# Uruguay: Tax Residency and Tax Holidays (2026 Rules) > How to obtain Uruguay tax residency after the 2026 reform (Law 20.446): new investment threshold around 2 million USD, 11-year tax holidays, and 12% rate on foreign income. Author: Алёна Дунаева — юрист, Family Office (https://wiki.private.law/authors/dunaeva) Last modified: 2026-07-21T17:17:00.000Z Canonical: https://wiki.private.law/en/uruguay-tax-residency Topics: investments Jurisdictions: global Semantic tags: tax-regime --- ## Concept Uruguay is the most "European" and predictable country in Latin America: stable politics, solid banks, the rule of law. What made it a magnet for capital is the pairing of residency-by-investment with long tax holidays — up to eleven years — on foreign income. Budget Law 20.446 markedly raised the entry threshold from 2026, so it is the current version of the rules that matters. ## How to Become a Tax Resident There are several basic routes. The first is to spend more than 183 days in the country in a calendar year; short trips abroad may still count as days of presence. The second is to move your centre of vital or economic interests to Uruguay: the law presumes residency when a spouse and minor children live here, or when Uruguayan income exceeds income from other jurisdictions. The third is the investment route: real estate above UI 15,000,000 with no presence requirement, above UI 3,500,000 combined with 60 days a year, or participation in industrial projects that create jobs. The investment route is usually chosen by those unwilling to spend half the year in the country from the outset; how the 183 days and the centre-of-interests test mesh with other countries' rules is covered in the pieces on [tax residency](https://wiki.private.law/en/tax-residency-basics) and the [tie-breaker](https://wiki.private.law/en/tax-residency-tiebreaker). ## Tax and Immigration Residency Uruguay separates two statuses that are easy to confuse. Tax residency is confirmed by a certificate from the DGI (Dirección General Impositiva) and turns on presence, economic interests, and ties to the country. Immigration residency is granted by the National Migration Directorate: it confers the right to live and work but does not, by itself, create tax residency. The reverse is also true — you can become a tax resident before the immigration formalities are complete. The distinction matters in practice: it is the DGI certificate that you need in order to invoke double-tax treaties and to prove a shift of your centre of interests to the country of departure. The immigration track, meanwhile, leads to naturalisation — after three years of residency for applicants with families and five years for single applicants. ## 2026 Reform: Threshold Increased Until the end of 2025 there was a popular entry point: real estate of roughly USD 590,000 (about UI 3,500,000) plus at least 60 days of presence a year — and it was this combination that opened the multi-year holidays. Law 20.446, enacted as part of the 2025–2029 budget, closed that cheap route to new applicants from 1 January 2026. The investment-based presumption of residency remains, but the reform detached access to the tax benefits from it and raised the bar to roughly USD 2,000,000 (around UI 12.5 million). Those who obtained residency and entered the holiday regime before 31 December 2025 keep the old terms (grandfathering). > ⚙️ Routes to the holidays in 2026: real estate investment of roughly USD 2,000,000 (around UI 12.5 million), or a contribution of about USD 100,000 a year for ten years into innovation and technology funds. Basic residency is still granted by 183 days, the centre-of-interests test, and larger business investment; the former "≈ USD 590,000 + 60 days" entry is closed to new applicants from 2026. ## Tax Holidays The main fiscal bonus is the holiday on foreign passive income (dividends and interest): it is exempt in the year residency is obtained and for the following ten years — eleven in total. The alternative of a permanent 7% rate for new residents is being phased out, while those already in it keep it. When the holidays end, foreign passive income is taxed at the standard IRPF rate of 12%; a reduced rate may apply in the transitional years — worth checking against the current version of the law. In practice the holidays pay off most for holders of a large foreign portfolio of dividends and interest: eleven years at a zero rate on such income cover both the cost of entry and the move itself. > 💡 The holidays are generous but finite: after 11 years, 12% kicks in on foreign passive income. Plan from the outset for the "exit" from the holidays — where residency will shift, or how the income structure will change by then. ## Transparency and Compliance after the Reform The 2026 reform is not just about thresholds. Law 20.446 widened the IRPF perimeter over certain types of foreign income, restricted the use of offshore holding structures, and allowed bank secrecy to be lifted at the DGI's request. Uruguay has long taken part in automatic exchange under CRS, so counting on account opacity is unwise — data on beneficial ownership and foreign assets reaches the tax authorities regardless. Anyone building an ownership structure around Uruguayan residency should check in advance against the rules on [CRS](https://wiki.private.law/en/crs-overview), the requirements for [beneficial ownership](https://wiki.private.law/en/beneficial-ownership-nominee), and the logic of the [holding ladder](https://wiki.private.law/en/holding-dividend-flows). > ⚙️ A practical point: the DGI tax-residency certificate and evidence of genuine presence — a lease, utility bills, flights — are worth gathering from the first year. The country of departure asks for them when it challenges a change of residency, and they also protect access to the holidays under a tax audit. ## Who It Suits > 🔗 **Related** > [Tax Residency: 183 Days](https://wiki.private.law/en/tax-residency-basics) · [Paraguay: Residence](https://wiki.private.law/en/paraguay-residence) · [Panama Friendly Nations Visa](https://wiki.private.law/en/panama-friendly-nations) · [Italy: Flat Tax](https://wiki.private.law/en/italy-flat-tax) · [Cyprus: Non-Dom](https://wiki.private.law/en/cyprus-non-dom) · [Special Tax Regimes](https://wiki.private.law/en/special-tax-regimes) Uruguay suits those who want a solid, reputable base in Latin America and are ready either to genuinely relocate for 183 days or to invest around USD 2 million. After the reform it is a premium proposition: you pay for entry in money or in presence, and in return you get political stability, first-tier banking, and long holidays on foreign income. Those looking for a budget entry will find [Paraguay](https://wiki.private.law/en/paraguay-residence) or [Panama Friendly Nations](https://wiki.private.law/en/panama-friendly-nations) closer to the mark; those comparing preferential regimes have [Italy's flat tax](https://wiki.private.law/en/italy-flat-tax) and the broader map of [special regimes for new residents](https://wiki.private.law/en/special-tax-regimes). > 💡 Uruguay's strength is stability plus 11 years of holidays on foreign income; its weakness after 2026 is the raised investment threshold (around USD 2 million) and the phasing-out of the permanent 7% rate for newcomers. *This material is for informational purposes and is an expert overview, not individual advice. Thresholds in indexed units and tax rates change — verify the current version of the law for your specific situation.* --- ## Sources - [DGI — Dirección General Impositiva (Uruguay)](https://www.dgi.gub.uy/) - [gub.uy — certificado de residencia fiscal (trámite)](https://www.gub.uy/tramites/solicitud-certificado-residencia-fiscal) --- ## Factual claims - Uruguay is the most "European" and predictable country in Latin America: stable politics, solid banks, the rule of law. - Until the end of 2025 there was a popular entry point: real estate of roughly USD 590,000 (about UI 3,500,000) plus at least 60 days of presence a year — and it was this combination that opened the multi-year holidays. - The 2026 reform is not just about thresholds. - Uruguay suits those who want a solid, reputable base in Latin America and are ready either to genuinely relocate for 183 days or to invest around USD 2 million.