Uruguay

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.

Citizens by 2033.

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

1. 2027
   Residence begins

   No permit term of its own; the clock runs on legal residence.

2. 2032
   Apply for citizenship

   With a language test.

3. 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.
• How long the decision takes isn’t published; we allow a year.