Ola Uruguay Real Estate and Investments

You can live in Uruguay almost indefinitely as a visitor by briefly leaving the country every six months. However, this can be quite an inconvenience, so for most people who move here, it is important to gain residency. One way to qualify for residency is through investment in government bonds.

When you become a resident, you receive a plastic identification card known as a cedula. Your cedula is used for everything in Uruguay. Virtually every transaction or purchase of service will require you to produce a cedula number. Every purchase with a credit card requires a cedula number (or, if you are not a resident, a passport number). You can’t even rent a movie at the local supermarket without a cedula number.

Unless you intend to work in Uruguay or operate a business, obtaining a cedula is really quite simple. The main requirement for application is proof that you have at least US$500 income per month. There are other requirements such as translated birth and marriage documents and police checks that vary according to country of origin, but monthly income is most important. Oddly, this figure is the same for a single person or a couple or a family.

Some countries will deposit an old age pension directly into an Uruguayan bank account. However, Canada, where we come from, does not do this. Therefore, we had to find a different way to show the income requirement. Originally our plan had been to buy some properties to rent. However, after our arrival, we found out there was a simpler way that appealed to us more—investment in Uruguayan government bonds.

We learned that by purchasing $100,000 in government bonds, we would produce enough monthly income to qualify for cedulas. We did, of course, have questions about the safety of such an investment. In our research, we discovered that during the Argentinean financial crisis of 2002, which had huge impact on Uruguay, the state bank froze accounts of depositors. However, when the situation eased, they paid interest on the frozen accounts. While some private banks failed during that period, BROU (Banco Republica Oriental de Uruguay) had survived quite well. Also it seemed they learned from that experience and made investments even more secure.

So we went to our local BROU to ask about bonds. Eventually, we purchased a bit more than the required amount; they pay 7% in U.S. dollars (you can also purchase bonds that pay out in euro). Without fail, through all recent financial times, slightly more than US$3,500 appears in our bank account twice per year. We think this is a pretty fair investment and moreover, it allowed us to obtain our cedulas.

After qualifying, you are first issued a temporary cedula. A short time later, you will receive your permanent cedula. It isn’t really “permanent” as it is issued for only three years. However, renewal does not require you to go through the whole process again. In fact, you don’t even have to prove your income again.

A few months ago, we found ourselves with $35,000 extra dollars in our Uruguayan bank account. We had transferred money from Canada but didn’t use it all. Pleased with our initial bond purchase, we went back to our friendly banker to discuss a further investment. As the U.S. dollar has been performing rather poorly, we decided to look at bonds that paid in Uruguayan pesos. The best option that our banker presented was for bonds that paid out interest monthly. We only had to sign up for a period of two years. The bonds pay at a rate of just over 11%. We are pleased to now have a monthly infusion of pesos into our bank account.

We know other expats who have also invested in Uruguayan bonds, and we’re told they are satisfied with their investments. We are pleased to have found a simple way to qualify for residency that also earns us a good return on investment.