Uruguay As A Regional Financial Center
The country’s banking system is characterized by the following traits:
- Lack of exchange controls
- Easy transferring of funds
- Profit remittance limits
- Strict laws subjecting everyone to banking secrecy
- Easy process for foreign nationals to obtain or open banking accounts in the country
The financial system of Uruguay relies heavily on banks, offshore banks, financial houses, and representative offices of foreign banks.
All of the above-mentioned institutions, however, require authorization and permission from Uruguay’s Central Bank to operate within the country.
Multinational companies and individuals take advantage of the many facilities and loopholes present in Uruguay’s banking system.
Over the past decades the country has managed to establish itself as an important center for trade and banking in Latin America.
For several years the country has served as a base and platform from which important financial transactions between various countries in the region like Brazil and Argentina have taken place.
The following list comprises of some important banks that operate in Uruguay:
- Banco Santander, S.A.
- HSBC Bank (Uruguay), S.A.
- Citibank N.A. Sucursal Uruguay
- Lloyds TSB Bank plc
- Government owned institutions
- Banco del Hipotecario del Uruguay
- Financial Houses
- Bapro Uruguay
Banking in Uruguay is easier compared to that in other Latin American countries.
What Do You Need To Open A Bank Account In Uruguay?
Foreign nationals can usually open a bank account in any bank in the span of one day; the general requirements for this are an identity card, the provision of a local address, and in some case a local introduction and reference letter.
But just because it’s easy to open an account doesn’t mean you sacrifice your privacy.
Banks in Uruguay are subjected to some of the tightest banking secrecy laws.
These laws forbid the banks to share any information about the account holder with any third party, including the government of the country.
However, they may be permitted to disclose certain information under only two circumstances. Firstly, if the Family Court issues orders to assess an alimony case.
Secondly, if the Criminal Court requests so, granted they have sufficient evidence to back their plea.
Also, thanks to the US’s relatively new FATCA legislation, many banks in Uruguay are compelled to report your new account to the IRS if you’re an American.
So while Uruguayan banks are not as private as they used to be, they still maintain more privacy than many of their South American and Central American counterparts.
Advantages of Banking in Uruguay
Uruguay offers a myriad of advantages to the offshore or foreign resident. Thus it has earned a reputation for being the Switzerland of the South Americas.
There is a natural and almost unhindered process of the transaction of funds, which makes banking in Uruguay ideal for most people.
Funds can enter the country freely, and no withholding tax is charged on them. Funds leave the country as easily too. There are no waiting periods or permits needed to transfer money out of the country.
In addition to this, one does not face currency risk, since the money is rarely changed into the local currency. Dollars and Euros stay as they are.
In fact, more than three-quarters of the money kept in Uruguayan banks is still in dollars.
You also don’t need to be a citizen or to be physically present to own property in the country or to invest or transfer funds in and out of the country.
Assets in Uruguay can be owned by anyone including foreign nationals. This comes with no hidden cost or disadvantage.
Uruguay and it’s banking laws are extremely flexible for nationals, but even more flexible for foreign residents.
It’s very simple to show up at many banks with only your identification and leave with a bank account in Uruguay.
New Bank Fee
If you are planning to do any cash transactions in Uruguay, take note of a recent change that has raised a few eyebrows. Banco República de Uruguay informed its customers that as of Aug. 27, 2016, that a handling fee applies to certain transactions. Cash deposits and withdrawals exceeding US$10,000, 10,000 euros, or 350,000 Uruguayan pesos are subject to a fee that works out to be two-thousandths of the total transaction. That means if a deposit of US$20,000 is made in cash, the bank will debit a US$40 handling from the account receiving the funds.
Checks being cashed that go over the same limit for the three currencies will also have this commission applied. The bank also specified that this is per transaction and will be debited automatically from bank accounts at the time of processing.