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Investment advantages in Uruguay

Who can purchase property in Uruguay?

  • No restrictions or impediments for foreign buyers:
    • Anyone can purchase property in Uruguay.
    • Equal treatments for resident and non-resident buyers, who can invest freely with secure land registry titles, regardless of nationality.
    • No limitations to ownership of property by foreigners.

How can property be purchased in Uruguay?

  • Flexible system:
    • Individual(s)
    • Local Company: Uruguayan Limited Company (Sociedad Anonima).
    • Foreign Company: Delaware LLC, Panama Corp. (Sociedad Panameña), BVI etc.

What types of properties can be purchased in Uruguay?

  • No restrictions on all types of properties:
    • Beachfront properties: houses, chalets and apartments
    • Rural properties: small farms, vineyards, orchards, and ranches (‘Chacras'), land and forestry.
    • Urban properties: luxury apartments, houses.


Investment Advantages

  • Freely exchangeable currency
    • No currency exchange controls.
    • Easy to open a bank account and no additional requirements for foreigners.
    • Accounts can be opened in international currencies (Euros, Dollars).
    • No restrictions or taxes when transferring money into or out of the country.
    • Strict banking secrecy regulations.
  • Solid legal system
    • Highly reputable for its respect of contracts and private property laws.
    • Impartial, independent and reputable Judiciary.
    • Residents and non-residents are treated equally.
    • Constitutional rights are enforced.
    • Strict tax secrecy laws.
  • Benign and transparent tax system
    • Low property taxes.
    • Moderate taxes for local business start-up.
    • Taxes are non-onerous for both residents and non-residents.
    • No inheritance tax.
    • Only certain types of foreign income are taxed (12%) for residents.
    • Strong system in place to ensure you are not double-taxed if you have already paid income taxes elsewhere for residents.

How is the property purchase structured?

  • Buyer selects a property and agrees on the price with IRIS Realty, Punta del Este. Buyer selects Notary Public (IRIS Realty can recommend a Notary Public).
  • Notary Public drafts Pre-exchange Contract (‘Boleto de Reserva'), which:
    • Secures purchase to both the committed seller and buyer.
    • Sets penalty to either party breaching commitment.
    • Sets down-payment made concurrently to signing of ‘Boletto de Reserva.'
    • stays in escrow with the appointed Notary.
    • Allows 30-60days for the property to be verified for good-standing.
    • Sets the deadline for the full-payment and property transfer.
  • Purchase document (‘Escritura de Compraventa') is signed, price is paid in full or partially in installments with a ‘Compromiso' document, and property is subsequently transferred to the buyer.


Role of Notary Public

  • Looking after the buyer's interest in the purchase process.
  • Down-payment stays in escrow with Notary.
  • Ensuring that the property has a clean title by analyzing the ownership history.
  • Drafts the reservation and purchase documents.
  • Records the individual ‘Padron' number of purchase at the Public Registry.

Note: Power of attorney can be granted to complete the purchase process.

Transaction costs for the Buyer

The base buyer transaction costs are approximately 8% to 9% of the purchase price:

  • The real estate fee: 3% of the purchase price plus VAT*.
  • The Notary Public's fee: 3% of the purchase price plus VAT*.
  • Property Transfer Tax (ITP): 2% of the cadastral value of the property, usually lower than market price, adjusted for inflation.

Note: There may be additional costs, such as granting a power of attorney, registry and tax certificates stamp duties, legal and accounting advice, or a property inspection by an architect.


Transaction costs for the Seller

The base seller costs are therefore approximately 4.5% to 5.5% of the sale price:

  • The real estate fee: 3% of the sale price and plus VAT*.
  • Property Transfer Tax (ITP): 2% of the cadastral value of the property, usually lower than market price, adjusted for inflation.

* VAT is charged at 22%.