Your Money

As in many South and Latin American countries the banking sector in Uruguay has had a less than totally successful history. The Central Bank of Uruguay was created in 1967 to control the money supply, regulate credit, issue currency, control foreign exchange and generally supervise the private banks. The Bank of Uruguay, Banco de la República Oriental del Uruguay - BROU, founded in 1896, performed some of these functions until 1967. The total banking part of the economy includes a number of government owned specialist agencies for mortgages, insurance, commercial banking and social welfare in addition to private commercial and savings banks.

Details of the privacy available from the Uruguayan banking system is fully detailed in the bankitoffshore.com web site. These arrangements are no longer available so far as Argentina is concerned but this may well be to the advantage current expatriates and prospective immigrants. This is explained in the article in the above link and in this one by the same author. Argentinians are hoping that the funds that they withdraw from Uruguay to keep in their own country and elsewhere will not be subject to the raids on private security boxes carried out in London in 2009.

It was Argentinian financial measures which prevented their residents from accessing foreign reserves that created the last crisis in banking circles in Uruguay in 2002/3. Argentinians drew on their deposits in Uruguayan banks to compensate for their own government’s restrictions. Uruguayan banks suffered an immediate deficiency of deposits. The difficulties were eventually contained by resolute government action in Uruguay although one bank was closed and three were restructured with government intervention. This situation was contained but it did require some international debt rescheduling. The Uruguayan banks were technically insolvent. The relatively small number of creditors and their overall confidence in the Uruguayan government’s ability to resolve the situation made the solution to the difficulties possible. This contrasts with recent situations in Greece and Cyprus. An IMF report confirms the success and recovery of the banking sector in Uruguay and will give new and intending residents confidence.

There are regulations for businesses so far as capital and investments are concerned but there are generally no exchange controls on the movement of foreign funds or Uruguayan Pesos. This fact is also comforting for intending residents. Income tax is charged only on earnings derived from within the country. There are some fine points of difference between residents and non-residents which should not affect the average retiree.

None of the above confirmation of the security of the banking system and general financial arrangements and the demonstrated willingness of the government to maintain confidence in the country should deter prospective immigrants from making their own arrangements to secure their own financial arrangements both within their new place of residence and outside it. Risk should always be spread as a safeguard against unforeseen circumstances.

It is not difficult to open a bank account in Uruguay as a resident or non-resident. It may be useful to employ a lawyer to assist in the process if Spanish is not one’s first language. There are plenty of guides about opening a bank account some of which also give information about lawyers’ fees for this service. The best course for retirees is to obtain from their home bank details of corresponding banks in Uruguay but also not to rely on local banks totally. An offshore bank account is vitally necessary for this purpose. For day to day convenience it is useful to know where to find local ATMs and how they operate. In Uruguay these machines are separate business entities and are not all bank owned. A list of banks that operate in Uruguay is given here and it is easy to see which are likely to use the English language from the first list and the second list also provides details of banks which have closed. This last information is useful in case your home bank still has such a bank listed as its correspondent in Uruguay. This will demonstrate that it has little if any dealings with Uruguay. A bank reference will still be useful provided it is addressed simply to “To Whom it May Concern”. Experiences in Uruguay seem to vary with respect to dealing with banks and how to cope with them also varies. The author of "Passport to International Profit" has little confidence in the Ecuadorian banking system since losing money in 1999. His “Six Point Command Posture” for financial safety and security is applicable to any country. This reinforces the point that flexibility is vital and that all eggs should never be in one basket.

Obviously this aspect of Uruguayan life should be fully investigated both before leaving for and while on a “Golden Rule” (visit before re-settling) trip to the country. It will still always be useful to have an offshore account at a bank with which business has been satisfactorily done previously, preferably over a long period. No more than the required minimum should be moved to the new country. At all times the risk, changing values and exchange rates should be spread over a number of countries. This minimizes possible losses owing to changing political and economic conditions. Details of the cost of living should determine the amount of funds which should be transferred both initially and subsequently on a periodic basis. Obviously a check can be continuously kept on changes in expenses whilst living in the country.

The links at the "resources" tab of this site will provide information on this subject as does the book "How to Retire in Uruguay" by Les Johns which is available from this site.


It is likely that a pension or pensions will form the basis of the income requirements for retired persons. Proof that such income is assured or arrangements to have it paid to an Uruguayan bank will depend upon the organisations or countries responsible for paying the pension(s). The same comments are relevant here as were mentioned in the corresponding section for Australia. Some of the comments in the following Australian section on "other Income" are also relevant to Uruguay.

There are other points to consider with respect to British and Australian Government pensions. One vital point that has to be mentioned with regard to the British old age pension so far as Uruguay is concerned is that it will be frozen if you retire to Uruguay. It will be frozen at the rate being paid on the date of the move to Uruguay. A number of countries are in the same situation. If this matter can be corrected then all British pensioners would receive the increases that accrue from time to time for British residents, those living in the thirty countries of the European Union and Switzerland and fourteen countries with which the United Kingdom has reciprocal agreements.

An additional problem for those moving from Australia is that there will have to be references to or contacts with CentreLink. This is a very diffuse organization with offices all over the country which deals with all matters of social security payments including the payment of age pensions. It is present in even very small towns and has multiple offices in the capital cities of Australia. Many of the rural or outback offices find it difficult to deal with the more complex matters. If you have a share portfolio it is unlikely that local staff will know how to cope with that in relation to your pension claim or subsequently with respect to deeming regulations. (Deeming is the process by which the government assigns an interest rate to financial holdings regardless of the rate which is in fact earned for use in assessing the income of pensioners. The income earned by a pensioner can affect the rate of pension paid.) If you happen to live in a small town with a predominantly aboriginal population it is likely that few will own shares. Local CentreLink staff will gain little experience in handling such matters.

The larger administrative hubs of CentreLink are also spread across the capital cities. There is a problem of co-ordination among this widely spread concern because certain offices "specialize" in particular aspects of its responsibilities. It is very easy for one person to be dealing with multiple offices none of which is always fully aware of the pensioner's overall situation. This should not be the case given the degree of computerization in the department but it is a fact. Because of this it is difficult to get a complete answer to any question.

The Hobart, Tasmania office deals with "international" matters and one can learn from there that an Australian age pension can be paid almost anywhere in the world. What is not always volunteered is the fact that international payments are made on a four week cycle rather than the two week period that is normal in Australia. Also not commonly offered is that a pension will not be paid to an overseas bank unless the recipient states clearly and in writing that the intention is to reside overseas for at least a year.This can easily result in a pensioner, having moved abroad, finding that even though, apparently, all necessary forms and formalities have been completed no payments are forthcoming. Given also that the department's toll free overseas telephone numbers do not always work it easy to see that a person can become frustrated, angry and financially embarrassed. Co-ordinated Australian Government and CentreLink internet sites are improving and this is probably the best way to keep in touch with matters relevant to Australia pensions.

The British Pension Service, part of the Department for Works and Pensions, is, compared with the Australian CentreLink, easy to deal with by telephone or by letter. There is a reluctance to deal with or comment upon anything of a confidential nature over the telephone and this even more the case when e-mail communication is used. The Department's web site is not easy to follow but in writing, by letter, communication is concise and accurate. There is no hesitation in providing information, all forms that may need to be completed and any explanatory publications, booklets or pamphlets that may be available.

An important point to consider is whether or not to have your pension paid directly to the country in which you have chosen to retire. As has been mentioned earlier countries can change. It would not be a good outcome to have to leave your "paradise" and leave your money in it. There are ways to mitigate this potential problem although, for the moment, this is not a difficulty that arises in Uruguay because of the lack of exchange controls on personal capital movements but caution is necessary with respect to inter-bank communications and fees. Recent events in Greece and especially in Cyprus are indicative of what can happen. In the case of Cyprus the British government was quick to stop payments of British pensions to Cypriot banks thus limiting recipients’ losses.

Other Income

As a retiree it is unlikely that local income will be derived by you but this is permissible in Uruguay. Once an application for permanent residency has been made and a cedula de identidad obtained it is legal to seek employment. This subject would seem to be a point to be investigated during a “Golden Rule” visit to Uruguay.

As an addition to the information on banks and banking an organization for non-US citizens or residents is the Euro Pacific Bank of which the C.E.O. is Peter Schiff. This could be an interesting place for holding funds outside of Uruguay just on the basis of "spreading the risk" even though Uruguay seems to be a safe place.

An interesting development in dealing internationally with funds is the currently expanding use of digital currency. Details of this system which eliminates banks and governments from the transfer of funds can be found at >this site or for practical information here or as a graphic demonstration of this monetary phenomenon go to this "you tube" video. Although interesting the use of Bitcoin may not yet be a practical solution to financial difficulties likely to be encountered by retirees.

All of these points are considered in the links provided in the "Resources" tab of this site and in the book "How to Retire in Uruguay" by Les Johns which can be bought directly from this site.