segunda-feira, 25 de novembro de 2013

Getting money into your Brazilian company - a few common problems

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I have spent the last week struggling with Brazilian banks in order to get ahold of some investments/loans that my clients wired from abroad.

I often receive complaints from the readers, saying that "Brazilian banks have retained their money", or that "It is impossible to get money into Brazil".  More than one have asked me what would be the penalty for bringing the money in a bag (or in a car). They always ask about this last one in a theoretical way, but I sometimes sense that it has gotten way over platonic contemplation.

I know my way around the system, for sure. But, even for me, this kind of operation is always stressful. Everybody in the firms gets double coffee on money week.

The path, in theory, is not so difficult. Basically:

1)  The parent company wires the money to Brazil (don't forget to use IBAN), either as investment in capital, or as a loan;

2) The Brazilian company produces the documents that will support the operation. It usually an alteration in the articles of association, in case of increase of equity, or a loan agreement;

3) The Brazilian company registers the investment or loan before the Brazilian central bank, electronically;

4) The Brazilian company sends the relevant documents + Central Bank records to the Bank;

5) The Bank and the client will negotiate the exchange rate and finish the foreign exchange agreement.

Clear and simple. Except that is is not.

Common problems are:

1) Most of bank managers, specially in the branches specialized in small and medium companies (which are the majority) lack training in FX. The amount of misguided advice or just plain wrong information that by clients received is astonishing;

2) Registration with the Brazilian Central Bank demands a login and password, that should have had been requested weeks before the transference actually takes place. Obtaining them in a hurry is very difficult.

3) The procedures are not fully standardized. Some banks will accept agreements in English. Others will accept documents that are bilingual. And sometimes one manager or the other will request that all documents be dully notarized in the country of origin, then legalized and the Brazilian consulate abroad and, finally, translated by a sworn translator in Brazil!  Sometimes, different branches of the same bank will adopt different approaches.  (In case they go to extremes like requesting embassy stamps, I'm likely to intervene).

4) International loan agreements are regulated in Brazil. The interest rate must follow some parameters, for example. The banks usually do not inform the client about it, but not fulfilling the legal conditions might generate problems when the operation is being registered at the Central Bank.

5) Some banks will require any changes in the articles to be dully filled, before the exchange is completed. Filing alterations my take up to 3 weeks, depending on the case.

6) The money sometimes disapear for a few days! It is common to experience a delay between sending the money from abroad and obtaining the notification, in Brazil, that the wire has arrived. One or two days is OK. But one or two weeks are not unheard of.

Did you have any problems sending money to Brazil?

You may also want to read:

International Bank Account Number (IBAN) - Sending money to Brazil

Incorporating a Brazilian company, step by step

3 comentários:

  1. yes, a was a nightmare. There are a lot of rules and variables. The taxes may also vary depending on your type of service, and all described points where experienced.
    The best solution was to use an specialized Exchange Bank (no the regular ones). They are smaller and have a good know how.

  2. Dear Adler and all members, it is indeed a hard time to close the foreign exchange and credit the money. Sometimes, the hardest part is to open the bank account. Anyway, here are some tips to avoid being so much upset:

    1. Get to know the right person in the right bank: access to the people who actually deal with the transaction is the key to close operations within a reasonable time and will give you the actual instructions as how to proceed; choosing a bank with knowledge of the subject is also important. Usually, the acount manager is so busy with other peoples matters that they will not give you the required attention or did not receive proper training to deal with foreign exchange.

    Note that an international bank in most cases does not deliver what we first expect: they are different companies under common control - the communication between them is not as fast or efficient as expected and the fact of being client abroad will not really help with the Brazilian operation.

    2. Nominate the operation correctly: if the wire transfer refers to pay in share capital, the wire must contain that specific instruction, as well as for loans, otherwise, will be denied;

    3. Have all documents at hand to iustify the transaction - the loan agreement, the corporate resolution or amendment.

    Above all, we all know it is a very bureaucratic procedure and a lot of patience is required. Trying to anticipate whatever possible and planning ahead will,certainly help.


Do you have any doubts or suggestions? Leave your message (the comments shall not be considered as legal advice)