Become A Resident—It’s Easy
Uruguay is one of the two most appealing places in the world to establish foreign residency (the other is Panama).
As a resident of Uruguay, you enjoy all kinds of benefits. Uruguay is one of those zero-tax jurisdictions international tax gurus have been telling you about…plus, after five years of legal residency (three, if you’re married, or as few as 12 or 18 months if you’re a resident retiree…see below), you can apply for Uruguayan citizenship and acquire a Uruguayan passport.
Uruguay attorney and investment and tax advisor Juan Federico Fischer explains:
“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.
“Personal income tax was introduced in Uruguay last year, but this change in the tax code has no affect on you as long as you earn no money locally. In other words, as a foreign resident of this country with no local income, you have no local tax liability. Only income generated in Uruguay is taxable in Uruguay. Foreign-sourced income and assets abroad (a U.S. pension, for example, dividends or capital gains earned by stock in a Japanese company, interest from a CD in a European bank, rental income in Australia…) are tax-free. You don’t even need to report their existence to the Uruguayan authorities.
“Furthermore, Uruguay is one of the easiest places in the world today to establish foreign residency…and, that accomplished, one of the easiest places in the world, as well, to obtain a second passport.
“Here’s what you need to apply for foreign resident status in this country: your birth certificate (stamped by the Uruguayan consulate in your country of birth), a clean police record, and proof that you can support yourself.
“You fulfill the clean police record requirement simply by presenting a certificate from the police in your country of origin and any other country where you have resided during the past five years. If you’re a U.S. citizen, you can request your U.S. police certificate in Uruguay, at the local Interpol office.
“You fulfill the income requirement by proving that you have annual income of at least US$6,000–from a pension, a mutual fund, lease income from assets inside or outside Uruguay, dividends of any kind, earned income, etc.
“This is the requirement Uruguay immigration authorities pay most attention to, and this is the point about which there could be some back and forth if you don’t get the proper advice, as you work to prove the authenticity and permanent or semi-permanent nature of each income source (done through a Uruguayan notary/lawyer’s certification).
“Uruguay does not require that you own property or have investments in the country to establish residency. At the same time, owning property does not eliminate the income requirement.
“Once you’ve got your documents together, you enter Uruguay as a tourist, then you file your paperwork from within the country on a pre-arranged date at the immigration authority. As soon as you’ve made your application, you’re ok to stay in the country indefinitely, while your file is being reviewed and processed. You can even request a national identification card, which allows passport-less travel to Argentina, Brazil, Chile, and Paraguay.
“You’re also permitted, from day one of your application, to import your household goods (not including a car) into the country duty-free. There could be some small risk in this, I guess. If your application for residency were denied, you’d have to export all your things when you leave the country…
“The chances that your residency application will be denied are small, though. Again, the process is straightforward. As long as you can meet the income requirement, and don’t have a criminal record, you will never have a problem.
“Then, five years after you’ve filed for residency, you’re eligible to apply for citizenship. You do this at Uruguay’s Electoral Court, where you must show, with the help of documents and witnesses, that you have made a permanent connection with the country and that you have not been absent from Uruguay for more than six straight months during your five years of residency. The citizenship process is remarkably quick. Typically, citizenship is granted within three months of your request.
“Uruguay allows for multiple citizenships, so you don’t need to give up any other nationality when you become Uruguayan. The key benefit of Uruguayan citizenship, of course, is the Uruguayan passport, which allows for visa-free travel throughout all Latin America and part of Europe.
“Furthermore, if you’re a resident retiree, you can get your passport in 12 to 18 months. The requirements, though, to be a resident retiree are greater than those for a regular resident. Your income must be from a recognized pension, and it must be at least US$18,000 per year. And you must own property in the country with a value of at least US$100,000.
“As a resident retiree, you are allowed to bring your car into the country with you duty-free, in addition to your other belongings. I don’t recommend this, though, as the associated bureaucratic delays make the process expensive.”
P.P.S. Does Uruguay make sense for you as an overseas retirement haven? I don’t know. You’ve got to make the determination for yourself.
Here’s what you need to know to think through the idea:
In fact, you can’t (and shouldn’t) choose Uruguay…or Panama…or Mexico…or Nicaragua…or Italy…or Thailand…
You could, however, determine that Granada, Nicaragua, is the ideal place for you to enjoy your retirement years…or that you’re more at home and happy in Abruzzo, Italy, than anywhere else you’ve ever spent time.
You’ve got to slice a place very thin to get a clear understanding of the opportunities for living, retiring, and investing it offers. Maybe you can’t stand the heat in Panama City. So get out of the city…and head for the mountains…to El Valle, maybe, or Boquete. Maybe you’re turned off by the high-profile gringo community in Chapala, Mexico. Avoid it…by looking instead to Oaxaca.
Where should you consider in Uruguay? Our correspondent Christian MacDonald has lived himself in this country and traveled it from end to end. He’s identified one town, in particular, that he says offers one of the best options in the world for sophisticated seaside retirement. He reports in full (where, why, and how) in the first issue of our new Overseas Retirement Letter.
Continue Reading: Time To Start A New Life Overseas In 2020