Why Uruguay?

What does this little country on the Río de la Plata have to offer? Can you live there? Is it worthwhile investing there?

Those are question we hear quite often. So, why Uruguay?

It’s impossible to give one general answer, and finally the personal and decisive one might be found easier only by those who experience the country on the spot. Still, here we’d like to try to transmit some of the advantages of this sunny and welcoming place.

Straßenbild in Colonia
Street scene in Colonia
Teatro Solís in Montevideo
Solís Theatre in Montevideo

Economic and political stability

Uruguay is by far the most stable Latin American country. Of course it had its economic and political crisis, but that was relatively long ago and has been overcome thoroughly.

Politically, the country is not only the most stable one in Latin America but also one of the most reliable and operative countries in the world. For decades Uruguay figures among the top 20 states of the global democracy index.

Uruguay has lived the last heavy economic crisis in 2001 and 2002. Much more than today, Uruguay depended on its huge neighbor Argentina, an absolutely different country regarding economy and politics. After the lights had gone out again in Argentina causing the states bankruptcy in 2001, the Argentinian investments in Uruguay froze, tourism was scarce, and for Uruguay began the hardest times since the end of the military dictatorship in 1985.

Since this economic crisis Uruguay shows an average annual growth of 4% and a continuously positive development. Even the year of the pandemic, 2020, passed without mayor economic harm.

Everywhere and for everybody, the multiple structural improvements contributed to the countries present resilience against external shocks. Something like 2001/2 is not going to happen again so easily – proof is the global economic and financial crisis from 2008. While other economies struggled, Uruguay had growth rates of more than 7%.

Of course life didn’t become less expensive with this positive development – Uruguay is no longer a low cost country. Inflation sank considerably during the last years, but it is still a little high, 4% at the moment. But although the association is obvious, it is not primarily the cost of living that sees to Uruguays slow but steady recapture of its popular title “Switzerland of South America”.

Invest in Uruguay – is it a tax paradise?

Punta del Este im Winter
Punta del Este in winter
Playa Mansa in Punta del Este in der Hauptsaison
Playa Mansa in Punta del Este during high season

The positive development of the last twenty years, the good perspectives for the future and last but not least its secluded geopolitical situation which is by no means a disadvantage in view of the many global trouble spots, all this makes Uruguay an interesting destination for investments.

One of the national priorities is to raise the level of investments and to further improve the economic competitiveness, above all regarding its productive capacity and infrastructure, already visible in ample tax concessions for investments and attractive regulations for free trade areas.

For Uruguay it is important to keep its good reputation in the international world of finance, bearing in mind that in 2009 it had been on the so called black list of worldwide tax havens, even if it was only for a few days. Neither a tax haven nor necessarily tax paradise, but for sure a low tax country.

Uruguayan laws for confidentiality in banking are strict, and just like in Switzerland the tax system is very advantageous for immigrated foreign investors.

The tax system is based on the principle of territory, i.e. only profits or incomes generated in the country itself are taxable.

For somebody living in Uruguay (minimum stay per year 183 days) this means that only certain incomes generated in the exterior are obliged to notify. Pensions, social security payments, rents and capital incomes don’t have to be notified.

Who makes an investment higher than 530.000 US$, e.g. in real estate, merely needs to stay in the country for 60 days per year what enables him or her to register the tax domicile in Uruguay. In this case, investment incomes outside Uruguay are income tax free for 10 years. After this time 12% are going to be charged. Alternatively, it is possible to opt for an indefinite direct tax of 7%. Uruguay signed a double tax agreement with most of the OECD countries which makes it possible to reduce tax payments considerably. Investments of more than 2.3 million US$ don’t require the investors stay in the country at all and still enjoy the tax benefits.

For Uruguay-based companies the principle of territory is also interesting because it is the only South American country offering legally tax exempted off-shore companies for international business. In Uruguay, the regular off-shore construct is the so called „Sociedad Anónima“, similar to the English offshore-trust. Besides the manageable annual fee, a „Sociedad Anónima“ doesn’t pay any taxes on off-shore incomes and assets.

Moderate immigration terms

On the whole world there are only few countries with such uncomplicated immigration requirements as Uruguay.

In general, the personal identification documents (passport, birth certificate and marriage certificate), a spotless certificate of criminal record, and a legally certified document about the regular income or assets that would enable the candidate to live in Uruguay without relying on public expenses.

(Further information about the terms of immigration can be found in the FAQ-section)

Generally, there are the following visa:

1. A tourist visa for travelers and tourists. Valid for ninety days and several entrances in the country. For EU and US-citizens a valid passport is sufficient for this visa.

2. The temporary residence permit (residencia temporaria) which is normally available for the first two years after the authorities positive decision. It includes a Uruguayan ID-card, the so called „cédula“.

3. The final residence permit (residencia definitiva), normally and ultimately available after the temporary permits expiration, though often awarded earlier.

4. A work visa, for foreigners who work in the country up to 180 days. (Can be extended for 180 more.)

In den Bergen von Minas
The Minas mountain range
Blick auf die Halbinsel von Punta del Este
View of the peninsula of Punta del Este

Individual liberty

Some notice at once when they first come to Uruguay, others need some time: In Uruguay everything is pretty relaxed. „Live and let live“ are no empty words here but perceptible in society as well as in state institutions – or just not, because most of the time the state leaves you in peace and quiet.

Of course there are rules, certain controls and sometimes sanctions, nothing extraordinary, but they are modest and not very disturbing.

There is one exception, though: The speed traps and radar units that have been popping up like mushrooms all over the country! Careful there.

Besides this little inconvenience, the Uruguayan authorities normally don’t bother much if you behave normally, and should they have to react, they’ll prove friendly and human. There is no need to panic – a good example are the years of the pandemic. Uruguay passed them a lot easier and, in consequence, probably also healthier than both of its big neighbors, for example.

There is a lot that binds people here – often it’s the soccer club, but first of all comes family, the home town and „la Patria“, their (mother) country. Don’t look for anachronistic phrases, those are lived and loved values. Nevertheless, everybody lives his/her own way of life. Personal liberty is sacred to all Uruguayans alike, freedom for all! No one thinks it’s bombastic to say „Libertad o con gloria morir“, „Liberty or a glorious death“, as goes the national anthem. (By the way, for us it’s one of the most beautiful anthems of the world, and definitely the longest!) Those who had the opportunity to be present when for whatever reason the anthem was being played, would rise to their feet and feel that the anthem is not just a song everybody knows by heart, but that the words have meaning, too, for everybody.

You can not only feel free in Uruguay, for example when strolling alone along the endless beaches or driving through the vast countryside, the scarcely populated hinterland. No, you can also see it. Go for a walk in the residential areas of Punta del Este or the other beach resorts and you will see that no house is like the other, everybody builds according to his or her own dreams and ideas. Building regulations are moderate and hardly ever restrict the architectural creativity.


Uruguay leads the latinamerican security ranking. Uruguayans are a friendly people and offer help when needed, and travelers, men or women, are always welcome and can feel safe.

Who searches the internet for „safety in Uruguay“ will, that goes without saying, find comments and news that put in doubt if Uruguay is really a safe country, and of course there have been safer times, too, but in which country there haven’t? If you ask the Uruguayans, they quickly complain about the lack of security, especially in Montevideo. Yet one has to bear in mind that they are a nostalgic people and generally haven’t widely traveled, so as to easily compare current situations with those twenty or thirty years ago, when it was safe to leave the doors open and let the children play in the street, but maybe they don’t see their situation in an international context for comparison.

Of course it is necessary to distinguish between Montevideo plus the surrounding areas in the neighboring region of Canelones, and the huge rest of the country. The capital and its surroundings together have 1.6 million inhabitants, this is nearly half the Uruguayan population. Like many other big cities, Montevideo has poorer and problematic suburbs (barrios), mostly in the northwest, with drug dealing and drug related crimes, where it’s dangerous even at daylight.

In nearly all the central and coastal regions of the capital there are hardly any problems, most of the time. Stick to the common security rules, for Uruguay is a commonly safe place. We’ve been living in this country for nearly 20 years and never ever did anything bad happen to us when we visited Montevideo, even at night.

Naturally, crime can be everywhere, in the beach resorts and coastal region, too. Especially the summer months are prone to see some burglary, that’s why many houses have security grilles at their windows and doors. In most of the cases occasional burglars try to make a quick haul, while aggravated robbery or planned assaults are absolutely unusual. Resuming: With normal security measures like automatic alarm system and exterior lights you are generally on the safe side.

Along the coast on the streets, in parks or in the open countryside you can feel safe, even at night, and this is one of the reasons why visitors from Buenos Aires or Brazil always return to the peaceful beaches between Piriápolis and José Ignacio.

One is even relatively safe from natural catastrophes in Uruguay. There are no volcanoes, no earthquakes worth mentioning and no hurricanes, although we do have some heavy storms from time to time. The only reason why Uruguay doesn’t lead the respective rankings of countries with zero catastrophes is not due to the storms, but to its many watercourses. After heavy rainfalls along the Río Negro, the Río Uruguay and other rivers, the adjoining land tends to get flooded and people have to be evacuated from their homes, sometimes only simple settlements. Extreme weather like prolonged rainfalls or the contrary, long periods of drought, is unusual, but it may occur.

Speaking from our experience: During our nearly 20 years in Uruguay, there have been three or four longer periods of rain, a drought for months two times and heavy storms also three or four times.

Frühling in den Dünen
Dunes springtime
Möwen an der Laguna Garzón
Seagulls in the Laguna Garzón

Uruguay-Natural: healthy natural resources

Uruguayans sometimes call their country a „house with garden“, where the house obviously is Montevideo – so a house with a really huge garden! In direct numbers: Montevideo plus periphery has a surface of some 280km2, and the big rest, the so called „interior“, 175.935km2. This means a 280m2-house with a garden of 17.5 hectare.

Uruguays density of population is 19 inhabitants per km², with 6.000 per km2 in Montevideo. If you imagine the total area without the capital and the few mayor towns of the interior and more populated coastal areas, you get an idea of the countries spacious emptiness. In the countryside, an average of 5 to 10 people at most lives on one square kilometer. All the rest is nature!

The biggest part of the interiors total area consists of slightly ondulated grassland with a lot of small woods and dense natural vegetation, trees and bushes, along the uncountable watercourses. Vast native forests are comparatively scarce. Most of the wooded areas are eucalyptus plantations.

There is not much industry in Uruguay – the country depends mostly on agriculture and tourism – and outside the capital even the traffic is light. In short: The air is clean, water from wells and spring water needn’t be purified before drinking, at least in the interior, and if the sky is blue it’s just blue and nothing else!

A good and working infrastructure

The national roads and other important secondary roads are nearly all asphalt, and really in very good condition compared to other South American countries.

West of the capital, Road number 1 along the coast and the so called „Interbalnearia“ which connects the resorts between Montevideo and Punta del Este, have both motorway-like infrastructure. Since the last years the improvement of other important connecting roads has been a continuous task. The signposting is very good. Of course there are many smaller non-asphalt streets without any signposts between the roads, and if you don’t know the area you’ll easily loose your way without a navigation device or an app.

Buses are used for the public and long-distance transport, exclusively, one might say. Several daily lines connect Montevideo with all mayor towns which are likewise interconnected. Compared to expenses for a private vehicle, the prices in public transport are really attractive.

The medical service is one of the best in Latin America and needn’t hide behind the European countries. Doctors and nurses are qualified and trained without exception, and the different hospitals are normally well equipped, although not always to the latest state of the art. The relation inhabitant-doctor is 200 to 1 in Uruguay, another positive international comparison, but the more distant from the capital and the coast you are, the fewer the doctors. The public hospitals are free and provide medical services and treatment to all groups of the population.

Also the education system is one of the best in Latin America. 9 years is the compulsory school attendance for children, the literacy rate is as high as 98%, and all public schools are free. No matter how scarcely populated the countryside, public schools can be found everywhere. Furthermore, in Montevideo and Punta del Este there are many excellent private schools and colleges, generally bilingual.

Uruguay offers a seamless mobile network. Access to the internet is possible nearly everywhere – more than 90% of the population uses the internet. For the last ten years Uruguay has been further developing its mobile infrastructure and connectivity focusing on transfer speed which is pretty high even today. None of the other South American countries has conditions as good as Uruguay for the IT-sector which is a thriving economic branch.

Nicht Borkum und nicht Amrum: Leuchtturm am Cabo Polonio
The beacon of Cabo Polonio
Typische uruguayische Landschaft
Typical landscape in Uruguay

Uruguay has European culture

Uruguay is said to be the most European country in Latin America. The big majority of the population is of European and mostly Italian and Spanish descendancy what strongly influenced the traditions, ideas and culture. Each family can tell its own migration story, that’s why newcomers are no sensation and welcome instead, making it easy to settle in Uruguay.

The first time in Uruguay won’t come as a cultural shock to no European, that’s for sure. Actually, everything reminds of the European south, even the landscape. Or if you spot a light tower behind the dunes and see the many houses with thatched roofs at the coast, then maybe only the warmer temperatures and the palm trees will remind you that you are in South America and not at the German North Sea.

„Acá no pasa nada“, „Nothing happens here“ the Uruguayans sometimes claim when they talk of their home country. Although the developments of the last years proof them wrong, there is a pinch of truth in it. Clocks run slower in Uruguay, something not too bad in times when global news and incidents seem to happen just one after the other. Many worldwide problems not only seem to be far away, they actually are. Uruguay is a hospitable country with a pleasant climate – and not solely from a meteorological point of view.

Who is looking for a European country outside of Europe will surely feel happy in Uruguay and, if he or she wants to, find a true new home.

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