I love Uruguay… it is, without a doubt, one of my top five choices in Latin America– the country is clean, beautiful, and cheap, full of great wine and friendly people. But if you’re considering the country as a place to live, work, or do business, there are definitely a few things you need to know:
First, Uruguay is NOT a financial center. It achieved a reputation over the years as a tax haven full of private, secret bank accounts. Not true. Sure it was a great place for wealthy Argentines to stash their cash, but frankly your 3-year old’s Piggy bank is probably safer than most Argentine banks.
By comparison, Uruguay’s banks seemed extraordinarily stable… and because it is so close to Buenos Aires, Uruguay became the natural offshore financial center for Argentina.
There was a time when Uruguay had some level of banking secrecy and no personal income tax. This has all changed, most recently because Uruguay was temporarily placed on the OECD’s banking blacklist earlier this year.
Their Finance Minister literally jumped through hoops to have this scourge removed, and when the ‘blacklist’ label was dropped, any remaining semblance of bank secrecy went with it.
Ironically, despite no longer having any significant benefit, many banks in Uruguay refuse to work with US citizens. You will run into this a lot at many private banks– so if you are looking to open a personal account there, try Banco Republica: it’s a government-owned bank with government-backed deposit insurance, and they accept US customers.
The second thing you need to understand is that Uruguay is not a tropical paradise. Sure it’s a lovely place, but there are definitely four seasons there– it’s not Costa Rica or even Brazil where you can expect balmy weather year-round.
Third, you have to be prepared to enter a time warp… though a lot of people are drawn to the old-timey feel of Montevideo; the entire country is so quiet and sleepy, it seems as if you were living in the 1950s.
Fourth- Punta del Este is a vibrant, happening place… for about 3 months out of the year. From December through February, Punta swells as thousands upon thousands of visitors from around the world descend on this small town to party all night and roast all day.
The nightclubs are nonstop, the restaurants are packed, and the beaches are littered with European models and FashionTV shoots.
For the other nine months, Punta is about as happening as an average town in rural Iowa… and pursuant to point #2 above, these are the months where the weather is slightly less than spectacular.
Fifth– Staple items like groceries are noticeably cheaper in Uruguay, at least 10% to 30% less than what you would pay in North America, Europe, or Australia. But if you’re in the mood to go shopping for clothes, cars, electronics, or just about anything that has to be imported, get ready for sticker shock.
The Uruguayan government imposes stiff luxury taxes and duties on imported goods, and this includes most products beyond basic staples.
For example, rundown cars that you wouldn’t consider paying more than $5,000 for in North America might cost $10,000 to $20,000 in Uruguay; and a shiny new computer at the Punta del Este Apple store will set you back almost twice what you would pay in the US.
You can get around the stiff automobile prices by first purchasing and registering a vehicle in another country, then driving it into Uruguay as a ‘tourist’. This is a prime example of the multiple flags theory that I discuss frequently– having your assets registered in one country and living in another.
Overall, you should consider Uruguay if you fall into the internationalist, hermit, or retiree expat categories.
If you have any other personal experiences from Uruguay or specific questions, I would love to hear them.