%). In nominal GDP per capita Uruguay also leads with U$S 16,230 (followed by Chile and Panama) and is third in economic freedom (only surpassed by Colombia and Chile), although regarding the percentage of population with a bank account, the country is 5th in the region, after Chile, Venezuela, Brazil and Costa Rica. In digital skills it has the same score as Chile (4.26), although both are surpassed in this variable by Costa Ricans (4.89), the most digitally skilled population in Latin America.

The report also shows variables where Uruguay has room for improvement. Its Logistics Performance Index score of 2.69 leaves it in 10th place out of 15, while its postal development, measured every year by the Universal Postal Union, is 13.1, only better than that of Venezuela. In number of co-working spaces it is in tenth position with 12, the same number as the Dominican Republic, although it should be noted that Uruguay has 3.5 million inhabitants and the Dominican Republic, 11 (Mexico, the best Latin American country in this indicator, has 348 spaces).

Finally, there are three variables related to the so-called startups, which are companies with a strong technological component that require little initial investment, are founded by one or several entrepreneurs and are usually innovative (as Amazon, Facebook or MercadoLibre were at the time). The first of these variables is the number of procedures required to found a company of these characteristics, which in Uruguay is 5, the best country along with Panama (the worst is Venezuela, which requires 20 procedures). The second refers to the cost that these procedures represent in the gross national income per capita. In Uruguay, which ranks 10th, they represent 24.1%, while in Panama, which has the same number of procedures to found a startup, it is 5.8%. Finally, the third of these variables refers to the number of days required to start a business. Uruguay, with 7 days, ranks third in Latin America (in Chile it takes 4 days while in Venezuela it takes 230).

To talk about digital development in 2021 is inevitably to talk about the pandemic, which exposed (and still exposes) the strengths and weaknesses of each country to face the challenge of integrating into a world that is globalizing at a forced pace. In this scenario, e-commerce seems to be, after vaccines, one of the most effective lifelines to alleviate its negative effects, especially in economic terms. The fact that Uruguay is the second country in Latin America where it is easiest to set up an online business is undoubtedly a very positive sign for what is to come.

*Director of Nueva Mayoría Uruguay

Source: El País