URUGUAY COUNTRY MONOGRAPH
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URUGUAY COUNTRY MONOGRAPH
Published by Live and Invest Overseas Dr. Alberto Navarro Street, El Cangrejo, Panama City, Republic of Panama
Publisher: Kathleen Peddicord
Copyright © 2017 Live and Invest Overseas. All rights reserved. No part of this report may be reproduced by any means without the express written consent of the publisher. The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. www.liveandinvestoverseas.com
Uruguay[ Escriba Country texto Monograph ]
T A B L E O F C O N T E N T S Government ...... 1 Economy and resources ...... 2 Climate ...... 3 Montevideo climatological data ...... 4 Population and society ...... 4 Infrastructure ...... 5 Practical information...... 5 Special benefits for retirees ...... 6 Cost of living ...... 6 Cost of housing ...... 9 Health care ...... 9 Taxes ...... 10 Territoriality and residence ...... 10 Gross income ...... 10 Deductions and allowances ...... 10 Tax credits ...... 11 Other taxes ...... 11 Tax authorities ...... 11 Further Reading ...... 11 Recommended Resources ...... 12
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Uruguay[ Escriba Country texto Monograph ]
National name: República Oriental del Uruguay (Eastern Republic of Uruguay)
Area: 176,200 square kilometers (68,030 square miles)
Capital: Montevideo
Major towns and cities: Salto, Paysandú, Las Piedras, Rivera, Tacuarembó
Physical features: grassy plains (pampas) and low hills; rivers Negro, Uruguay, Río de la Plata
Government
Head of state and government: Tabaré Vázquez (assumes office March 1, 2015)
Political system: liberal democracy
Political executive: limited presidency
Administrative divisions: 19 departments
Political parties: Broad Front (Frente Amplio)—formerly known as the Progressive Encounter/Broad Front Coalition or EP-FA (a broad governing coalition that includes Movement of the Popular Participation, New Space Party, Progressive Alliance, Socialist Party, Communist Party, Uruguayan Assembly, and Vertiente Artiguista); Colorado Party (Foro Batllista); National Party or Blanco
Armed forces: 25,439 (2012)
Conscription: military service is voluntary
Death penalty: abolished in 1907
Defence expenditure (% GDP): 1.1 (2008)
Education expenditure (% GDP): 4.5 (2008)
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Economy and resources
Currency: Uruguayan peso
GDP: US$59.201 billion (2014)
Real GDP growth: 4.4% (2012)
GDP per capita (PPP): US$17,391 (2014)
Consumer price inflation: 8.6% (2013)
Unemployment: 6% (2013)
Public debt: 57.2% of GDP (2012)
Major trading partners: Brazil, Argentina, United States., China,
Resources: small-scale extraction of building materials, industrial minerals, semiprecious stones; gold deposits are being developed
Industries: food processing, textiles and clothing, beverages, cement, chemicals, light engineering and transport equipment, leather products
Exports: textiles, meat (chiefly beef), live animals and by-products (mainly hides and leather products), rice, food and beverages, mineral products. Principal market: Brazil 18.5% (2012)
Imports: machinery and appliances, transport equipment, chemical products, petroleum and petroleum products, agricultural products. Principal source: China 16.1% (2012)
Arable land: 7.7%
Agricultural products: rice, sugar cane, sugar beet, wheat, potatoes, barley, maize, sorghum; livestock rearing (sheep and cattle) is traditionally country's major economic activity
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Climate
Located entirely within the temperate zone, Uruguay has a climate that is fairly uniform nationwide. Seasonal variations are pronounced, but extremes in temperature are rare. As would be expected by its abundance of water, high humidity and fog are common. The absence of mountains, which act as weather barriers, makes all locations vulnerable to high winds and rapid changes in weather as fronts or storms sweep across the country.
Seasons are fairly well defined, and, in most of Uruguay, spring is usually damp, cool, and windy; summers are warm; autumns are mild; and winters are chilly and uncomfortably damp. Northwestern Uruguay, however, is farther from large bodies of water and therefore has warmer summers and milder and drier winters than the rest of the country. Average highs and lows in summer (January) in Montevideo are 28°C (82.4°F) and 17°C (62.6°F), respectively, with an absolute maximum of 43°C (109.4°F). Comparable numbers for Artigas in the northwest are 33°C (91.4°F) and 18°C (64.4°F), with the highest temperature ever recorded being 42°C (107.6°F). Winter (July) average highs and lows in Montevideo are 14°C (57.2°F) and 6°C (42.8°F), respectively, although the high humidity makes the temperatures feel colder, and the lowest temperature ever registered in Montevideo is -4°C (24.8°F). Averages in July of a high of 18°C (64.4°F) and a low of 7°C (44.6°F) in Artigas confirm the milder winters in northwestern Uruguay, but even here temperatures have dropped to a subfreezing -4°C (24.8°F).
Rainfall is fairly evenly distributed throughout the year, and annual amounts increase from southeast to northwest. Montevideo averages 950 millimeters annually, and Artigas receives 1,235 millimeters in an average year. As in most temperate climates, rainfall results from the passage of cold fronts in winter, falling in overcast drizzly spells, and summer thunderstorms are frequent.
High winds are a disagreeable characteristic of the weather, particularly during the winter and spring, and wind shifts are sudden and pronounced. A winter warm spell can be abruptly broken by a strong pampero, a chilly and occasionally violent wind blowing north from the Argentine pampas. Summer winds off the ocean, however, have the salutary effect of tempering warm daytime temperatures.
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Montevideo climatological data
Population and society
Population: 3,324,460 (2013) Population growth rate: 0.24% (2011) Urban population (% of total) 92% (2010) Age distribution (% of total population): ages 0–14: 22.5%, 15–64: 63.7%, 65+ 13.8% (2010) Ethnic groups: predominantly of European descent (88%); 8% mestizos, 4% black Languages: Spanish (official), Brazilero (a mixture of Spanish and Portuguese) Religion: mainly Roman Catholic Education (compulsory years): 14 Literacy rate: 97% (men); 98% (women) (2003) Labor force: 13% agriculture, 14% industry, 73% services (2010) Life expectancy: 73 (men); 79 (women) (2010) Child mortality rate (under 1, per 1,000 live births): 9.69 (2010) Internet users: 1.4 million (2009)
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Infrastructure
Airports: 58 (2010)
Railways total length: 1,641 kilometers
Roads total road network: 77,732 kilometers, of which 7,743 kilometers paved
Inter-city travel is via bus, taxi, car service (remise), car, and motorcycle. Speed limits are posted on highways and some main roads. Most taxis have no seatbelts in the back seat. Cycling outside the capital or small towns is hazardous due to a scarcity of bike paths, narrow road shoulders, and unsafe driving practices.
Illumination, pavement markings, and road surfaces are sometimes poor. Route 1, which runs between Montevideo and Colonia or Punta del Este, and Route 2, between Rosario and Fray Bentos, are particularly accident-ridden because of heavy tourist traffic. Road accidents rise during the austral summer beach season (December to March), Carnaval (mid-to-late February), and Easter Week.
Practical information
Visa requirements: visa not required for Americans
Embassy in the U.S.: 1913 I (Eye) Street, NW Washington DC 20006; tel. (202) 3311313
American embassy: Lauro Muller 1776, Montevideo; tel. (598) 2-1770-2000
Chamber of commerce: Cámara Nacional de Comercio, Rincon 454 P.2, C.P. 11000 Montevideo; tel. (598) 2-916-1277
Office hours: 9 a.m.-6 p.m. Mon–Fri
Banking hours: 1 p.m.-5 p.m. Mon–Fri
Time difference: GMT -3
Chief tourist attractions sandy beaches; forests; tropical swamps on the coast; variety of flora and fauna
Major holidays: 1 January, 19 April, 1, 18 May, 19 June, 18 July, 25 August, 12 October, 2 November, 25 December; variable: Carnival (2 days), Good Friday, Holy Thursday, Mon–Wed of Holy Week
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Special benefits for retirees
Unlike for most countries, you initiate the process for foreign residency in Uruguay after you‘ve arrived in the country, rather than at an overseas consulate. This makes things much easier for you. You can come to Uruguay as a tourist and decide to stay. To qualify for foreign residency, you‘ll need to show an income of at least US$500 per month from outside Uruguay. As a foreign resident, you‘ll be able to import your household goods duty-free.
Some immigration consultants will tell you that they can get your car into Uruguay, and, in fact, the residency laws on the books say that you can do it. But the president has decreed that you can‘t, and there are no exceptions. In practice, it‘s simply not possible.
Cost of living
If you are retiring to Uruguay on a budget, the ideal location will depend on whether you're looking for a seaside or a city lifestyle. Let's take a look at the seashore first.
Our pick on the coast for budget living is Atlántida. A small town with a permanent population of just over 3,500, Atlántida swells to over 19,000 when the summertime visitors arrive. Its shady, tree-lined streets and large, older homes have the feel of a year-round home town, rather than that of a vacation resort. It's possible to live in Atlántida without a car. But it won't be as convenient as being "carless" in the big city. If you can afford the extra US$300 per month, do it. If not, you'll get by with public transit.
If city living is more your style, we'd recommend Salto. Located about 300 miles upriver from Montevideo, Salto is like a mini version of the capital city. Just about every major store that has a branch in Montevideo has one in Salto as well. What Salto doesn't have is Montevideo's crime, property prices, or tax rates. You'll notice a markedly lower cost of living.
In either Atlántida or Salto, we'd allow for a two-person budget of US$1,555 per month if you are renting instead of buying. If you need household help, plan on spending an additional US$250 per month for a live-in maid.
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Renter's Budget in Atlantida or Salto
Rent US$600
HOA Fees US$0
Property Taxes US$83
Car Costs US$0 Salto, no. Atlantida, maybe...
Auto Insurance US$0
Transportation US$60
Gas US$50 Used for heating and cooking
Electricity US$100
Telephone US$15
Internet US$35
Cable TV US$25
Household Help, fulltime US$0 Allow US$250 if a full-time maid is required
Food US$355
Entertainment US$320
If you are in a house, I'd suggest insurance, Homeowner's Insurance US$0 about US$67 monthly
TOTAL US$1,643
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Apartment Ownership
Rent US$0
HOA Fees US$0
Property Taxes US$83
An unnecessary burden in the city, but consider Car Costs US$0 it in Atlantida
Auto Insurance US$0
Transportation US$60
Gas US$50 Used for heating and cooking
Electricity US$100
Telephone US$15
Internet US$35
Cable TV US$25
Household Help, fulltime US$0 Allow US$250 if a full-time maid is required
Food US$355
Entertainment US$320
If you are in a house, I'd suggest insurance, Homeowner's Insurance US$0 about US$67 monthly
TOTAL US$1,043
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Uruguay[ Escriba Country texto Monograph ]
Cost of housing
There are plenty of small beach towns along Uruguay’s coast, but La Barra is special. It is a small, walkable‖ town, yet it offers all the luxuries, services, comforts, and conveniences you could want. Furthermore, La Barra is clean, well-maintained, and safe. And, like all Uruguay, it enjoys First World infrastructure with good public facilities, drinkable water, and well-maintained beaches.
You could purchase a three-bedroom house in La Barra for as little as US$100,000. Organizing a yearlong rental, on the other hand, isn’t nearly as straightforward a proposition because owners don’t want to give up the extremely high rents they can charge for the months of January and February (as much as US$5,000 or US$10,000 per month). With an annual lease, you’ll be asked to pay rent to take into account the inflated rates that can be commanded during this two-month period. As you see, the rental market distortion here creates a remarkable opportunity for owners.
Health care
Everyone in Uruguay is entitled to good health care. For many, this means using the free public health care system, available to natives and foreign residents alike. From La Barra, the nearest free clinic is in Maldonado, about 20 minutes away. However, the paid system is such a good deal (especially when compared with costs in the United States) that most foreigners opt for private facilities. Going this route, La Barra is served by an efficient, modern (but small) clinic called Policlínica La Barra which is fine for general illnesses, prescriptions, or routine doctor visits. If you need surgery, however, you’ll likely head for one of its affiliated hospitals in Punta del Este or San Carlos— both about 15 minutes away.
An in-country insurance package can be a bargain deal, even if you‘re in Uruguay only part of the year. The least-expensive plan starts at just US$49 per month with La Asistencial, a network that operates 11 facilities in the area. With this basic plan, you‘d be in a semiprivate room if you‘re hospitalized, and inpatient drugs would be covered. The co-payment for doctor visits ranges from US$3.50 for a doctor visit to US$13 for a visit to the emergency room. You‘d be responsible for 75% of the cost of outpatient drugs.
At the other end of the scale is the US$129-per-month program, which entitles you to a private room, VIP treatment both in the hospital and at the doctor‘s office, ambulance service, and medicines at a flat co-payment of US$5. Both plans cover you for emergency service while traveling outside Uruguay. Note that the quotes we are quoting are the highest published rates available for those over 55 years old. If you‘re younger, your premiums should cost less. There is no minimum term; you could join for just part of the year if that suits you better.
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Uruguay[ Escriba Country texto Monograph ]
Taxes
Territoriality and residence
The Finance Minister announced on April 7, 2011, that Uruguay is now implementing a rule that establishes that those foreigners who move to Uruguay, and, importantly, those who have moved to Uruguay already, will face no taxes on any type of income generated abroad, at least for the first five years of residency.
In sum, this means (summarizing the complete set of rules):
Foreigners who come to reside to Uruguay or who already reside in Uruguay will be liable for no taxes on their foreign income for five years.
After that, certain types of income, specifically dividends and interest, will be taxed at 12%.
However, if the person already pays tax on those types of income elsewhere, Uruguay will not tax it. The foreign resident will never face double taxation in this jurisdiction.
It is likely that these measures that now have been adopted will be extended from the current five years to a more permanent non-taxed status for foreigners who move to Uruguay.
Gross Income
Employee gross income Income earned inside Uruguay is taxed at progressive rates ranging from 0% to 30%.
Capital gains and investment income Capital gains are taxed at a flat rate of 12%.
Deductions and Allowances
Contributions to Social Security and a small fixed amount per minor child are allowed as deductions.
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Tax Credits
Not provided.
Other Taxes
Social security taxes: Employed and self-employed individuals are required to pay Social Security Contributions (CESS) based on their salary.
Real property tax: The municipal authorities levy a tax on real estate. The real value‖ (determined by the municipal government) of real estate is subject to a tax upon transfer at a rate of 4% (2% each for the buyer and seller).
Net wealth tax: A net worth tax is imposed on residents and nonresidents on the difference between assets and certain liabilities as at 31 December each year.
Tax Authorities
Direccion General Impositiva
Further Reading
Access a full report on La Barra here or find out more on Uruguay by accessing the Country Page on our website.
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Recommended Resources
Our top resource in Uruguay is attorney Juan Fischer, who is experienced helping foreign retirees and investors open bank accounts, establish residency, and manage the real estate purchase process.
Juan Federico Fischer Attorney At Law LVM Abogados & Consultores Email: [email protected]
For real estate opportunities contact Reynolds Properties.
Uruguay is one of the countries covered in our next Retire Overseas conference. Get in touch with the best specialists in investment, medical insurance, living and retiring overseas, real estate, etc. during this event. Details here.
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Further Live and Invest Overseas Resources
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Overseas Living Letter
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Health insurance is a top priority for anyone considering a move overseas. Within the pages of this two-manual kit, learn the difference between local insurance and international policies.
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Global Property Investor's Marketwatch
As founder of International Living's Global Real Estate Investor, Lief led his readers to a number of remarkably profitable investments in markets from Croatia to Mexico...from Argentina to the coast of Spain...from Romania to Honduras... Now he shares his unique and extensive experience with members of his Global Property Investor's Marketwatch. Before you take off for your new life in Paradise overseas, let us show you...
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