Pandemic, taxes lure Argentines to stable neighbor Uruguay

BUENOS AIRES/MONTEVIDEO, Nov 2 (Reuters) - Máximo Andrieu, 69, is getting ready to turn his back on Argentina and start a new life in neighboring Uruguay, long a bastion of laid-back stability that is luring Argentines tired of political upheaval and economic turmoil.

That attraction has been burnished this year. Uruguay has reported around 879 coronavirus infections per 1 million people, one of the lowest levels in Latin America, according to a Reuters tally. Argentina, by contrast, has recorded over 25,000 cases per 1 million people, and has also been battered by economic, debt and currency crises.

Andrieu, who runs his own business, has been worried about rising taxes as Argentina’s Peronist government looks to cover a deep fiscal shortfall, with the government proposing a ‘wealth tax’ and increasingly strict currency controls.

“Argentina has a long history of institutional failures and an aimless direction. So I see less and less future,” said Andrieu, adding that Uruguay offered “stability and quality of life.”

Detailed migration figures were unavailable but at least 2,000 Argentines - a higher level than usual - have requested fiscal residence in Uruguay in recent months, Uruguayan senator Jorge Gandini, from the ruling National Party, told Reuters.

The trend represents a challenge for Argentina. On the one hand, it needs desperately to raise funds. But it also wants to avoid a ‘brain drain’ of talent and entrepreneurs out of the country - the kind of people it needs to help spur a growth revival.

Uruguay, under new center-right President Luis Lacalle Pou, has looked to attract those same people. Argentina’s smaller neighbor, with a population of just 3.5 million, already has one of the highest levels of gross domestic product per capita in the region.

The Uruguayan government this year relaxed requirements for residency, lowering the amount of investment needed in real estate from $1.6 million to just over $328,000. In addition, it offers a 10-year ‘tax holiday’ for foreigners.

“What we are looking for here is for them to come and stay to spend, invest, and eventually attract their companies,” Gandini said.


Martín Caranta, a tax specialist and partner at Lisicki Litvin in Buenos Aires, said that moves to raise taxes in Argentina had created greater pressure on the middle class.

“A lot of people got tired of that pressure and decided to go elsewhere,” he said.

Since a sharp market crash last year, he said the number of enquiries he had received from people looking to reduce their tax burden and asking about possible moves to Uruguay had jumped, accelerating further during the pandemic.

Argentina has been mired in its latest economic crisis since mid-2018, when former center-right President Mauricio Macri was in charge. That crisis led to a sovereign default earlier this year, followed by a huge debt restructuring.

President Alberto Fernández, a center-left Peronist who took office last December, has tightened capital controls amid tumbling foreign currency reserves, with a huge gap between the official peso-dollar rate and the black market.

Camila Ginevra, a 27-year-old interior designer, has had enough. She temporarily settled in Uruguayan resort city Punta del Este to pass the pandemic - but said she has decided to move permanently.

“I choose to live here with my projects,” Ginevra said, citing “opportunities” and a good life. “I’m planning to stay here for the long term.”

Reporting by Marina Lammertyn in Buenos Aires and Fabian Werner in Montevideo; Editing by Adam Jourdan and Rosalba O’Brien