The government of President Lacalle Pou is cutting real estate investment requirement by a hooping 77% from 1st July. The degree will soon make Uruguay therefore even more welcoming to wealthy foreigners looking for a new home following a presidential decree that makes it cheaper to obtain tax residency in the South American country.
Starting in July, foreigners who live at least 60 days a year in Uruguay and buy real estate valued above 3.5 million inflation-linked UI — currently equivalent to US$380,000 — will qualify for tax residency. Newcomers can also obtain residency by investing more than 15 million UI (US$ 3.2 mil) in a business that creates at least 15 full-time jobs. The decree will help Uruguay compete with countries such as Portugal, Spain and Italy that are also angling for rich foreigners, he said.“It’s basically targeted towards families wanting to live and invest here.
President Luis Lacalle Pou, who took office March 1, is seeking foreign investment to help revive an economy the World Bank sees contracting 3.7% this year. Uruguay’s selling points include relative stability and a low crime rate. Still, growth was lackluster even before the local coronavirus outbreak, with GDP expanding just 1.3% a year on average since 2015 amid a drop in commodity prices and business expenditures.
The UI, or Unidad Indexada, is an accounting unit created in Uruguay in 2002 during a period of high inflation that is adjusted daily to the Uruguayan peso. The UI is currently worth 4.6414 pesos. While Lacalle Pou’s decree lowers the financial and physical presence barriers to residency, Uruguay’s border, airports and ports remain shut to passenger traffic in efforts to prevent the coronavirus from spreading.