LIVE AND WORK IN URUGUAY
Uruguay is one of the most reliable countries in the region, offering a robust value proposition about market access, FDI track record, testing ground for innovation, outstanding talent and a remarkable lifestyle.
Uruguay offers very interesting opportunities to those who desire to live and invest in this country, (i.e., quick obtaining of residency and work opportunities), intalling a regional hub and obtaining tax benefits.
Firstly, it is worth pointing out that in a very short time it is possible to obtain the necessary documents to start any activity.
Uruguay offers foreign citizens the possibility to obtain the provisional identity card in 20 business days, thus obtaining same working rights of a national citizenship. This proceeding can be even started from the Uruguayan consular offices abroad, and if the foreign citizen is hired by a Uruguayan company the "Fast Track System" can be applied, thus obtaining the temporary residency in only eight days.
After three years of having obtaining the legal residency, the citizenship can be requested. For that purpose, it is necessary to prove non-criminal records, sufficient income and settlement in the country. Once foreign citizens obtain their citizenship, they may obtain the Uruguayan passport.
Furthermore, Uruguay, as member of Mercosur, offers access to a market of more than 300 million persons, having the benefit of its strategic location, stability and respect for government institutions. Our country has applied a special legal framework for the transfer of goods and services between Argentina and Brazil, combining the benefits of enclaves such as Shared Services Centers (SSC), free zones, free port and airport to become a Regional Hub.
Shared Services Centers - they are more than 50 and many activities are carried out within them, such as: foreign trade, logistics, customer services, marketing, sales, accounting, clearing, financial solutions, payroll, centralization of stock, etc., which are essential for regional and international companies. Each center must have at least 150 new employees and up to 25% of them may be foreigners. During the first five years, those activities are exempted from 90% of the Corporate Income Tax (IRAE), as well as from Net Worth Tax.
Free port and airport- Aiming to optimize regional logistics, Uruguay offers the opportunity to use port or airports as "free" transit, transfer, loading and unloading, consolidation or deconsolidation of goods, being able to remain for an undetermined term until their next destination without paying taxes or duties and keeping the origin of their products.
Free zones - Since our first Free Zone Act dated in 1949, five subsequent laws on this subject were enacted. The legal framework in force today allows the investor to carry out any type of industrial, commercial or services activities without any restrictions, and benefiting from a complete tax exemption, including already existing taxes and future taxes (this exemption does not include special social security contributions).
Foreigners will benefit from a tax residency in Uruguay once they stay more than 183 days during a civil year, provided that their economic activity is based on our country.
Our country has entered into agreements to avoid double taxation with many countries, which is very important to make a decision where to invest in abroad.
Uruguayan Tax Authorities (DGI) issues an Annual Certificate of Tax Residency upon request of the interested party to be submitted in their country of origin in order to recover tax credits.
Once physical persons obtain their tax residency, they may choose to be levied by IRNR tax (Non Residents Income Tax) during the first five years of staying; thus, they are benefited from tax rates ranging from 3% to 12%. Further, in Uruguay, the principle of territoriality is still in force to levy income, which allows tax residents to keep their business abroad without increasing their local tax base.
Broad guarantees, clear game rules and a wide range of privileges make Uruguay an increasing attraction for foreigners.
Emilio Tuneu Mohr
Founding Partner Baker Tilly Uruguay