Uruguay launches a new version of the tax residence permit program
On July 1, 2020, a new version of the tax residence permit program in Uruguay will be launched. This statement was made by the country's President Luis Alberto Lacalle Pou. To participate in it, a foreigner will need to fulfill two conditions: stay in the country for at least 60 days annually, and also purchase real estate in the amount of $377 thousand or invest $1,6 million in a local business. In return, they are guaranteed complete exemption from income and property taxes for ten years.
As it was
In January, when taking office as president, Lacalle Pou noted that attracting 100 to 200 thousand tax residents willing to invest in the Uruguay economy or choose it for permanent residence would bring great benefits to the country. However, the immigration scheme that existed at that time was not suitable for this: it was not competitive enough and did not live up to the hopes placed on it.
According to the old rules, to obtain tax residency in Uruguay, it was necessary to purchase real estate here for $1,8 million or invest $5,4 million in a local business, and also be in the country for at least 183 days a year. For comparison: to become a tax resident Antigua and Barbuda, you need to buy or even rent real estate, pay an annual tax of $20 thousand and spend at least 30 days on the islands annually. Obviously, with the presence of cheaper and more profitable programs on the market, the Uruguayan tax scheme existed only formally.
What's new
The redesigned scheme looks much more interesting than its predecessor. Under the new conditions, the threshold amount of investment in real estate has decreased by almost five times, and investment in business has decreased by more than three times. In addition, there is another way to obtain a tax residence permit by opening a business with the creation of 15 jobs for citizens of the country.
Hello neighbors
Despite the fact that de jure any foreigner can obtain Uruguayan residency, it is obvious that de facto the Uruguayan proposal concerns wealthy citizens of its closest neighbors, and primarily Argentina. Its president, Alberto Fernandez, has been extremely wary of Lacalle Pou's initiative to reform the program, warning his colleague against creating the conditions for Uruguay to become a haven for tax evaders.
However, experts believe Elma Global company, the introduction of new rules arrived just in time. Recently, Fernandez, solving the economic problems that beset Argentina, signed a decree introducing a one-time tax levy on the wealthiest residents of the country, the implementation of which will replenish the treasury by $4 billion. The document will affect the interests of approximately 11 thousand Argentines, whose assets exceed $2,9 million On average, each of them will have to pay approximately $364 thousand.
It is curious that the size of the one-time tax fee is only slightly less than the amount of the minimum investment in Uruguayan real estate, by investing in which you can get a residence permit and tax exemption for the next ten years.
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