Uruguay announces the loosening of tax residency requirements

Patrick Chambers
2 min read

In July 2020 the Uruguayan government announced that it was relaxing the requirements for foreigners who want to gain tax residency in the country. Decree 163/20 obtains the two updated main conditions for obtaining tax residency in Uruguay.

The first route is via the acquisition of a real estate investment worth more than UI3,500,00 (Uruguay’s inflation adjusted currency, worth roughly $390,000 as calculated in February 2021.) This acquisition must have taken place after 1st June 2020. In addition, the individual must be present in Uruguay for at least 60 days in each calendar year. 

 

The second route is via a direct or indirect acquisition of a company which has a value of UI 15,000,000 (roughly $1,670,000) or more. This acquisition must have been made after 1st June 2020 and must generate at least fifteen new, full-time jobs. These new jobs must also not have led to a decrease in jobs in related companies. 

 

UruguayExclusive beach at new luxury property development Las Cárcavas. Image: Business Wire



The previous regulations involved more time and more capital. In the past, an individual could be considered a tax resident in Uruguay if they remained in the country for more than 183 days in each calendar year or if the base of their economic or ‘vital’ interests (meaning their activities generated more income in Uruguay than in any other country) were in Uruguay.

 

The investment criteria were also higher: the minimum real estate acquisition value was UI15,000,000 (roughly $1,670,000) and the company acquisition value was UI45,000,000 (roughly $5,010,000.) The company’s activities had to have been declared of national interest for investment purposes. 

 

Uruguay has long been considered one of South America’s shining stars from an investment point of view. The government is not only loosening its tax residency requirements, but also working on being able to offer tax-free zones and zone ports. Expected tens of thousands of new foreign investors, new luxury property developments and continued Chinese investment mean the Uruguayan real estate market is likely to have a bright future.

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