Uruguay tax residency — get a ten year tax holiday

Can I get Uruguay residency by investment?

Tax residency and legal residency are two distinct legal concepts often confused. Tax residency is concerned with your fiscal obligations to the country. It determines where a person pays taxes and can offer financial benefits, such as reduced tax rates or exemptions on foreign income.

On the other hand, legal residency refers to the right to live in a country, typically granted through a visa or permit. It does not inherently affect one’s tax status but can lead to other privileges like citizenship eligibility and the ability to import personal belongings duty-free.

Tax residency does not provide you with the right to reside in Uruguay. And therefore you cannot get legal Uruguay residency by investment.

Requirements for Uruguay tax residency

Uruguay’s tax residency program is open to individuals worldwide, primarily those with substantial assets or income. There are no strict benchmarks, but it typically appeals to high net worth individuals.

To become a tax resident in Uruguay, you must meet one of these six criteria:

1. Stay Duration: Spend over 183 days within a calendar year in Uruguay. This period can include abscences not exceeding 30 consecutive days.
2. Family Connections: If your immediate family (spouse and children) are based in Uruguay, you may qualify for tax residency without meeting the stay duration requirement.
3. Investment with stay: Invest at least $390,000 in Uruguayan real estate or $1.7 million in a local business, creating at least 15 full-time jobs, and stay for a minimum of 60 days per year. These amounts may vary slightly as they’re adjusted for inflation.
4. Investment without stay: Invest at least $1.7 million in real estate or operate a company valued at least $4.9 million with activities or projects declared of national interest for no minimum stay requirements.
5. Income: Make Uruguay your base of operations. If you receive the greater part of your income in Uruguay, you can obtain tax residency by presenting any accounting or notarial document acknowledging this.
6. Relocation: If you start living in Uruguay and show that your vital interests and family interests are based in Uruguay. You can provide medical coverage registrations, sports club memberships, your childrens’ school reports, or a work contract as proof that you are effectively living in Uruguay.

Benefits of Uruguay tax residency

There are significant tax advantages for individuals and investors. Uruguay’s tax residency program is a great fit for individuals seeking fiscal efficiency in a stable and welcoming country.

The program offers a tax holiday for up to eleven years—the first year is when you do the paperwork to become a tax resident, and then ten years where you are not required to pay taxes on any foreign income, including dividends and interest. Uruguay’s taxation system is source-based so it does not tax foreign-source income and assets located abroad.

After the holiday period, a modest 12% tax applies only to foreign dividends and interest—, pretty low compared to global standards.

If you move to Uruguay and have a portfolio with a bank overseas or lease income from properties outside of Uruguay, the taxable income is only that of dividends and interest. Uruguay historically does not tax lease income and capital gains overseas. So for ten years, Uruguay is not going to tax your dividends nor interest.