In Uruguay, it is possible for foreigners to obtain fiscal residency when they live a certain number of days per year in the country OR when they have vital economic activities in the country.
The advantage of fiscal residency is a ´tax holiday´ and who wouldn’t wish to enjoy this. For a period of ten years you don´t have to pay tax on foreign-sourced investment income. This is the case for interest paid by foreign banks, interest paid by foreign borrowers, and dividends from non-Uruguayan companies. After the 10 year period a person pays 12% with a fiscal credit over tax amounts already paid abroad. After the 10 year period a foreigner still enjoys a number of benefits.
A decree signed on June 11, 2020 added two new possibilities.
An individual is now considered to have his “main economic interests” in Uruguay when he owns the following investments in Uruguay:
- Real estate properties in Uruguay with a value exceeding approximately US$1.65 million when purchased before July 1, 2020.
- Real estate purchased after July 1, with a value over 380.000 USD and stay of 60 days
- Business activities valued at more than approximately US$5.0 million, provided that such activities have been declared “promoted” under Uruguay’s investment promotion regime.
- Business activities valued 1.65 M USD initiated after July 1, 2020.
Such tax exemption can be obtained after making an application with professional help at the fiscal authorities in Uruguay. Upon request we can put you in contact with the right professional advisors. Bloomberg recently had a publication about this.
Update: On August 12 Uruguayan Parliament extended the tax holiday from 5 to 10 years.
For example: buying this farmhouse in Colonia, you would qualify for fiscal residency.