Uruguay: A Favorite for Investment, Residency, & Citizenship
Uruguay, a small South American country of European heritage, has been known for decades as a beacon of stability and safety. And, in recent times, it has been increasingly attracting Americans and Europeans seeking new alternatives for safe investments, residency, and citizenship.
What makes Uruguay stand out?
For starters, it is the country with the highest GDP per capita in Latin America; it has a broad middle-class, modern infrastructure, and solid institutions. Foreign and local investors receive equal treatment, private property is strongly respected, and there are no restrictions on the movement of capital in and out of the country.
Transparency International has consistently rated Uruguay as the least corrupt country in Latin America throughout the years. The Economist Intelligence Unit rates Uruguay as the most democratic country in the continent. The World Justice Project rates the country at the top of the list in terms of rule of law.
Uruguay’s advantages can be summarized by:
- A solid and predictable legal system.
- Political and economic stability.
- Social stability, thanks to the existence of a middle class, relatively low levels of poverty, and the lowest ratio of income disparity in Latin America.
- Low rates of corruption.
- An open economy, with free flow of capital (inward and outward) and free convertibility of currency.
- Equal treatment for local and foreign investors, guaranteed by law.
- A solid banking system.
- Generous tax incentives to investment projects, large and small.
- A dozen free trade zones, from which hundreds of global companies operate with offshore customers, tax-free.
So, what does Uruguay offer? Among the many attractions that the country has, this article will focus on those benefits that most expats seek:
- An easy residency, citizenship, and second passport program.
- Farmland investments.
- Real estate, either as an investment or a residence.
Easy Residency, Citizenship, and Second Passport
Uruguay has a stated policy of welcoming foreign nationals who wish to live in the country. There is no immigration quota, nor does Uruguay´s immigration authority discretionally reject applications. It is not required that the applicant invest in the country, either. As long as the applicant meets some simple requirements, permanent resident status is always granted.
The documents that are required are: the applicant’s birth certificate, a clean police record (which, for U.S. citizens, can be requested in Uruguay itself, at the local Interpol office), and proof of some source of income to support oneself.
The moment the application is turned in, the candidate is granted Temporary Legal Resident status and receives a Uruguayan identity document. The file then travels through a series of verification steps and, usually within six to eight months, Permanent Legal Resident status is obtained.
Uruguay allows dual and triple citizenship, and the country’s passport is a very reputable one. So, if after residency, one also wishes to obtain Uruguayan citizenship (and a second passport), the applicant needs to wait three years (if married), or five years (if single). This period starts to run from the moment one first arrived in Uruguay to file for residency, and the person needs to spend six months out of each of those 3 or 5 years in the country to obtain citizenship.
The formal requirements to obtain citizenship are simple: two witnesses who can attest to the applicant’s connection to the country and documents that show activity in the country (such as visits to a doctor or a dentist, payment of social security taxes on an employee, a work contract or ownership of a business).
Farmland investing in Uruguay is one of the most attractive global investment options for the medium and long term. This is due to several factors:
- The fact that Uruguay is one of the most suitable places in the world for farming, cattle breeding, and forestry developments. This is thanks to the country’s climate, non-degraded soil, and water availability.
- Uruguay’s record on protecting foreign investment, its solid legal system, and its stability.
- The ease for a non-farmer to invest in farmland, given the country’s widespread technical expertise, infrastructure, and farm management available.
- The transparency of the market. Every property’s soil types and productivity rating is available online. This allows for a straightforward verification of a property’s potential and the ability to compare it with others.
Uruguay offers three main options for farmland investors:
Row crops, especially soybeans and wheat, and to a lesser extent corn, barley, and sorghum are the main crops being planted in Uruguay’s agricultural heartland. The country’s soil quality, climate, and infrastructure have placed it as a global player, and today the country is the 6th-largest global exporter of soybeans, 5th in dairy products, and 4th in rice.
Uruguay breeds mainly Hereford and Angus cattle, 90% of it on natural pastures, and the use of antibiotics and growth hormones is prohibited. It is the only country in the world with 100% traceability of its cattle herd, from birth to slaughter. The country has a high sanitary status, which grants it access to the top global markets (Uruguay’s beef exports, which account for 5% of global sales, reach over 150 countries).
Uruguay has the world’s fastest rate of growth of eucalyptus for paper pulp. The industry was jump-started by a promotion law passed 25 years ago, and since then it has grown exponentially. In recent years, Finland’s UPM and Sweden’s Stora Enso installed the world’s two largest and cleanest pulp mills in western Uruguay. Stora Enso will open a third one in 2018, and with it, Uruguay will become the second global exporter of short-fiber pulp. In addition, the country enjoys the highest sustainability FSC certification in the world: over 80% of its forests are certified.
Investing in farmland is simple, and thanks to the widespread technical expertise available, it’s an easy turnkey investment to have.
Foreign buyers of real estate are attracted by the diversity of options Uruguay offers, whether one is buying a full-time home or one to enjoy for part of the year.
Montevideo, the country’s capital and most populous city, offers pleasant coastline neighborhoods and colonial architecture with pedestrian streets in the Old City. Condos, single homes, and large estates are available within short distance.
Punta del Este, a seaside city 90 miles east of Montevideo is a favorite with foreign buyers. South America’s premier beach destination, also known as the Riviera of the south, Punta del Este offers unparalleled beauty and taste on a large stretch of diverse white sand beaches. Sailing, golf, polo, and fine dining are widespread. The lifestyle option that Punta del Este offers is ideal for buyers of all ages, whether they are moving permanently or spending a season in Uruguay.
Colonia, a 17th-century World Heritage town 120 miles west of Montevideo, comes in third among favorites with expats. It’s a small-scale town on a wide river, with cobblestone streets lined by cafes and restaurants and abundant colonial architecture.
Lifestyle farms complete the list of most popular real estate options. They abound around the cities of Colonia and Montevideo and especially in the hills just north of Punta del Este. Usually 10 to 20 acres in size, they offer the farm lifestyle with the convenience of a modern home and proximity to a main city.
Juan Federico Fischer is the managing partner of Fischer & Schickendantz (www.fs.com.uy), a leading law firm in Uruguay. Both an attorney and a U.S.-educated M.B.A. (Kellogg Business School), Juan manages the firm’s Foreign Investment Advice Unit.
Juan and his firm are a reference for foreign investors in Uruguay, and he is regularly interviewed by The Financial Times, The Wall Street Journal, the New York Times, and the BBC on investing trends in the country. The firm’s website lists press articles, clients, and presentations on investing in the country.
Fischer & Schickendantz also has a specialized Farmland Investment Advisory Unit (www.uruguayfarms.com), dedicated to assisting investors in Uruguay’s thriving farmland sector: agriculture, forestry, livestock, and meat processing activities. In addition, the firm has the country’s largest Residency and Immigration practice, providing a comprehensive service to individuals relocating to Uruguay, including residency application assistance and property conveyance.