Uruguay Tax Residency – Complete 2026 Guide

Uruguay stands out to foreign investors seeking greater tax certainty and stability and possibly reduced global tax burdens.  

Under its domestic law, Uruguay offers clear opportunities for individuals to establish tax residency and enjoy a wide range of benefits, including not being generally taxed on foreign-earned income.  

Wondering whether Uruguay tax residency may meet your needs? Let’s explore all you need to know about this tax residency, its benefits, characteristics, and what to expect.  

Key Takeaways 

• Uruguay tax residency determines when an individual is considered a taxpayer in Uruguay, based on rules set by the Dirección General Impositiva (DGI). It is slightly different from legal residency obtained through immigration pathways. 
• Uruguay operates a semi-territorial tax system. This means, foreign-sourced income is generally not taxed, making Uruguay attractive to international entrepreneurs, families, and foreign investors seeking better tax conditions. 
• Individuals qualify for Uruguay tax residency through multiple pathways, including spending more than 183 days per year in the country, establishing Uruguay as their main center of economic or vital interests, or creating a presumption of residency through specific, qualifying investments. 
• Individuals who obtained tax residency from January 1, 2026, may enjoy an updated tax holiday regime, offering up to 10 years of preferential taxation on foreign-source capital income, provided they choose to be taxed under the Non-Resident Income Tax (IRNR) instead of the standard personal income tax (IRPF). 
• Tax residency must be verified annually and supported by a Tax Residency Certificate issued by the DGI, with continued eligibility depending on maintaining the applicable residency conditions. 

The Uruguay tax residency determines when an individual is considered a taxpayer in the country for fiscal purposes. It is governed by the Dirección General Impositiva (DGI) or General Tax Directorate and represents the fiscal connection between an individual and Uruguay based on certain conditions, like time spent in the country, interests, and economic activity.  

Note that there is a distinction between legal and tax residency.  

For example, if you choose to move to Uruguay via the Independent Means Visa as an online business owner, you must meet the specific eligibility and financial requirements of this visa program and then get residency (temporary first, then permanent residency).  

With this visa, you are not automatically considered a tax resident under Uruguayan law. This is because you have legal residency, which allows you to live in the country, whereas tax residency follows a different set of laws.  

On the other hand, to be considered a tax resident in Uruguay, you would have to meet specific tax residency criteria and get a tax residency certificate. In this scenario, Uruguay considers you a tax-paying resident, and you may enjoy favorable tax treatment on foreign-sourced income and other benefits.  

So, it is possible to be a tax resident but not a legal resident, and vice versa.  

Highlights of Uruguay tax residency 

• It determines when an individual is considered a tax resident in Uruguay, and it must be verified and renewed annually.  
• Tax residency follows a unique set of rules set by the Dirección General Impositiva (DGI). It is different from legal residency and may exist with or without it.  
• The main benefit of Uruguay tax residency is in its territorial tax system that generally excludes foreign-sourced income from taxation.  
• An individual is considered a tax resident in Uruguay if:  
  • they either spend more than 183 days in a year in Uruguay 
  • they have a spouse or dependent minor living in the country as residents 
  • Uruguay is the main location of their economic or vital interests 
• Uruguayan tax residency benefits international entrepreneurs, families relocating to Latin America, wealthy foreign investors with global assets, etc., amongst others.  

• Semi-territorial tax system: In Uruguay, there is generally no income tax on foreign-sourced earnings. Foreign entrepreneurs and investors can enjoy their foreign income tax-free.  
• No strict presence requirements: You don’t have to spend much time in Uruguay to maintain your tax residency status. This is perfect for international entrepreneurs and even digital nomads. 
• No double taxation on foreign income: The taxes you pay abroad are credited in Uruguay, so you can avoid double taxation on the same income.   
• Clarity on taxation: Uruguay offers clear, predictable, and practical routes for individuals to establish tax residency under its domestic tax law.  
• Time-limited tax holiday for new tax residents: New Uruguayan tax residents will enjoy a temporary period where their foreign-sourced income is partially or completely exempted from tax

You must meet one of three main requirements outlined below to become a tax resident in Uruguay.  

Physical presence (183-day rule)  

This is the most commonly used pathway to tax residency in Uruguay. The individual must be physically present in Uruguay for more than 183 days in a calendar year.  

• The days may be consecutive or non-consecutive  
• Short trips abroad (generally up to 30 days at a time) are treated as days spent in Uruguay  
• Any fraction of a day counts as a full day  

You should note that the Dirección General Impositiva applies substance-over-form analysis to assess your presence in Uruguay to ensure it is meaningful and close to half the year. Simply counting days is not enough and tax residency has been denied in cases where  the DGI deemed stays artificial despite meeting the 183-day treshold.  

Center of economic interests 

Uruguay may consider an individual a tax resident if the country is the main center of their economic interests and activity. This only applies when you earn more active income in Uruguay than in any other country. Note that pure capital income (dividends, interest, rents) is excluded from this test, protecting passive investors from unintentionally triggering tax residency. 

However, note that pure capital income (dividends, interest, rents) is excluded from this test. This is done to protect passive investors from unintentionally triggering tax residency. 

Family / Center of Vital Interests  

You may be considered a tax resident if your legal spouse and dependent minor children habitually reside in Uruguay. Some important clarifications for this pathway are:  

• All family members must themselves be recognized as residents  
• Casual or temporary stays are insufficient  
• This is a rebuttable presumption, which may be overturned by proving effective tax residence in another jurisdiction  

Obtaining tax residency through investment 

Uruguay also allows people to gain tax residency through specific investments. The investment alone does not make you a tax resident in the country. It only creates a strong fiscal link unless you can prove tax residency in another country.  

Some of the qualifying investments are:  

• High value investment (no physical presence): If you make a high value investment in real estate worth USD 2.4 Million or invest USD 7.2 Million in a company declared of national interest  
• Other investment routes (physical presence required): New investment routes were introduced in 2020 to attract foreign investors to Uruguay. This route involves:  
  • investing USD 550K in real estate and staying in the country for 60 days (minimum) each year 
  • or investing USD 2.4 Million in a Uruguayan business and creating at least 15 full time jobs.  

Note that the investment pathway only creates a presumption of tax residency and does not automatically make you a tax resident in Uruguay. This presumption is also assessed every year.  

Tax Residency Certificate 

Once your tax residency is established, you can then request a Tax Residency Certificate from DGI. The tax residency certificate is only valid for one year and must be renewed annually. Successful renewals require proof that the individual is still meeting the residency requirements.  

Individuals who became tax residents in Uruguay from January 1, 2026, get to enjoy the updated tax holiday regime. In this regime, eligible new tax residents may get up to ten years of preferential taxation on all foreign-source capital income, including dividends, interest, and royalties.  

Basically, they won’t pay taxes on income generated outside of Uruguay for up to ten years.  

However, they can only benefit from this reduced income tax if they opt to be taxed under the Non-Resident Income Tax (IRNR) rather than the standard personal income tax (IRPF).  

How to qualify for the tax holiday 

How you qualify for this tax holiday depends on how you became a tax resident in Uruguay. Let’s explore the different options: 

• If you become a tax resident through physical presence, no investment is required to qualify for the 10-year tax holiday. 
• If you became a tax resident via investment, you must make an extra investment worth USD 2M in Uruguayan real estate or contribute USD 100,000 per year to a Government fund to be created focused on innovation, research, science, and technology. 

What happens after the first 10-year period? 

After the initial 10-year tax holiday, beneficiaries may choose::  

Option 1: Reduced Rate (5 additional years, years 11-15) 

• Pay IRPF on foreign capital income at 50% of the standard rate 
• Requires: Continue USD 100k/year to innovation fund OR invest USD 1M in real estate 

Option 2: Fixed Annual Payment (up to 20 years total) 

Pay fixed annual IRPF of USD 200k-300k (amount depends on how tax residence was obtained). This can be applied for up to 20 years total.