Uruguay country information

Uruguay is one of the easyer countries to obtain legal residency (residencia legal permanente). Please view the the separate page immigration Uruguay

regulations of farmland property purchase

- foreigners : no restrictions apply. Foreigners, resident and non-resident, are treated the same as nationals and can purchase any lands of any size anywhere
- companies, as opposed to individuals, can buy farmland, too, but must register by name all their shareholders. Companies, which by nature, like pension funds, publically traded companies, can not name all their shareholders, can therefore usually not buy. In some prominent cases exceptional permit has been granted if deemed in national interest.

Property transactions costs

- buyer’s commission : 3% +VAT, negotiable with large transactions
- notary costs are somewhat high since contribution to national chamber of notaries and VAT alone amounts to 1% of sales price. Total notary fees should be 2 – 3,5% (VAT included) depending whether size of transaction allows for some negotiation of fees
- taxes and stamp fees amount to an additional 1%
- purchases of lands larger then 500 hectare involve another 2% of taxes

Taxes, capital transfer

- Uruguay taxes income (it was only introduced a few years ago), nationals on their world income, foreign legal residents on their territorial income (therefore excluding offshore income) rates naturally vary, 20% as rough figure might give an idea.
- Farming income is equally income taxed. However, medium size farmers, nationals and foreign legal residents, can opt for a low VAT on agri products (IMEBA), replacing income tax
- Tax on wealth is levied, but farmland is exempted
- Property tax on farmland, including social security contribution, is rather low. To serve as an example : 200 hectare land, Coneat 100, might pay roughly US$2000 anually
- Import duties are rather high, making some imported goods rather expensive, VAT : 22%
- Capital transfer, in & out of the country is unrestricted
- Uruguay has a general banking secret, however, globally (as of 2012) the tendency is clearly not in favour of banking secrets

above mentioned characteristics compare favourably to taxes, regulations in Argentina (in farmland investments news)

Uruguay climate, soils and topography

Uruguay is situated entirely in the humid subtropics, with 1200-1400mm annual rainfall, statistically evenly distributed throughout the year, though in reality droughts do occur. It is however the most benign climate belt for both agriculture and livestock
The land is in most parts gently undulating with smaller streams never being far away ( and ground water at 10–50m depth ).
Soils are mostly of the dark brown to black color type, of medium depth, favourable soil properties and medium high nutrient content (generally with P deficiency)

The two maps below serve well to indicate Uruguay’s agri pontial in global comparison because they take all major factors into account.

map suitability wheat cultivation, rain fed

map suitability corn cultivation, rain fed

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The most fertile soils are found in Uruguay's western/southwestern fringe.
The Uruguay soil fertility map below is based on Uruguay's Coneat soil productivity classification system, ranging from dark blue (high fertility) to red (poor fertility)

for detailed scientific description of each soil type follow links below :
soils type 0 - soils type 1+2 - soils type 3+4+5 - soils type 6+7 - soils type 8+9 - soils type 10 - soils type 11+12+13

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more uruguay soil maps

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Uruguay's climate does not vary significantly regionally, shown below :anual rainfall and mean temperature

Global climate change effects on Uruguay

Projections mostly predict a milder temperature increase compared to other world regions, and slightly increasing annual rainfalls, so that the precipitation - evaporation balance of soil humidity should remain roughly unchanged, with slightly increased vegetation periods and hence slightly rising yields for crops like soya and corn (maize). Rainfalls may on the other hand become more erratic, causing damage through droughts and run off. In total, the balance of effects for the next 40-50 years should be roughly neutral.

This 2010 World Bank publication map on estimated effects on yields in 2050 mainly confirms that high latitude regions will gain and most others will loose. The map has severe shortcomings, it does not differentiate within such climatically diverse countries as Argentina or Chile which will have their distinct gaining and loosing regions, but confirms the rather benign outlook for Uruguay.

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more uruguay climate/rainfall maps

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some figures, farming related, aproximate

- 1x Liter Diesel : US$ 1,75
- farm worker monthly labour cost : US$450
- grain prices : differing little (0-10%) from US and global prices
- life cattle / steers : US$1,90/kg

cattle/beef in Uruguay, numbers for the year ending June 2012
- size of Uruguay's national herd: 11,3 million head
- mortality, long term average : 2,5%
- slaughtered : 2,1 million head
- life cattle exported : 0,1 million
- beef exported : 360.000t at avarage US$3900/t, equalling US$1,4bn

Uruguay commodity prices, June 20-30.2012
grain prices : ex port Nueva Palmira or Montevideo, slaughter cattle : put in plant

- wheat US$/ton $250
- maize US$/ton $250
- soya US$/ton $520
- slaughter cattle, steers US$/kg life weight $1,87
- slaughter cattle, cows US$/kg life weight $1,57
- calves 150 kg US$/kg $2,40

(sources : www.camaramercantil.com.uy, www.acg.com.uy)

currency environment / stability

The Uruguayan Peso is freely convertible and has traded over the last 6 years rather close to 20:1 to the US$.
A rather high inflation of 6-9% over the last years, mostly wage increase driven, and anecdotal evidence, like restaurant prices, would indicate that the Peso is by now overvalued and a devaluation laying ahead.
In an export oriented agricultural sector like the Uruguayan a devaluation usually increases profitability.
Uruguay's current account is currently negative at around 2% of GDP.
Uruguay's central bank has interest rates at 8% (Oct.2012).