Yamandú Orsi of the centre left Frente Amplio has won Uruguay’s runoff and takes office on March 1, 2025. A look at what the result means for taxes, the tax holiday and the country’s reputation for stability.
Uruguay has chosen a new president. In the runoff held on Sunday, November 24, 2024, Yamandú Orsi of the Frente Amplio (Broad Front), a coalition of centre left parties, won about 49.8% of the votes cast against 45.9% for Álvaro Delgado of the National Party, the main party in the outgoing centre right government. Blank and spoiled ballots make up the rest. Mr Delgado conceded before the count was complete, and outgoing President Luis Lacalle Pou, who could not run again because Uruguay does not allow consecutive terms, congratulated the winner and offered to begin the handover.
Mr Orsi, 57, is a former history teacher who served two terms as mayor of Canelones, the department next to Montevideo. He and his running mate, Carolina Cosse, take office on March 1, 2025.
For people who live in Uruguay or are thinking of moving, the most important feature of the election may be how ordinary it was. Turnout was close to 90% of 2.7 million registered voters, voting is compulsory, the loser conceded on the night and the transfer of power is set out in the constitution. The Frente Amplio governed from 2005 to 2020 under Tabaré Vázquez and José Mujica, so this is a return of a familiar party rather than a leap into the unknown.
Moody’s, one of the main credit rating agencies, rates Uruguay Baa1 with a stable outlook, which is investment grade. After the first round on October 27 it said the results signalled “policy continuity, a credit positive” and that it expected the country’s institutions to keep policy predictable.
Power will also be shared. In October the Frente Amplio won a majority in the Senate, 16 of 30 seats, but fell short of a majority in the Chamber of Deputies, so major legislation will need support from at least some opposition members.
In the final televised debate on November 17, Mr Orsi said twice that he would not raise taxes. The Frente Amplio’s programme does not promise either higher or lower tax rates; Ms Cosse told reporters the next day that it would have been irresponsible to commit either way in a party programme. The campaign’s focus was on growth, higher wages, early childhood support and security, with tax incentives proposed to encourage investment.
In September Mr Orsi named the economist Gabriel Oddone as his intended minister of economy and finance. Mr Oddone had argued during the campaign that promising never to raise taxes would be unwise. The detailed economic plan will come later, with the new government’s five year budget.
A second result from October also matters for investors. Voters rejected a constitutional proposal that would have lowered the retirement age and moved about US$23 billion of private pension savings into a state trust. Nearly 40% backed it, so the issue has not gone away, but Moody’s described its rejection as a favourable outcome for the public accounts.
Many foreign residents will want to know about the tax holiday. Under current law, people who become tax resident in Uruguay can choose not to pay Uruguayan tax on foreign dividends and interest for the year they arrive and the following ten years, or instead pay a reduced 7% rate on that income with no time limit. Tax residency can come from spending more than 183 days a year in Uruguay or, among other routes, from buying property worth more than 3.5 million UI (Unidades Indexadas, an inflation linked accounting unit, roughly half a million US dollars today) and spending at least 60 days a year there.
Neither candidate made the holiday a central issue, and nothing about it changes with the result. Any change would need a law passed by parliament, and no proposal has been announced.
Residency itself is not a campaign topic. Uruguay grants permanent residence to people with stable income from abroad, without an investment, and offers naturalisation after three years for families and five for single applicants who genuinely live there. A change of government does not alter that.
For tax planning, the sensible approach is to rely on the rules in force when you become resident, keep good records of the date you qualify, and watch the 2025 budget debate for any changes to incentives. We help clients apply for residency, and the licensed accountants and lawyers in our local team in Uruguay advise on the tax side.
This article is general information, not legal, tax or investment advice.
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