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Transfer of Funds to Brazil for Property and Land Purchases

Todays Date: December 17, 2018

The Banco Central do Brasil is the Government body that oversees and regulates all international money transfers in and out of Brazil. The rules and legislation which must be followed with regard to international transfers are initially complex, but provide real security for investors and purchasers.

When sending funds to Brazil for the purchase of your property it is essential that the funds are sent directly from your own bank account to the sellers bank account.

Although technically you are sending directly to the sellers account, all international transfers are via the Banco Central do Brasil and the funds that you have sent will be held in a holding exchange account.

The seller must produce the sales contract that you have signed in order access the funds and exchange the money from the currency that you have sent to the Brazilian Real.

The exchange rate can only be confirmed when the seller produces the sales contract, and therefore your bank will not be able to quote a rate at the time you instruct the transfer.

This means that in many cases there will be a shortfall or overpayment due to the exchange rate, and is the reason that most well drafted Brazilian purchase contracts allow a margin of +/-10% with regard to the amount sent.

This transfer system provides several benefits to the international purchaser. Not only does it ensure the your funds are registered correctly, thereby proving your investment into Brazil. It also proves that the money was earned outside Brazil and is therefore not subject to Brazilian income tax. Likewise, when you come to sell and want to return your funds to your home country, the system allows for you to transfer back the original purchase amount free of tax. However capital gains may still be payable on any profit made from the propertys sale.

In general there are no limitations to returning your funds from Brazil provided they were originally registered with the ‘Banco Central do Brasil’ at the time of your investment.

There are other types of transfer to Brazil via companies such as Western Union and others. By Law, these transfers cannot exceed R$10,000 per wire transfer.

On balance, transferring funds to Brazil is a straightforward process as long as you follow the procedures and regulations laid down by the Banco Central do Brasil. As these measures provide a central registration of your transfer and since the vendor must provide a valid sales contract in order to release the funds, the system provides excellent security for any funds you send for your Brazilian property purchase.

Eduardo Collins is a land investment consultant to Urban Land Brazil, his article on transferring funds to Brazil gives key facts for investors transferring funds to Brazil. He recommends you to visit Urban Land Brazil for more detail about investment opportunities in Brazil.

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