Weekly Number of Argentines Applying for Residence in Uruguay Rises to 150

RIO DE JANEIRO, BRAZIL – The average weekly number of Argentine citizens applying for residency in Uruguay stood at 150, an all-time record, according to sources in the Ministry of the Interior of the Montevideo government to local media.

The increase comes after Uruguayan President Luis Lacalle Pou implemented measures to favor investment and fiscal residence in the small country, while the coronavirus pandemic exacerbates neighboring Argentina’s troubles: a deep recession since 2018 with 40.9% of its people living below the poverty line.

Although detailed migration figures are not available, Uruguayan Senator Jorge Gandini of the ruling National Party told Reuters that at least 2,000 Argentines have applied for tax residency in Uruguay in recent months.

Since the Uruguayan government closed the country’s borders on March 24th, 25,953 citizens have crossed from the neighboring country, almost half of the total number of foreigners who entered Uruguay in eight months of the pandemic.

Among the reasons for the exodus, experts mention the increasingly strict foreign exchange controls adopted by the Peronist government of Alberto Fernández and the bill for a tax on large fortunes, which has just been passed in the Chamber of Deputies and is now pending a vote in the Senate, with which the Argentine government seeks to raise funds for the fight against the pandemic and for economic recovery.

Martin Caranta, a tax specialist and partner of Lisicki Litvin in Buenos Aires, told Reuters that measures to raise taxes in Argentina have created more pressure on the middle class. “Many people got tired of that pressure and decided to go elsewhere,” he said.

In contrast, Lacalle Pou introduced tax benefits to attract investment and relaxed residency requirements, lowering the amount of investment required in real estate from US$1.6 million to just over US$328,000. In addition, he offered a ten-year “tax moratorium” to foreigners.

The trend is challenging for Argentina. On the one hand, the country desperately needs to raise funds, but it also wants to prevent a “brain drain” and an entrepreneurial flight from the country, the human capital it needs to help drive an economic rebound.

The exodus was also influenced by Uruguay’s different approach to fighting the coronavirus, which is more respectful of individual freedom and responsibility compared to its neighbor, where a strict eight-month quarantine was imposed.

Health results were also conflicting: Uruguay, a country of 3.5 million inhabitants, recorded fewer than five thousand positive cases since the start of the pandemic and fewer than a hundred deaths – although in the past few weeks its numbers have increased – , while Argentina has 1.3 million infections and 37,000 deaths.

Source: infobae