For a long time, Uruguay's tax holiday for new residents was the strongest argument for the country: once you became resident, you could keep your foreign capital income out of Uruguayan income tax for a number of years. With the budget law of December 2025, Uruguay rewrote this regime for everyone who becomes resident from 1 January 2026. The law set out the framework, and the details have only now arrived: with Decreto 188/026 of 10 August, Decreto 225/026 of 16 September and two resolutions from the tax authority DGI, the most recent dated 8 October. If you plan to move to Uruguay in 2026 or 2027, you can now work out for the first time exactly what the tax holiday costs and what it gives you.
An overview of the whole budget law and the new tax on foreign income is in our article on the 2026 tax reform. This article focuses on the regime for new residents itself, known in Uruguay as the Régimen de impatriados.
The basic rule: eleven years outside the IRPF
The new regime sits in Art. 24-BIS of Title 7 of the tax code, inserted by Art. 648 of Ley 20.446. Under it, individuals who become tax resident in Uruguay from 1 January 2026 can choose, for their capital income and capital gains from foreign sources, the non-resident tax (IRNR) instead of the income tax IRPF. The choice applies to the year of arrival and the ten following tax years, so up to eleven years in total.
Why this amounts to an exemption is clear from Art. 1 of Title 8: the IRNR covers only income from Uruguayan sources. Dividends from a US or German company, interest from a Swiss bank or gains on an ETF domiciled in Luxembourg therefore fall outside taxation for as long as the option runs.
The option applies only to this foreign capital income. Income from Uruguay stays taxable as normal, for example salaries, fees for work done in the country or rent from a flat in Montevideo. The choice can be made only once.
Two conditions apply in every case: you must not have been resident in Uruguay in the two tax years before your arrival, and you must not have used the old regime under Art. 24, apart from the transitional cases the law provides for people who arrived before 2026.
Three ways to meet the condition
What is new is that the tax holiday now comes with a condition. Art. 24-BIS sets out three ways, and you have to meet one of them.
Route 1: more than 183 days in the country
If you spend more than 183 days in Uruguay in a tax year, and thereby establish residence under Art. 2(A) of Title 7, you can use the option without any investment. The condition has to be met in every tax year. For many newcomers who genuinely want to live in Uruguay, this is the simplest route.
This is a deliberate choice by the legislator: the tax holiday without capital outlay is reserved for people who spend most of the year in the country. If you instead establish residence through the centre of your economic interests and spend less time there, you need one of the other two routes.
Route 2: property worth more than UI 12.5 million
The second option is an investment in Uruguayan real estate worth more than 12,500,000 Unidades Indexadas (UI). The UI is an inflation-indexed unit of account. At the central bank's closing rates of 23 October 2026, 6.6745 pesos per UI and 40.078 pesos per US dollar, that comes to around 83.4 million pesos, or just under USD 2.1 million (about EUR 1.86 million).
The details are set out in Art. 5-SEXIES of Decreto 148/007, inserted by Decreto 188/026 and, on this point, reworded by Decreto 225/026:
Route 3: an annual fund investment from UI 625,000
The third route is capitalising investment funds that finance productive projects, research or applied innovation, with at least UI 625,000 a year. That is around 4.2 million pesos, or roughly USD 104,000 a year. The Ministry of Economy decides which funds qualify. Unlike the property route, this condition has to be met afresh every year.
If you miss a condition for a while
Art. 5-SEXIES contains a rule that matters to many people: if you fail to meet the conditions in one year, you do not lose the option for good. You can use it again in the years in which the conditions are met once more. The clock keeps running, though: what counts is always the ten tax years after the year of the option, and lost years are not added on at the end.
After the eleven years: half rate or a fixed sum
Art. 24-BIS also sets out what comes after the tax holiday ends. There are two follow-on options.
Option i: half the tax rate for five years. You pay IRPF on your foreign capital income at half the rate, so 6 instead of 12 percent, for five further tax years. The choice can be made only once. It requires either the annual fund investment from UI 625,000 or a property investment of more than UI 6,250,000 (around USD 1.04 million). Here too, under Art. 5-SEPTIES, only purchases from 1 September 2025 count, and urban property in the interior counts double. If you have already established your residence through a property, you may count only the part above the threshold that applies there. Under Art. 44 sexies of Decreto 148/007, banks in Uruguay withhold 6 percent each month under this option.
Option ii: a fixed annual sum. Instead of accounting for each item of income, you pay a fixed tax of UI 1,875,000 a year on all foreign capital income, which at the rate of 23 October is around 12.5 million pesos, or about USD 312,000. In years in which you spend more than 183 days in the country, the amount falls to UI 1,250,000 (around USD 208,000). The same reduced amount applies if you invest more than UI 45 million, around USD 7.5 million, directly in a company to increase its production capacity. Spouses can join and then pay 15 percent of the relevant amount. This option is chosen again every year and can be used for up to twenty tax years after the first choice.
A simple calculation shows who the fixed sum is for: at a 12 percent tax rate, UI 1,875,000 corresponds to annual foreign income of around USD 2.6 million, and the reduced amount to a little over USD 1.7 million. Option ii is therefore an offer to very large fortunes. For an ordinary portfolio, the half rate or simply the standard taxation is cheaper.
What applies if you arrived before 2026
If you moved to Uruguay before 2026, you fall not under Art. 24-BIS but under the old regime of Art. 24. Under it, people who arrived from 2020 onwards could choose the IRNR for the year of arrival and ten further years, or the IRPF at a rate of 7 percent. The law had set a deadline of 31 December 2025 for this choice.
The DGI has extended that deadline. Under No. 7 of Resolution 2158/026 of 16 September 2026, the option under Art. 24 can still be exercised until 31 December 2026. If you became resident before 2026 and have not yet made the choice, you still have a good two months.
For everyone already using the old regime, Art. 24-BIS sets out the transition:
How the procedure works
The DGI set out the procedure in Resolution 2158 and tightened it with Resolution 2294 of 8 October:
What this means for your planning
The new regime is stricter than the old one, but clearer. If you genuinely want to live in Uruguay, you still get the tax holiday without any investment, but you have to spend more than half of every year in the country and prove it. If you spend less time there, you pay for the tax holiday with a property from just over USD 2 million, half that in the interior, or with an annual fund investment of around USD 104,000.
If you want to move in 2027: plan your days. The 183-day threshold applies per calendar year, and in the year of arrival it is hard to reach, depending on when you land. Whether you need the tax holiday in your first year depends on how much foreign income you have that year. The requirements for residence itself are set out in our guide to moving to Uruguay.
If you arrived before 2026 and have not chosen yet: the extended deadline of 31 December 2026 is your last chance for the old regime. Have a contador in Uruguay work out which of the old variants suits you.
If you are comparing the tax holiday with other countries: our overview of tax holidays in Uruguay, Chile and Ecuador shows the alternatives in the region, and the key facts about the country are on our Uruguay country page.
There is one thing the new decrees do not settle: what your home country asks of you when you leave. Your home country treats the change of residence under its own rules, whichever option you choose in Uruguay. What may be at stake, and how a treaty with Uruguay fits in, depends on where you come from: