The Benefits of Becoming Fiscal Resident in Uruguay

Living in Uruguay can be a rewarding experience that offers a variety of benefits. One of these benefits is becoming a tax resident in the country. This offers a number of benefits, including tax advantages, access to certain government programs and services, and the potential for greater stability for international investors. Read on to learn more about the benefits of becoming a tax resident in Uruguay and what you need to do to make the switch.

Central square of the plaza independencia in downtown montevideo
Central square of the Plaza Independencia in downtown Montevideo

Tax Exemption on Foreign Income

Foreigners who reside in Uruguay for a certain number of days per year or who carry out a significant economic activity in the country may obtain tax residency. Among the benefits of such residency are tax exemptions; a 10-year period applies to income from investments abroad. After 10 years, individuals can pay 12% and receive a tax credit for taxes already paid abroad. Thereafter, foreign individuals may continue to benefit from advantages that extend beyond this period. These benefits apply to interest paid by banks and debtors abroad, as well as to distributions from non-Uruguayan companies.

On June 11, 2020, a decree was signed that provides two additional options for determining basic economic interests in Uruguay. Individuals who own investments in the country may now be considered to have fundamental economic interests in Uruguay if they have one of the following options:

  1. Real estate in Uruguay valued at more than approximately USD$1.65 million if acquired before July 1, 2020.
  2. Real estate acquired after July 1 with a value of more than USD$380,000 and a stay of 60 days in the country.
  3. Business activities valued at more than approximately USD$5 million, if such activities have been declared eligible under the Uruguayan Investment Promotion Scheme.
  4. Business activities valued at $1.65 million commenced after July 1, 2020.

Our team at Team Haverkate is ready to provide you with our professional contacts to ensure a successful tax exemption application in Uruguay. They will assist you with the necessary advice to make a sound application.

Stable Real Estate Market with Good Returns on Investments

Uruguay’s real estate market is known for its affordability, low taxes and high-quality real estate, making it a good choice for foreign investors.One of the factors that make Uruguay’s real estate market attractive is its stability. The country has a strong and stable economy, a reliable legal system and a relative low crime rate, all of which contribute to the stability of the real estate market. The government has also implemented policies that encourage the growth of the real estate sector, such as tax incentives for investors.

Becoming a tax resident in Uruguay offers many great advantages for those who want to save taxes. Although the country is small, the government is friendly to expatriates and the people are hospitable. Becoming a fiscal resident in Uruguay can give you more financial freedom and a better lifestyle at the same time.

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