Uruguay

Tax Holiday for New Tax Residents. New Uruguayan tax residents can elect an 11-year exemption on foreign-source passive income and capital gains, rather than Uruguay's ordinary tax treatment.

Free · The law behind every answer · Checked Sep 27, 2026

Tax Holiday for New Tax Residents

An 11-year exemption from tax on foreign-source passive income and capital gains for new tax residents.

Who qualifies

Become a tax resident of Uruguay, generally 183+ days a year or center of economic interests there.
Uruguay Tax Residence in 2026
Elect the exemption on first becoming a tax resident to cover the year of residency plus 10 more, 11 years total.
Uruguay's 11-Year Tax Holiday, 2026 update
Law 20.446, effective January 1, 2026, is phasing out the old permanent reduced flat-rate alternative for new residents; existing beneficiaries are grandfathered.
Uruguay raises tax-holiday threshold to $2 million

You keep your U.S. citizenship.

It could fit.

New Uruguayan tax residents can elect an 11-year exemption on foreign-source passive income and capital gains, rather than Uruguay's ordinary tax treatment.

Every door that fits your family

Not legal advice.

What it takes.

Time: Elected at the time tax residency is established.
Cost: Professional tax-advisory fees only; no direct government fee.
The hard part: The 2026 reform changed the rules and is actively phasing out the old permanent 7% flat-rate option for new residents, so current advice should be double-checked.

Citizens by 2033.

If your first permit is issued in 2027 and you keep living there, this is the road.

2027
Residence begins
No permit term of its own; the clock runs on legal residence.
2032
Apply for citizenship
With a language test.
2033
Citizenship

Language: You must understand and speak Spanish; the Corte Electoral will not process the case otherwise. There is no formal test; it is checked at the hearing.
Time away: Habitual residence counted from arrival: no absence may exceed 6 months in a row, or the count restarts from zero on return. You must prove with dated documents (migration records, social-security history, bank, school or medical records) that you lived in Uruguay on specific days, months and years, and bring two witnesses who have known you for the whole period.
Two passports: Yes. You keep your U.S. citizenship.

A tax election for new tax residents (the year you arrive plus 10), not a permit; tax residence through investment does not prove the habitual residence citizenship needs.
Legal citizenship is not nationality. A naturalised person becomes a Uruguayan legal citizen but keeps their birth nationality, cannot vote until 3 years after the letter of citizenship, and loses legal citizenship by later naturalising anywhere else (Constitution art. 81). Since 23 April 2025 the passport shows 'Nacionalidad/Ciudadanía: URY' and no longer prints the place of birth, which fixed most border problems (Ministry of the Interior, https://www.gub.uy/ministerio-interior/comunicacion/noticias/uruguay-actualiza-introduce-cambios-pasaporte-para-mejorar-movilidad), but some countries' visa rules may still look at the birth nationality.
A bill rewriting Ley 8.196 (the citizenship procedure, including the witness hearings) passed the Chamber of Representatives in May 2026 and awaits the Senate; the Corte Electoral reports a growing backlog (https://www.uruguaypais.uy/2026/06/ciudadania-legal-corte-electoral.html).
The program file's '183 days a year' rule is not in the Corte Electoral manual; the official rule is the 6-month continuous-absence reset plus dated proof of living in Uruguay. Lawyers commonly advise spending more than half of each year there.
Whether the clock runs from arrival or from filing the residence application: the Corte's page says from entry into the country; in practice the residence has to be proven by dated documents from that date.
No official decision-time figure; about a year is commonly reported.
UY-RENTISTA's permit is shown as 5-year cards only as a placeholder: the status is indefinite, and the identity-card length for permanent residents was not found on an official page.
How long the decision takes isn’t published; we allow a year.

The law behind these dates

Dirección General Impositiva — Tax Holidays: opción para nuevos residentes fiscales · checked 2026-09-25
Corte Electoral — Manual de ciudadanía, Circular 11376/2022 (IMPO) · checked 2026-09-25
Constitución de la República, art. 81 (IMPO) · checked 2026-09-25

Living there.

Time you must spend there: 183 days a year, or another recognized tax-residency test.
Tax: An 11-year exemption on foreign passive income and capital gains; Uruguay-source income is taxed normally.

We never file a tax return. We tell you what applies and brief the professional who does.

Start today.

Consult Uruguay's Dirección General Impositiva and establish tax residency alongside immigration residency.Open gub.uy ↗
Round up the papers.
- Become resident in Uruguay under a residence program

Or let us run it.

$900for your first year as a founding member. Then $399 a year, automatically.Standard first year: $1,200. Everyone renews at $399.One membership, the whole family. Accounts and activation included.

5 steps, from the first paper to every renewal. You do 1 of them: send what we ask for, sign, and show up. We run the rest, and keep every permit renewed on time. Accounts and activation are included, whether you move now or keep the plan ready. Accounts depend on provider availability. Government, record and approved third-party charges are extra.

Run it for my family →

ISSUED TO

YOUR FAMILY

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