Tax structuring of investments in Uruguay: individual, company or trust

Investors arriving in Uruguay to buy property, a business or a financial portfolio usually ask about tax rates first. But the final tax burden depends more on the vehicle used to hold the asset. The same rent or the same sale is taxed differently depending on whether the owner is an individual, a Uruguayan company or a trust, and on whether the investor is a tax resident.

This guide sets out the variables worth deciding before buying or incorporating anything. For the general framework for foreign investment, see investing and doing business in Uruguay.

Main guide: tax strategy with a legal approach, where we explain how we design and document investment structures that can withstand a DGI review.

The starting point: asset, residence and time horizon

Before comparing vehicles, three questions need answers:

• What kind of asset it is. Property or a portfolio produces capital income (IRPF or IRNR when an individual receives it). A business activity produces income subject to IRAE.
• Where the investor is tax resident. Residents pay IRPF; non-residents pay IRNR on Uruguayan-source income. Residence also determines whether foreign income is taxed.
• What the investor plans to do. Collecting income, reinvesting it, selling, or passing the asset to the next generation each point to different structures.

Investing directly as an individual

Direct ownership is the simplest route: there is no entity to maintain and no financial statements to file.

Current income: rent and interest

Rent from property located in Uruguay is income from real estate capital. Residents pay IRPF at the general 12% rate; non-residents pay IRNR at the same general rate. Interest on local deposits and debt securities has its own rates, from 0.5% to 12% depending on currency and term.

Selling the asset

When a property is sold, the gain is the difference between the price (never below the cadastral value set by Catastro) and the sum of the tax cost, indexed by the indexed unit (UI), and the transfer tax (ITP) borne by the seller. That gain is taxed at 12%. For non-rural property acquired before 1 July 2007, the law allows electing a deemed gain of 15% of the price. For other assets, when the cost cannot be proven, the taxable gain is 20% of the price.

Net wealth

Individuals pay Net Wealth Tax (Impuesto al Patrimonio) only if their taxable net wealth in Uruguay exceeds the tax-free threshold. A progressive scale applies, and the law has cut its rates over the years. There is one exception: for non-residents who do not pay IRNR, the rate cannot fall below 1.5%.

When it fits: rental property or financial portfolios, when simplicity matters. The downside is that the asset is held directly and becomes part of the individual’s estate in Uruguay.

Investing through an SA or SAS

A Uruguayan company is the natural vehicle for a business and a frequent choice for property. Corporations (sociedades anónimas) and simplified joint-stock companies (SAS) are IRAE taxpayers whatever their activity (Article 12, Title 4).

Two levels of tax

• Company level: 25% IRAE on net taxable income, meaning revenue less properly documented deductible expenses.
• Shareholder level: dividends paid by an IRAE taxpayer are taxed at 7% IRPF (resident shareholder) or IRNR (non-resident shareholder).

If all profit is distributed, the combined burden is about 30.25%: 25% IRAE plus 7% on the remaining 75%. Reinvesting defers the second level, but only up to a point. Taxed income that is neither distributed nor reinvested in certain assets for more than three fiscal years is treated as a deemed dividend and taxed anyway.

The company’s Net Wealth Tax

The company pays Net Wealth Tax at 1.5% on its taxable net wealth. It can offset the IRAE generated in the year against that tax, up to 50% of the Net Wealth Tax. In a company that only holds a property with low income, this tax can weigh more than expected.

When it fits

Operating businesses, reinvested profits, projects seeking Investment Law benefits, or investments with several partners. For rental property, the ongoing tax burden usually exceeds that of direct ownership.

The trust as a vehicle

The Uruguayan fideicomiso (Law 17,703) is used for real estate developments, guarantees and estate planning. For tax purposes the rule is clear: trusts, except guarantee trusts, are IRAE taxpayers (Article 18, Title 4). An administration or real estate trust is therefore taxed on its net income, in principle as an entity.

• Guarantee trust: transferring assets into it has no tax effect for Net Wealth Tax, and the settlor keeps reporting them as its own.
• Publicly offered financial trusts: participation certificates issued by public subscription and listed on an exchange carry their own IRPF and IRNR rates, like other securities.

A trust’s advantage is usually legal rather than tax-related: it ring-fences assets and sets their destination in advance. Its tax treatment depends on the contract and the beneficiaries. More detail in trusts in Uruguay.

Vehicle comparison

General treatment of Uruguayan-source income, excluding special regimes:

Item	Individual	SA / SAS	Trust (non-guarantee)
Tax on current income	IRPF (resident) or IRNR (non-resident): 12% general rate on rent	25% IRAE on net income	IRAE on net income
Distribution to the investor	Not applicable	Dividends: 7% IRPF or IRNR	Depends on the contract and beneficiaries: case by case
Sale of a property	12% on the actual gain (or deemed gain where applicable)	Part of income taxed under IRAE	Part of income taxed under IRAE
Net Wealth Tax	Progressive scale with tax-free threshold	1.5%, with partial IRAE offset	Taxpayer as an entity (except guarantee trusts)
Investment Law 16,906	No access (not an IRAE taxpayer)	Eligible with a promoted project	Case by case
Maintenance costs	Low	Accounting, financial statements and registrations	Trustee, accounting and registrations

The effect of tax residence and the tax holiday

On Uruguayan-source income, IRPF and IRNR rates are very similar: 12% general and 7% on dividends. The big difference is foreign income. Since 2011, residents have paid IRPF on foreign movable capital income (interest and dividends). Under Law 20,446, from 1 January 2026 foreign real estate income and foreign capital gains on movable and real estate assets are also taxed. The DGI enabled their filing on Form 1146.

For people who become tax resident from 2026, the same law created a new regime. They can elect, once, to pay IRNR (instead of IRPF) on foreign capital income for the year of the change and the following ten years. The election is no longer automatic. It requires not having been resident in the two previous fiscal years and meeting presence or investment requirements, such as property worth more than UI 12,500,000 or fund investments of at least UI 625,000 a year. When the period ends, the law provides for five years at half the rate or a fixed annual payment. Those who elected the previous regime by 31 December 2025 keep their rules. See the detail in Uruguay tax holiday.

Because the investment that qualifies for residence or the tax holiday must meet the statutory conditions, the vehicle and the residence plan should be designed together.

Investment Law 16,906 and COMAP benefits

Law 16,906 allows IRAE taxpayers that file an investment project and have it declared promoted by the Executive, after review by COMAP, to obtain tax benefits. These include a partial IRAE exemption linked to the investment and Net Wealth Tax benefits on certain fixed assets. Because beneficiaries are IRAE taxpayers, an individual investing directly, outside a business activity, generally has no access to this regime.

For a productive project, this can tip the balance towards a company. See requirements and scope in benefits for investment projects in Uruguay.

Tax treaties, foreign entities and substance

Treaty network

Uruguay has double taxation treaties with a number of countries. They can reduce withholding on dividends or interest and set out which country taxes each type of income. See the list and how they apply in Uruguay’s double taxation treaties.

Companies in low or no-tax jurisdictions

Holding a Uruguayan asset through an entity based in a low or no-tax jurisdiction is usually penalised. Income from Uruguayan property earned by such entities pays a 5.25% surcharge on top of the general rate. Their Net Wealth Tax rate is 3%. And the sale of interests in those entities counts as Uruguayan-source income when more than 50% of their assets are in Uruguay.

Substance and anti-abuse rules

A structure with no real activity and no purpose beyond saving tax is exposed: the DGI can disregard legal forms that do not reflect economic reality. In addition, since 2023 certain foreign passive income of entities in multinational groups has been subject to IRAE (Law 20,095). Then there is beneficial ownership reporting to the Central Bank (BCU) under Law 19,484, and the CRS exchange reported by the DGI. A well-built structure must be explainable to a bank or a tax authority.

How to choose the structure

1. Type of income: passive income usually pays less in the hands of an individual; a business calls for a company.
2. Use of profits: reinvesting defers the second level of tax (within the deemed-dividend limit).
3. Current and future tax residence: determines IRPF or IRNR and the treatment of foreign income.
4. Home country: its controlled foreign company rules can cancel out the advantage sought in Uruguay.
5. Exit and succession: selling shares is not taxed like selling the property, and the form of ownership changes the succession process.
6. Maintenance costs: for small investments, accounting, registrations and trustee fees can absorb the tax advantage.

Where there are assets in several countries, the Uruguayan structure is part of a broader plan: see international tax planning.

Frequently asked questions

Tax structuring of investments with GlobalTax

At GlobalTax we look at the asset, the investor’s residence and home country to propose a vehicle backed by compared figures and the documentation the structure needs. More information on our tax strategy with a legal approach page.