About Uruguay Citizenship and Residency

Uruguay offers Legal Residency and Tax Residency, Uruguay has a stated policy of welcoming foreign nationals who wish to live in the country. There is no immigration quota, and it is not required that the applicant invests in the country. As long as the applicant meets some simple requirements permanent legal resident status is always granted. In addition, Uruguay has a favorable tax residency system: new tax residents have a ten-year tax holiday, and afterward are only taxed on two types of overseas income, dividends, and interest, at 12%. And to avoid double-taxation, Uruguay credits any tax paid anywhere on that income.

Uruguay Advantages

• A solid and predictable legal system.
• Political and economic stability.
• Social stability, relatively low levels of poverty, and the lowest ratio of income disparity in Latin America.
• Low rates of corruption.
• An open economy, with free flow of capital (inward and outward) and free convertibility of currency.
• Equal treatment to local and foreign investors, guaranteed by law.
• A solid banking system.
• Generous tax incentives to investment projects, large and small.
• A dozen free trade zones, from which hundreds of global companies operate with offshore customers, tax-free.
• An open policy towards new permanent residents.
• An attractive tax residency system.

Tax Residency in Uruguay

Uruguay has historically granted local and foreign investors equal treatment and has implemented generous tax incentive schemes for companies investing in the country. It has an open immigration policy, and the country favors the relocation of individuals and companies to Uruguay through various policies. At the personal level, Uruguay has an attractive Tax Residency system, it approved new paths to obtain tax resident status. Plus, it extended the tax holiday period granted to new tax residents to ten years.

The Different Paths to Obtain Tax Resident Status

The two new paths to tax residency approved are the following:

1. Making a Real Estate Investment of USD$ 390,000 or more, plus spending at least 60 days in the country during the calendar year.
2. Making an Investment-directly or indirectly-in any company of at least USD$ 1,680,000, plus generating 15 new jobs.

The preexisting alternative paths to tax residency remain in place, they are:

• Spending at least 183 days in Uruguay during the calendar year (given the way that short-term absences are accounted for, one can meet the requirement by spending 140 to 150 days in the country).
• Making a real estate investment of USD$ 1,680,000 or more, without the need to spend time in the country.
• Making an investment-directly or indirectly-in any company, of at least USD$ 5,000,000 as long as the company’s investments have been declared of ‘national interest’ under an Investment Promotion Law which grants tax breaks to new investments (Act 16,906).
• Generating higher income in Uruguay than in any other country (the comparison is made vis-a-vis other countries where the person generates income). To qualify, the income generated in Uruguay cannot be a passive capital investment (real estate which generates rental income).
• When the person’s ‘vital interests are located in Uruguay.

There are a few important elements to consider when applying for Tax Residency in Uruguay:

• All eligible tax residents must adhere to the Uruguayan tax regime.
• The real estate investment criteria apply unless the taxpayer proves his tax residency in another country.
• International agreements are taken into account to avoid double taxation.
• The full-time employment generated must be ”new” and does not imply a decrease in jobs in related companies.
• Obtaining exclusively pure capital income, even when all assets are located in the Republic, does not qualify a person for tax residency.
• Income generated must correspond to activities carried out in Uruguay.

Remember:

• If a person obtained tax residency before 2020, the tax holiday period covers six years (5+1). That is, the new extended benefit of eleven years (10+1) does not apply. The alternative 7% rate option does not apply to old tax residents either.
• Tax residency is a status that must be proven every year. Each year, the person must prove that he/she meets one of the seven requirements to obtain tax resident status. One may switch the requirement met, from one year to the next one.
• The tax resident certificate issued by Uruguay’s tax authority is proof of tax resident status. It is issued yearly.
• Tax residency and legal residency (permanent or temporary) are separate and unrelated concepts. A person may be a tax resident, but not a legal resident, and vice versa.
• The amounts mentioned in the investment options to become a tax resident are on a per person basis.

To qualify for tax residence in Uruguay, a person must meet one of the following requirements:

• Day Test: The person stays more than 183 days in Uruguay in a given year. These days must be consecutive, minus the exception of two ”temporary absences”. Temporary absence count as a 21-day absence within 30 days and can occur twice within the year. Once a person fulfills the day’s test, they can request a Tac Certificate, which would allow them to leave the country.
• Family Ties: If the center of a person’s activities or vital interests is located in Uruguay, they can become a tax resident even if they don’t fulfill the day’s test. For instance, if a person’s spouse and children live in Uruguay and attend school there, that person can be eligible for tax residence.
• Equity: For a person to become a tax resident by having main economic interests in Uruguay, they must invest in Uruguay, must invest in real estate or an enterprise, and stay in Uruguay for at least 60 days per year. The minimum amount accepted for a real estate investment is $390,000. The minimum amount for an enterprise is $1.7 million, so as long as that company also creates 15 jobs throughout the year.

Permanent Legal Residency in Uruguay

Uruguay has a straightforward Legal Resident program. There is no immigration quota, and it is not required that the applicant invests in the country. As long as the applicant meets some simple requirements permanent legal resident status is always granted. The permanent legal resident application is filed before the Immigration Authority, and the required documents are:

• Birth Certificate
• Marriage Certificate
• Police Record
• Proof of Income
• Medical Check-up

Temporary Residency and Work Permits

Besides Permanent Legal Residency, Uruguay offers Temporary Residency and simple Work Permits, an option usually chosen by employees moving into the country to work for a company’s branch in the country for a limited period, or a specific short-term project. The requirements for temporary residency are simpler than those for permanent residency:

• Birth Certificate
• Police Record
• Proof of Income/Work Contract
• Medical check-up

Benefits of Uruguay Residency by Investment Program

Benefits of obtaining Uruguayan Tax Residency

• During the first eleven years of tax resident status (the year in which the person obtained the status, plus an additional ten), Uruguay grants a tax holiday, and no foreign income is taxed.
• From the twelfth year onwards, Uruguay will tax only two types of foreign income, interest, and dividends, at a 12% rate. And to avoid double taxation, the country automatically credits any taxes paid overseas over those dividends and interest.
• Any other type of foreign income (lease income or capital gains, for example) is not taxed in Uruguay.
• Alternatively, a person may choose to waive the tax holiday period, and instead, pay a 7% rate (over dividends and interest) during an unlimited period.
• Uruguay country does not levy any asset or property tax on foreign assets.

Uruguay Residency Requirements And Qualifications

The requirements and qualifications required to obtain Uruguay residency or citizenship are listed above in the “About Uruguay Citizenship and Residency” section.

Stappen en tijdlijn

Stap 1: Whatever type of visa to Uruguay you are interested in, the first step is to look up the corresponding consular offices closest to your home.

Stap 2: Make an appointment to apply at the consulate since this country does not have an electronic pass available at this moment in time. The consular authorities will inform us, by telephone or e-mail, what kind of forms we have to fill in and what requirements we must meet.

On many occasions, these forms can be found on the web page of the consular offices, where they can be downloaded to print out, and in some cases, they can even be filled in online.

Stap 3: Fill in all the forms and attach the required documentation.

Stap 4: You must go in person to the consular offices to make the formal application for your visa to Uruguay. In certain circumstances, when a person is not able to appear at the consular offices in person to make their application, some consulates allow for the required information to be sent by mail for review.

You will usually receive a response about the outcome of your application from the consular authorities in about 20 days.

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Privacy World can also help you with incorporating your company in Uruguay, assisting in getting you settled in the country, and coordinating with you so that this experience will be less of a hassle.

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