Uruguay, situated on the South Atlantic coast between Brazil and Argentina, has been categorized as the country with one of the highest standards of living in all of Latin America, according to the United Nations Program for Human Development. Charming colonial towns, a cosmopolitan capital city and a cluster of internationally renowned beaches draw visitors from around the world.
For the real estate investor, there are a number of opportunities to consider, according to the London-based international property consulting group Knight Frank. Part of the attraction is that a foreign investor is treated the same way as a domestic investor under Uruguayan law, according to advisory information on the Embassy of Uruguay web site. "There are no restrictions to transfer capital or profits abroad, nor to enter into contracts expressing the obligations in any currency. Additionally, there are no controls on foreign exchange transactions."
Tourism is an important source of revenue in Uruguay and there has been growth in the building of international hotel chains. Further development is expected in the entertainment and leisure sectors. Residential real estate also offers potential for investment, particularly in Punta del Este, the well-known seaside resort that attracts a South American and European "jet set" fraternity. With close to 300,000 visitors each year, this coastal town is referred to as the 'St. Tropez of South America."
Real estate prices range from under USD$50,000 for a one-bedroom apartment to over US$ 1 million for a majestic four or five bedroom house with gardens. With three golf courses, numerous tennis clubs, vibrant social activities and endless sandy beaches, Punta del Este is one of the desired destinations, located about 130 km (80 miles) from the capital city of Montevideo.
Other attractive features of the country include historic fortresses, natural forestry resources, hot water springs, and cultural events such as art, cinema, and jazz festivals. Uruguay has the highest literacy rate in Latin America (97%) and enjoys a top ranking in the number of households above the poverty line (94%).
Ninety percent of the population of approximately 3.2 million is of European descent, and the country boasts the most equitable wealth distribution in Latin America. The capital city, Montevideo, surrounded by sea and parks, contains about half of the country's total population.
Uruguay has a well-maintained developed road system reaching out from the Capital City and the Port of Montevideo. There are three international bridges across the River Uruguay uniting Argentina and Uruguay. The world's longest bridge (42 km/ 26.1 miles) is in the planning stages and will link Uruguay with Argentina, bringing the 12.5 million inhabitants of Buenos Aires closer to Uruguay. Brazil is linked to Uruguay by four highways. The railroad system fans out from the capital and provides over 3,000 kilometers of tracks for transporting cargo.
Land prices are remarkably inexpensive, compared to Europe and North America. Current values for land suitable for agriculture and livestock begin from under USD$ 400/hectare and typically average, good-sized farm, including a ranch house is priced at about USD$500-700/hectare. Knight Frank Farms Department, Partner Clive Hopkins comments: "In particular, farms and land holdings to the south west or west of the country have particularly good potential to appreciate."
Uruguay's Forestation Plan, which offers special benefits, has attracted a number of individuals and major organizations, including Royal Dutch Shell UPS Kymene and National Cellulose of Spain who have both forested about 25-30,000 hectares.
Uruguay has long become the financial center of the region, following the regulations in l982 authorizing tax-free offshore banking. As a result, numerous major foreign banks are present in the country. A new President, Mr. Jorge Batlle of the Colorado Party, took office on 1 March 2000, for a five-year term. His coalition government generally follows the same open market policy and price stability of the previous government. President Batlle, a vowed liberal, is also an advocate of foreign investment and export growth.
Consistent economic policy has helped tame annual inflation from l29% in l990 to 5.05% in 2000. For individuals and companies there is freedom of incoming and outgoing capital, including profit repatriation. There is no personal income tax and foreign labor is freely contracted.
In summary, Uruguay offers many travel and real estate investment opportunities; especially within the context of Latin American investment where its stable economy, educated population and liberal policies have created a climate that is ripe for further development.
Note: A special thanks to Nicolas Konialidis of Uruguay-based CCGU, Compania Comercial Greco Uruguaya, in Montevideo, for background information and resource links for this article about real estate investing in Uruguay. His family-owned company has over 60 years of experience in investing in agriculture, fisheries and real estate in Uruguay. He can be reached at ccgu at movinet.com.uy
Pat Rioux
