Expert Retirement Planning

The tiny country of Uruguay in South America has become a retirement hot spot for a number of reasons. Firstly, it's easy to obtain not only a visa but also permanent residency status. It's also an extremely cheap place to live, but has a lively, European-style culture that's very attractive to many people. Then there's the warm weather and even the capital city of Montevideo is considered safe in terms of crime.

Visas to Uruguay

Unlike many other countries, there's no specific retirement visa for those who want to settle in Uruguay, but that doesn't pose too much of a problem. The country has some of the most relaxed rules in the world regarding permanent residency status.

Basically, if you have a personal income of just US$500 per month, you can apply for permanent residency in Uruguay, no matter what your age. If you're a US citizen you'll need to get a criminal background check through Interpol and the FBI. Citizens of other countries can provide a police good conduct letter. You'll also need a certified copy of your birth certificate, a health certificate and evidence of your US$500 a month income.

The process is also simple. You fly into Uruguay on a tourist visa, then apply for permanent residency status once you're there. You'll be issued a different visa while your application is being processed, which doesn't expire, although there are limits on the amount of times you can leave the country (more exit permits can be purchased for a small fee).

Real Estate

Prices vary considerably depending on where you buy, but in general property in Uruguay is much cheaper than you'd find in the US or the UK. A luxury home in the coastal enclave of Punta del Este will set you back a considerable amount (think US$150,000 and up) and property in Montevideo also tends to be pricey. You can get a nice apartment in the capital for around US$75,000 or even less in some cases.  But get away from these popular areas and the prices drop considerably.

Foreigners have the same rights as Uruguayan citizens to buy and own property in the country. But of course be careful and find a good lawyer to help you with the purchase, which will need to be properly notarized and registered with the local authorities.

Taxes in Uruguay

Uruguay is a low-taxing nation. While it now taxes income earned in the country under new legislation introduced in 2007, foreign earnings are not taxed. Capital-related income (for instance, earnings on real estate rented out ) are taxed at a rate of 12 percent. Capital gains tax is also levied in the event that you sell a property - again at a rate of 12 percent, on the spread between the purchase price and the sale price only.

The government derives significant income from a value added tax of 22 percent on goods and services. But the cost of living is already very low in Uruguay and this won't present a massive burden for most retirees.

Health Care

The public health care system in Uruguay provides free first aid assistance, including ambulance service. You need to pay for ongoing care. There is also a well-developed private health system.

You can obtain health insurance in two ways. As in other countries, you can take out a general health insurance that provides you with a range of alternatives in terms of hospitals and doctors. Otherwise you can become a member of a particular private hospital for a monthly fee, gaining access to a variety of its services.