I’m a big fan of living globally. At some point in my life I would love to own a second or maybe a third home (if I’m lucky) somewhere else around the world. Becoming an expatriate (or “expat”) is a great move for one to make somewhere down the road. It’s great for diversifying your wealth, embracing other cultures and enjoying life in different environments. Now I have been researching places to live for the last year or so and I am quickly gravitating toward Uruguay for many reason. One of which is for their low-tax policies for foreign residents. [Photo: Jikatu, Wikipedia]
Uruguay is one of the most economically developed countries in South America, with a high GDP per capita. The Economist ranked it 21 out of 167 countries on the 2010 Democracy Index. And according to Transparency International, Uruguay is the second-least corrupt country in Latin America, a shade behind Chile…
Becoming a legal resident of Uruguay is relatively simple. And after Uruguay grants you permanent resident status, you keep your status as long as you do not live outside of the country for more than three years.
As a resident of Uruguay, your tax burden is negligible. Residence for tax purposes is defined as anyone with 180 days or more of physical presence in the country in any given tax year, which is the same as the calendar year.
Credit is given for any tax paid to a foreign jurisdiction, whether or not Uruguay has a double-tax treaty in force with that country.
Interest on deposits and dividends that Uruguayan citizens earn abroad are taxed, but foreign residents living in Uruguay are not required to pay those taxes. The law specifically states that foreigners who relocate to Uruguay pay no extra taxes.
Taxes are levied on assets. Citizens (not foreign residents) pay a small tax on offshore deposits, securities, and loans. The rate is 0.07% to 0.5%. This tax, known as “IP,” is being phased out in annual steps and will end in 2017. It will not affect anyone obtaining citizenship after 2017.
Salary, capital gains on sale of shares or property, pensions, lease income, or any other type of offshore income are all untaxed…
– Robert Bauman, International Living
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