(II) Real Estate Investment in Punta del Este – URUGUAY
15 September, 2011 No Comments
Uruguay is a tourist destination where people who went once, usually like to repeat. This makes a positive effect on the return of any real estate investment, especially of vacation properties.
Uruguay finds itself in a full expansion that has allowed, after a period of growth, to achieve economic stability. It focuses on low public spending policies, competitive tax rates, in addition to an improved tax collection, and a relatively open trade regime.
Besides the economic stability and the country’s strong legal system, the Uruguayan government has an open attitude towards foreign direct investment (FDI), by eliminating unnecessary paperwork such as previous registrations and authorizations, as well as restrictions that discriminate against local or foreign investors. This allows foreign capital to have no restrains in case they desired to participate in local companies. The legal and mercantile procedures to establish a corporation in Uruguay are simple, and the initial capital invested can benefit from tax exemptions, or VAT.
Punta del Este is emerging as one of the best business opportunities in the country. It is the most attractive real estate investment due to its location, like a “VIP real estate destination”. Despite Montevideo, Punta del Este has registered the highest number of transactions of second hand/vacation homes, whose main buyers come from Brazil, Argentina, United States or Europe, with an increasing number of Uruguayans as their society gains purchasing power.
This part of the country offers virgin landscapes, combines nature and a very well designed modern city, with its commercial and residential neighborhoods while respecting the area’s coastline natural beauty, which enables you to enjoy countless “first line views to the beach”, adding value to the property. Usually, properties acquired in Punta del Este are occupied most of the time, fostered by a climate that has an average temperature of 30 º C in January, which compared to Barcelona or Madrid, is “a bit warmer”.
As a relevant fact, I would like to highlight some investment figures that attempt to develop different markets with less conventional structures. They base their functioning in ways that are more secure in contrast to the potential risks, promoting a more efficient development:
* Building Trust at cost, which would be associated to the market of residential housing.
* Condo Hotels, associated to the development of second homes in tourist areas and for selling purposes.
In a future post I will make a deep analysis of these figures that are increasingly becoming more powerful in this housing market.
