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A Common Question Answered: How to Make International Payments for Real Estate in Florida. We will address common concerns and provide clarity on how to smoothly navigate the financial aspects of buying property abroad.
The transfer of resources is simple!
Before we proceed, it is important that you know that the whole process is very simple. Even the manager of your bank can guide you. However, there are some aspects of the process that are fundamental for you to know.
Basically, you must make an international transfer to your bank account let’s say, in Brazil, to the account that represents the seller in Florida. Generally this account is not owned by the seller, but is an escrow account, where the amounts are temporarily deposited until the entire process is completed.
However, if you already have an account opened in your name with a bank in Florida, the process is usually simplified.
Opening an account with a bank in Florida is easy and fast and can be done remotely. There is no need to leave your country and be physically present at the bank branch in Florida.
There are several banks in Miami and Orlando that allow remote opening, which facilitates the process.
Why is it important to open a bank account in the US to transfer the funds?
As mentioned, it is not mandatory that you have an account abroad to send the amounts for the purchase of the property. Having an account, however, can speed up the process, since sending money from one account in your name to another account in your name (same ownership) is always easier.
In addition, before sending the money, it is essential that you have already talked to your broker in Florida about the most appropriate investment format, that is, who will buy the property: 1 – You (Individual Person) or 2 – A company (legal entity).
Buying as an individual or through a company?
There are many benefits of purchasing a property in Florida through a legal company. In the article Buying as an Individual or Legal Entity? we explain it in detail.
Basically, by buying through a company, you can avoid the applicability of the so-called Inheritance Tax. This tax in Florida, for foreigners, is about 40% of the value of the property, a heavy burden on the heirs.
In addition, by buying through a company, the tax impact of other taxes and fees can also be minimized.
IMPORTANT: Opening a business in Florida is simple, fast and cheap. It does not compare to the opening process. It can be done at a distance, without the need to leave your country. We guide throughout the process and can appoint accountants in Florida with long experience in this procedure for foreigners
How to transfer the values abroad!
Once the best purchase format has been decided, the time is approaching to transfer the values from Brazil abroad.
As mentioned, this is a customary financial operation and can be requested even for the manager of your bank in Brazil. The main banks operating in Brazil have the necessary structure to carry out these operations.
Another way is to hire the services of an independent Foreign Exchange Broker. There are several foreign exchange brokers in Brazil. If you don’t know one, please contact us and we can indicate.
Are there restrictions on the part of the Brazilian government to transfer the values abroad?
The amounts, when transferred abroad, are registered with the Central Bank of Brazil. An exchange contract is closed and the remittance is sent to the account designated by the buyer.
There is no restriction on the part of the Brazilian authorities to transfer resources to the U.S., as long as the origin of the resources is proven and lawful. The foreign exchange broker itself will require documents proving the origin of the values, since these institutions are rigorously audited by the Central Bank.
The Central Bank of Brazil has prepared a booklet to guide and clarify you, who need to trade foreign currency, on how to meet your needs in a legal and safe way. You can download it here
It is important to note that, after the purchase of the property, the new property must be informed in the declaration of IR in Brazil. The non-declaration violates Brazilian laws. It is important to always seek guidance from an accountant in Brazil for the correct declaration.
How to choose the Exchange Broker in Brazil
Before choosing the foreign exchange broker or the bank that will carry out the transaction, it is important that you research the rates charged by each institution. When transferring the values, the foreign exchange broker or the bank charges the so-called “spread” (percentage or rate) on the amount sent. Choose the one to charge the smallest spread and, of course, the one that gives you confidence and provides good service.
That is why it is essential that you have the guidance of a good real estate broker in Florida. It is the ideal person to seek guidance throughout the purchase process, including when transferring the values abroad.
To which destination account will the amounts be transferred abroad?
The contracted exchange broker will then request the data of the account abroad to send the payment.
As explained, the destination account abroad may be an account opened by the buyer in Brazil, of the same ownership, or the account of a company, opened for the purpose of buying the property.
If the amounts are transferred to an account of the same ownership, already previously opened abroad, simply inform the data of this account to the Foreign Exchange Broker. Once the amount in the account abroad has been cleared, the second step is to transfer the resources to the so-called “Escrow Account”, a kind of security account where the amounts are temporarily held until the purchase process is completed.
This account is maintained by a Title Company or by a lawyer with authorization to do so.
The Title Company will then carry out all the analysis of the documents, among other investigations. Since everything is right and all parts are protected and insured, then the transfer of the deed is carried out. This procedure, in Florida, is called “Closing”.
That’s why the real estate market in Florida is one of the safest and most transparent in the world. Until everything is analyzed in detail, the payments do not reach the hands of the seller. If any problem is detected in the process that prevents the operation from continuing, the amounts are returned to the buyer.
Purchase of the property by a company. How is the transfer made?
In case the purchase is made by a company, the amounts must be transferred, at first, from Brazil to the company’s bank account in Florida. Secondly, from the company’s account to the Escrow Account.
There are several corporate structures that can be set up for the purchase of a property in Florida. It is possible, for example, to open an offshore in a tax haven (all legally) that will be the parent company’s company in Florida. So, in this situation, the transfer of values can take another path, but all in a transparent, simple and agile way.
NOTE: The word “offshore” usually brings references, often negative. We are used to seeing headlines in the media about large illegal operations involving “offshores” in tax havens. However, an off-shore is just a corporate instrument like any other that indicates to be a company belonging to an “off-coast” region (outside American jurisdiction). There is no illegality in opening an offshore or setting up corporate structures involving an offshore. The illegality is in not informing/declaring the existence of offshore to the tax authorities, acting in bad faith, to avoid taxes or hide information.
THIS ARTICLE PROVIDES GENERIC INFORMATION FOR INFORMATIONAL PURPOSES. NUMEROUS FACTORS CAN CHANGE THE INTERPRETATIONS PRESENTED HERE. PLEASE DO NOT CONSIDER THE INFORMATION CONTAINED HERE AS A LEGAL OR TAX GUIDANCE. WE ALWAYS RECOMMEND SEEK GUIDANCE FROM PROFESSIONALS SPECIALIZED IN THE TAX AND LEGAL AREAS. CAP INTERNATIONAL WORKS IN PARTNERSHIP WITH LAWYERS AND ACCOUNTANTS, IF YOU NEED INDICATIONS.
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida. Our work goes far beyond the simple intermediation of a property. We want to be your right arm in the USA and, for this, we have a wide network of partners. If you want to know more about the investment opportunities in the real estate sector of Orlando and South Florida, contact me on WhatsApp: +1 305-761-2655 (Heloisa Arazi)
