The Panama of South America: Uruguay

The Panama of South America

“The honesty and realism of your information shines through. I am looking forward to continuing reading your offerings for a long time.”
— Carol C., United States

When I was just starting out covering this retire overseas beat, Jane Parker was already a seasoned pro…running tours and writing columns, articles, even a book on the subject.

In 1987, Jane was researching chapters for her Adventures Abroad title (that would be published a few years later, One of the countries she intended to feature was a place nobody else at the time had probably ever considered: Uruguay.

She planned to travel to the country for research, and, I’m still not quite certain why, she suggested to the Uruguayan Ministry of Tourism people sponsoring her trip that they invite me to go along with her.

At the time, Jane had more than a decade of international travel and retire abroad scouting experience under her belt. I was the young editor of International Living. I didn’t appreciate it fully at the time, but, today, looking back, I see what a generous gesture Jane made, arranging for me to tag along with her.

For two weeks, she and I traveled Uruguay, from Montevideo to Punta del Este, from gaucho country to charming Colonia. I spoke not a word of Spanish and had little idea, in truth, what I was doing. So I listened and I watched, as Jane asked questions to draw out the benefits and the advantages for the foreigner of living and retiring in this little country next-door to Argentina.

At the time, if an American, for example, knew Uruguay at all, that was what he knew. It was the other country at the bottom of the world alongside Argentina.

In truth, this remains largely true today. The outside world knows little and probably thinks less about the place some who do know refer to as the “Switzerland of South America.”

I met Uruguay 21 years ago. I didn’t fully appreciate Jane’s invitation to explore the country with her as my guide…and, frankly, I didn’t fully appreciate the country either.

My frame of reference then was too limited. I took for granted what Uruguay had to offer, because I didn’t understand yet that not all countries could compete.

Today, now that I’ve been around (and around) this retire overseas block, this country stands out more and more for me. I see that, in fact, few countries can compete.

Yes, in ways, Uruguay is the Switzerland of South America…but, the better I become acquainted with the place, the more I see it as the “Panama of South America.”

There’s no great building boom taking place in Montevideo, as there is in Panama City today. That’s not the point of comparison I mean to make.

Uruguay, though, offers tax and residency benefits, as Panama does. It’s one of those zero-tax jurisdictions international tax gurus have been telling you about.

It’s also one of the easiest places in the world (like Panama) to establish foreign residency…and, once you do, it is perhaps the easiest place in the world to obtain citizenship and a second passport. Easier than Panama…and, having acquired second citizenship in Uruguay, you don’t need to renounce any previous citizenships (as, technically, you must do in Panama).

Furthermore, the foreign residency-to-second citizenship process can be accomplished in as few as 12 months. As Uruguayan legal eagle Juan Federico Fischer says:

“Uruguay is one of the best offshore havens in the world right now. It imposes no currency restrictions—so money can flow in and out of the country with no withholding taxes, waiting periods, or conversion to local currency—and no restrictions on foreign ownership of property.

“You can avoid exchange risk by keeping funds in the country in foreign currency (U.S. dollars and euro are most common). In fact, more than three-quarters of the funds on deposit in Uruguayan banks are held in dollars.

“Furthermore, as a foreign resident of this country with no local income, you have no local tax liability. All foreign-sourced income and assets abroad are tax-free. You don’t even need to report their existence to the Uruguayan authorities.”

Uruguay is not only an offshore, tax, foreign residency, and second citizenship haven…it’s also a beautiful country. Even back in 1987 I was able to appreciate this much about the place. Punta del Este is one of the most impressive beach zones in the world and an international jet-setter sun-and-sand mecca.

Furthermore, back then…and still today…Uruguay is also one of the most affordable places in the world to call home. Our editors have done the sums. You could live well in this country, if you own your own home, on as little as $1,038 per month. Here’s the budget to prove it.

Kathleen Peddicord