Stealing this one from Lawrence here:
- US Citizens have to pay income tax (or at least file) no matter where they are in the world, even if they’ve never lived in the US
- Foreign ex-pats not living in the US (e.g. a Brit in South America) usually don’t pay anything to Britain if they’re paying to whatever country they’re in
This individual found a loophole because Uruguay specifically allows a tax resident (not actual resident) to pay nothing on foreign income from a company based in Uruguay.
Requirements for Uruguay tax residency include:
- Presence in the Uruguayan territory for a minimum of 60 days in a calendar year.
- Investment in properties for a value greater than UI 3,500,000 (approximately US$370,000)
- Direct or indirect participation in a company with a value greater than UI 15,000,000 (approximately US$1,585,000) made, and that generates at least 15 new full-time jobs.
So your average upper-middle class person isn’t going to waltz into Uruguay. But for the moderately wealthy non-American who wants to be a silent partner in an Uruguay business, the tax benefits alone could potentially make it worth it.