Why This Top Retirement Haven Is Also One Of The Best Places In The World To “Go Offshore”
I came to Uruguay for the first time in 2004 on vacation. I was living in Ecuador at the time and had no interest in setting up another residence or internationalizing my life any more than it already was. The objective of the trip to Uruguay was to have a great time among great people in their unique culture.
But I was sold on the country after that first trip and decided to move there.
I recognized right away that Uruguay would be a great place to live. What I found after I’d moved there was that residency in this country had additional benefits that I hadn’t realized initially. As a resident in Uruguay, I was able to legally reduce my U.S. income tax burden to almost nothing. Uruguay’s banking system provided me with a safe alternative place to keep funds, earn interest, and diversify outside the U.S. dollar. And, now, after having been a legal resident for three years, I’m eligible for Uruguayan citizenship and a second passport.
Perhaps best of all, I’ve earned a good return as an investor in the country’s real estate market.
So what started as a vacation, turned into a model for “internationalizing” one’s life… or “going offshore,” as they say.
Uruguay has attracted expats for a long time thanks to a few core qualities that have remained unchanged.
Many who write about Latin American cultures like to bundle disorganization, the inability to keep a commitment, and lack of accountability…and label it a laid-back culture with a charming “mañana” attitude.
But in Uruguay I learned what laid-back really means. Uruguayans tend to have unlimited patience. They’re non-confrontational, non-violent, good natured, and friendly. Yet I find them also to be honest and punctual. They keep their word, conduct themselves professionally, and stand by their commitments.
It’s a country that enjoys one of the lowest crime rates in Latin America, with one of its highest standards of living. The culture is honest and hard-working, and corruption levels are the lowest in Latin America (tied with Chile).
In Uruguay you’ll enjoy fast, modern highways, reliable phone, cell, and broadband internet service, and drinkable water from every tap in the country. You’ll have free Wi-Fi in the buses and town squares and even a public radio network.
Uruguay enjoys a stable democracy, respectful of all levels of society. Many presidential administrations (including the current one) have been socialist-leaning…but this has a few practical benefits for the expat. One is that Uruguay has a more homogeneous society, without the strict two-class system you’ll see elsewhere, so you won’t experience the social unrest of many countries.
Cost Of Living
Traditionally, Uruguay has been reasonably priced for the lifestyle it offers, and it still is. But it’s not cheap.
When I first came in 2004, Uruguay qualified as a budget destination. But the fall of the U.S. dollar took care of that. When I bought pesos for the first time, I got an exchange rate of 34 pesos/USD. The official exchange rate today is 21.3 pesos/USD. That translates to a 60% increase in my local expenses. (Note that real estate in this country trades in dollars, so real estate prices are not directly affected by exchange rate fluctuations.)
I still think the lifestyle is a good deal for the money, but it’s not (currently) the bargain it once was.
Uruguay has a gentle climate, with four seasons but no ice or snow. It also boasts miles of some of the most beautiful and well-maintained beaches in South America, beaches that draw visitors from all over the world.
The culture is genteel and European, of mostly Italian descent. You’ll find tango clubs, opera houses, orchestras, and more fine dining options than you could try in a lifetime.
Aside from these “core” values, Uruguay offers some practical advantages.
The residency process in Uruguay is straightforward; although it’s not fast. Fortunately, you get your ID card on the day you turn in your application, not the day it’s approved. So you have total access to Uruguay’s benefits fairly quickly.
Income thresholds for visa qualification are low; most everyone on Social Security can qualify. And, as a resident, you can import your household effects duty-free.
After a period of between three and five years, you are eligible to become a citizen and receive that all-important second passport.
The healthcare system is excellent. You can use the free healthcare system or pay a relatively small fee to use the private system to avoid possible crowds and wait times (as well as to enjoy nicer facilities).
Doing business is easier in Uruguay than in neighboring Brazil or Argentina, according to the annual rankings by the World Bank. Yet by setting up shop in Uruguay, you can gain access to those two markets, the largest in South America. A number of incentives are available to the entrepreneur.
Uruguay’s financial services industry has been a big draw for many years. It’s fairly easy to open a bank account, and the accounts offered are flexible and useful.
Unlike many countries, you do not have to convert your funds into the local currency when sending them into Uruguay. Banking clients can hold accounts in Uruguayan pesos, U.S. dollars, euro, and Brazilian reals.
What’s even better, you can move money among these accounts by using a simple (free) transfer over the internet. I’ve done this frequently to take advantage of various dips and spikes in exchange rates.
As an offshore destination, Uruguay is hard to beat. The banking system is solid and easy to gain access to… residency is easy to obtain with fairly low income requirements… citizenship and a second passport are available… and the country goes out of its way to provide a good base for your business.
Best of all, though, this is still a great place to spend time, in pleasant surroundings, among great people.
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