Unlike the situation in Europe and USA, Uruguay is immersed in a real-estate boom because of the investors´ great demand, especially European ones. There are different reasons that justify it: the change of favorable currency, juridical safety, a country with democracy consolidated with political stability and of the policies that always have favored the investments, the climatic virtues and the inverse stations with Europe (winter-simmer). Nowadays, all these reasons took even more force because of the financial crisis which has affected a lot the real-estate sector. However, Uruguay did not suffer the impact of the crisis in the same way as Europe, due to the fact that in Uruguay almost do not exist financial products related to the real-estate sector. The investors have different ways to finance the projects, even if there is no bank participation.
Off plan properties
The real-estate project is identified in order to know where the investment is going to be done, for example a project of floors construction, offices and the builder behind the project has to be identified as well. Concerning the builder, Cenyt Mercosur recommends to make research from the record of the previous works done by the same builder. This type of investment is formalized across a buying and selling coupon where the construction company sells the unit or units. The investor delivers an anticipation of 30 % and then he contributes with monthly payments, although he can do it by cash. When the payment is done, the correspondent property documents are signed or the buying and selling coupon is transferred to a third interested client. If the investor keeps the property, he has the advantage since he paid less, but if he decides to sell it, he will have a profitability in dollars bigger than in any other kind of deals.
Funding for
the sale
Especially in deals of second hand, the seller uses to offer the possibility of funding. This is to say that the seller has the possibility of postpone part of the total payment (usually less than 50 %), for one or two years, unlike the way to do and understand this in Europe. Usually it is agreed to an interest which coincides with the market interest, and carries certain modifications in the normal process of the dealing formalization, since the debt has to be registered, with the denomination of "mortgage", and the adjournment of the possession or the property usually will not be done until the hole debt is satisfied.
Trust to the cost
Another formula, probably less frequent, consists of buying to the cost, which involves to support, during the work course, the amount which covers the land value plus the construction costs, in order to enjoy a final product which – it depends on every buyer - will be able or not to join a group that commercializes the units all together, to achieve the best profitability. In a current real-estate investment, the project associates would purchase the land and obtain then the funds to construct, and would do it by commercializing the units according to the way the market use them up and depending on theirs own financial requirements. The sale price would be the sum of: land cost, architecture, engineering and administration honoraries, direct and indirect costs of the construction, operative costs and utility of the developer.
Duty-free zones
Uruguay has created free zones of any type of tax in several points of the country. These zones of special economy enjoy customs and fiscal exceptions, besides being excluded from the jurisdiction of the state monopolies. This makes them different from the majority of duty-free zones of the world, where in general, only the customs benefits are contemplated and some fiscal exemptions of limited character. In addition, some of these areas are of private property and others belong to the Government. There also exist cases in which they belong to the Government, but they are managed by private companies. The future WTC Free Zone in Montevideo downtown deserves special mention and appears as business opportunity since it is considered for the new world trend for services. This future duty-free zone of services will have an intelligent building and the necessary infrastructure in terms of communications and safety, as well as an architectural design of the first level that includes heliport. Please, contact Cenyt Mercosurif you are interested in having more information about this Project.
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