Editor’s Note: Welcome to the “Escape the Chaos: Best of Sovereign Investor Daily” series. All this week we are highlighting some of our best articles that focus on key tips and tricks for moving offshore, information on countries that support your expatriation and wealth protection goals, and much more.
“Uruguay has now definitely earned its long-time nickname — the Switzerland of Latin America.” That’s what I wrote several months ago during my first visit to this small, south Atlantic costal country wedged between Brazil and Argentina.
Our week has included highly educational presentations by our man in Uruguay, attorney Juan Fischer, and his excellent staff. Topics centered on offshore living in Uruguay, including residence and second citizenship, real estate (especially farmland), low taxes, banking and the country’s history.
Of course, we have spent time in Montevideo, but also in South America’s leading international ocean resort, Punte del Este, with its spectacular beach and views of the blue, south Atlantic. Uruguay is home to 3.3 million people — 1.8 million live in the capital, Montevideo, and an estimated 88% of the population is of European descent.
Robust Banks and a Strong Economy
Last Saturday, just in time for us visiting Americans, the International Monetary Fund released its annual review of the country, heaping praise on Uruguay for its “spectacular growth, prudent macroeconomic policies, deft debt management” and its “robust banks” that have protected Uruguay’s economy from outside shocks.
The IMF projects the economy will grow 3.5% to 4% in 2013, with inflation at 4% — much less than its neighbors, especially Argentina with its economic turmoil.
Members of our delegation were welcomed by representatives from some of those “robust banks” who helped open accounts for them in a country truly different compared with the one in which we regimented, privacy-deprived Americans are forced to suffer. Bank secrecy here is guaranteed by law, and it takes a court order to waive that.
Uruguay has joined the OECD-approved good bank-keeping list, and has signed a number of tax information exchange treaties — although none with the United States.
American clients are welcome, as long as they comply with Uruguay’s anti-money laundering laws, file IRS reports and pay their U.S. taxes. Uruguay imposes no taxes on the offshore income of foreigners living here — only on in-country earnings.
As Uruguayan attorney Juan Fischer told our assembled conference attendees: “There is now no such thing as absolute bank secrecy anywhere in the world.” But, unlike the U.S., where all privacy has been killed by the Patriot Act, privacy still exists in Uruguay for honest Americans and other foreign nationals.
It was just a year ago that Erika Nolan wrote a column entitled “Top Seven Reasons Why Uruguay is Your Best Choice for South American Offshore Living.” The points included quality of life, good infrastructure, profitable investments, beautiful beaches, personal safety, friendly banking and a broad welcome mat for foreigners, both as new residents and eventual citizens.
Well, all of that is here and available, as our traveling companions found out.
A Place That Could Become Home
Uruguay is clearly a beautiful place to call home. One American expat here describes Uruguay as a well-kept secret for North Americans, but now the secret is out. Every year, more foreigners make Uruguay their home, along with many second-home buyers and investors.
Forbes magazine last year surveyed more than 100 countries and rated Uruguay number one in the world for personal freedom. The Chilean polling firm Latinobarómetro, in its 2011 annual poll of Latin American public opinion in 18 countries, found that in every measure of national satisfaction, Uruguay is the Latin leader.
Another important question was whether respondents felt their country was “governed by a few powerful groups in their own interest” or “for the good of all the people.” Once again, Uruguay scored at the top, with 54% saying that the country was run “for the good of all the people.”
You can guess how most Americans would answer that question these days.
With that contrast in mind, you may want to explore offshore living in Uruguay. Real estate prices are rising, but are far below comparable U.S. prices, and farmland here offers special investment bargains.
The laws and the government here welcome foreigners as immediate residents and citizens after three to five years. The country’s seven banks welcome Americans as clients and hold more than half of their cash in U.S. dollars and euros.
If you’re looking for a country that welcomes foreigners and offers a zero tax rate on foreign income, with the freedom to open bank accounts that pay more interest than U.S. banks, in a safe and stable social and economic environment, Uruguay is it.
And the national motto here could have been written by Virginia’s Patrick Henry. It is: “Libertad o muerte!”— “Freedom or Death.”
Uruguay is more than a safe haven worth visiting. It could be your new home.
Yours for liberty,
Bob Bauman JD
Chairman, Freedom Alliance