In recent years, there has been a jump in the number of applications for temporary and permanent residency in Uruguay by Argentine citizens. This situation reached its peak in 2021, when in the Argentina Several sanitary limitations were still in force due to the Covid-19 pandemic.
According to estimates of the Maldonado City Hall, more than 10% of the inhabitants of the department would be Argentines. However, not all those who start procedures of this type do so with the purpose of residing in the country.
Both sister countries share similar customs and behavior patterns in matters of personal finance. The bi-monetary economy present in both nations, and a history of galloping inflation, have undermined the prestige of domestic currencies compared to the reliability offered by the dollar.
Although this reality becomes more evident in the current economic context of Argentina, Inflation in Uruguay is not an unimportant matterand increased by 0.75% during the month of April to reach 7.6% year-on-yearabove the target range established by the Central Bank of Uruguay (BCU), between 3% and 6%.
in dialogue with scope.com, diego rodriguezmanaging partner of Gaston Bengochea & Cia.assured that Argentines who have investment accounts in Uruguay “do not have a particular bias” that characterizes thembut what they mostly seek is to be able to access to invest in international platforms that do not present “any restriction”.
The Argentine usually establishes diversified portfolios with global exposureand Rodríguez points out that the same “do not differ from those of international investors“, looking for returns in dollars from investment funds, fixed income and variable income instruments, or other more alternative options.
alan babicfinancial advisor of balance in Uruguay, explained to scope.com now a days, The instruments most in demand by Argentine clients are “US treasury notes with an annual return close to 5%, and with a short maturity of between 6 months and one year“, this being “a safe investment, since it is investing directly in debt from the treasury of USA“.
Among the more moderate clients, “the most demanded option is to invest in mutual funds and ETFs (exchange-traded funds that passively track stock indices such as the S&P 500)”, which allow investing in variable income looking for a higher profit, “but without neglecting the diversification that these instruments promote”.
Rodríguez, affirms that, instead, the accounts of Argentine residents that are already established for some time in Uruguay, “because of his need to live in the country” may present some options of instruments of the domestic financial system to hedge against inflation.
these accounts “resemble those of Uruguayans” and differ from those of “the last litter” of Argentine investors in the country, who are only looking for a financial intermediary to operate without restrictions abroad and who “have no particular interest in domestic titles“, says Rodriguez.
Among those who do plan their lives in the country, the options in pesos or Indexed Units (UI) may represent an alternative outside of the dollar, taking into account that as a result of the appreciation of the Uruguayan peso against the US currency in recent times, they generated a good return.
75% of real estate investments in Maldonado are from Argentines
In another order, one of the most classic options continues to be the bet on the purchase of real estate, looking for a revaluation, or a future income. The Municipality of Maldonado estimates that 75% of real estate investments in the department are Argentineapproximately $4.5 billion of Argentine capital invested in Fernandina lands only between the years 2017 and 2022.
In an analysis of the real estate situation in the region, Fabian Kopelco-founder and CEO of Kopel Sanchezheld that “nowadays it is very profitable to buy a property in Uruguay, since the prices in dollars still did not rise as they should have risen“leaving”a return of around 6 to 7%“, since “since it is a placement in dollars, and the income is in pesos at the time of renting, the exchange rate becomes very high.”