Brazil - Foreigners opening bank accounts

If you have an RNE (Foreigner national identity card) and a CPF (equal to US Social Security) you can quite easily open an account.If you own property in Brazil and have any other connections getting the RNE takes time but gives permanent residency and eliminates the need to go through foreigner lines at customs.

For people who have property or other connections in Brazil this process is often worth doing just to simplify all the forms and payments that are required.

In theory there are accounts available for nonresident foreigners. In reality few banks, if any, will open them because of the huge paperwork involved.

Another big benefit is the RNE is a permanent resident visa so allows you to use the Brazil line and immigration rather than the foreigner line and you no longer need repetitive visa stamps.

jbcarioca, I have the RNE and at GIG can use the Brazilian citizen line, but they still stamp the passport entering and leaving. At GRU, when I have gone through immigration there, I am instructed to use the line for foreigners, coming and going. Each port does it differently. Thus I prefer going through immigration at GIG. Sometimes on my routing to leave Brazil I fly domestic to GRU and there they always want an immigration form filled out which they stamp, ostensibly to track how long you are out of the country, I suppose, but isn't that what their computer system should be capable of doing? Doesn't matter if I tell them I am going to re-enter via GIG and GIG never does this and GIG never asks for the form GRU made me fill out.

And yes, the banking system can be quite an experience to navigate, even having the RNE and CPF. The banks here just do things differently. One bank I use is HSBC as with the account I have, there are no fees added on the ATM transaction or conversion. I used to be able to move money into Brazil via the web, but while HSBC said the limit was 100,000 US dollars, Brazil said it was 2,999. Now that has changed and can't be done anymore. So while having the RNE and CPF will improve some aspects of banking, it doesn't solve everything.

gfrodo, I suspect if other people are interested there will be more need for clarifications. Now that you mention it I do remember having to fill out the odd immigration form at GRU, but only on departure. I do not remember having to go through the foreigner line.

In fact I know for sure these policies vary by airport, as you say, and also from time to time.

There was, for example, a period a couple of years ago when Brazilians could enter and leave on a foreign passport if they presented their RG (National Identity card). The foreign passport was used only to confirm that the departure had been on a legal document, so one agent told me at the time. That was soon after the Mercosur requirement was modified to RG only for Mercosur citizens.

I too banked with HSBC because of the global ease. They still have fee-free wires from any worldwide HSBC account, which saves money if the amounts are large, but the exchange rates for large amounts still must be individually negotiated. That is a pain.

With all that is wonderful about Brazil easy banking transactions are not, but they compensate for that difficulty by making them outrageously expensive also.

At least the returns can also be very high. Once one has RNE and CPF one is also eligible to Tesouro Direto, home of high yields and high safety combined with low transactions cost. Excellent choice for buying Federal bonds.

Thank you for the information.

I already went through a portion of the process to obtain an RNE, but I canceled further attempts to get the card after I learned that I would have tax problems if I became a resident of Brazil while I am a resident of the U.S.

I hired a large law firm in Sao Paulo to assist in the purchase of a condo. The firm assisted me in obtaining a CPF number which I had to have in order to buy the condo. I still have the number and have to use it while conducting certain business in Brazil.

After I had problems opening a bank account in Brazil, the law firm had the idea that I should apply for an RNE (RG). Things were on track to get the card until I learned that Brazil taxes residents (including holders of an RNE card) on "worldwide" income.

I am a U.S. resident and pay U.S. taxes.

As a holder of an Brazil RNE, it meant that I would have to show Brazil my U.S. tax return each year and pay Brazil its current tax rates on various components of items in my return and then I would receive a credit on taxes I already paid to the U.S. on my tax returns.

Since the tax rates are much higher and tax rules are quite different in Brazil than they are in the U.S, I would be paying Brazil many thousands of dollars more each year in taxes simply to get a card so that I could open a bank account in Brazil.

Even though I enjoy Brazil, I think their banking system is out-of-step. Considering Brazil's economy is on the upswing, maybe in time their banking system will improve for foreigners.
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After I had problems opening a bank account in Brazil, the law firm had the idea that I should apply for an RNE (RG). Things were on track to get the card until I learned that Brazil taxes residents (including holders of an RNE card) on "worldwide" income.

I am a U.S. resident and pay U.S. taxes.

As a holder of an Brazil RNE, it meant that I would have to show Brazil my U.S. tax return each year and pay Brazil its current tax rates on various components of items in my return and then I would receive a credit on taxes I already paid to the U.S. on my tax returns.

Since the tax rates are much higher and tax rules are quite different in Brazil than they are in the U.S, I would be paying Brazil many thousands of dollars more each year in taxes simply to get a card so that I could open a bank account in Brazil.

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I am not a lawyer nor an accountant but I am a dual citizen US and Brazil. I have never had any income in Brazil other than interest, dividends and capital gains. Every year, just like clockwork, I file my US returns first, because every year, like clockwork, my US taxes are much higher than the Brazil ones. I pay the tax on interest and dividends at source in Brazil just as does everyone else, but those top out at 22.5%, much lower then the US ordinary income of 35% which for me might as well be the average rate. Once the US returns are filed I then file brazil returns. Other than the aforementioned taxes i have never paid anything at all to Brazil because the US taxes are higher.

I have had US attorneys and Brazilian ones tell me how much higher taxes are in Brazil. It just is not true...for individuals, that is. The maximum individual tax rate is 27.5%, rendering it nearly impossible for a US taxpayer with high income to pay more in Brazil than the US. Of course Brazil does not have all the highly complex preferences structures in individual taxation (they compensate with the devilishly arcane and cumbersome corporate structures) that the US does. They have always accepted my US returns as filed. The only complexity I find is the necessity to provide timing for each major income and expense to make the intra-year accounting required in Brazil. That too is now routine.

It is obviously true that individual situations vary. However it is also sad that people are given advice that is often an inaccurate reflection of reality. In this case I have had a very pleasant surprise in Brazil because I was uniformly advised to the contrary. Luckily my Brazilian advisor is a CPA in both the US and Brazil, so he disabused me of my pessimism quite quickly.

BTW, I know you know the RNE is foreigners and RG is Brazilians, but all readers might not.

+1
Have to agree with jbcarioca on the taxation as my experience is very similar.

As a rule I place my RNE and CPF inside my Swiss Passporte upon arrival.

Despite this precaution, my experience is to be shown to the empty Diplomatic line, and mind you, I am not complaining.

Thank you jbcarioca, for the excellent advise regarding the Tesouro Direto.

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I have had US attorneys and Brazilian ones tell me how much higher taxes are in Brazil. It just is not true...for individuals, that is. The maximum individual tax rate is 27.5%, rendering it nearly impossible for a US taxpayer with high income to pay more in Brazil than the US. Of course Brazil does not have all the highly complex preferences structures in individual taxation (they compensate with the devilishly arcane and cumbersome corporate structures) that the US does. They have always accepted my US returns as filed. The only complexity I find is the necessity to provide timing for each major income and expense to make the intra-year accounting required in Brazil. That too is now routine.

It is obviously true that individual situations vary. However it is also sad that people are given advice that is often an inaccurate reflection of reality.

snip snip

BTW, I know you know the RNE is foreigners and RG is Brazilians, but all readers might not.



In the U.S., I have the accounting firm Ernst & Young prepare and handle my income tax matters. When I considered getting an RNE in Brazil I considered it only so that I could open a bank account in Brazil. The Brazilian attorney who handled the purchase of a condo for me suggested that I apply for an RNE.

Later, I was advised by my local U.S. office of Ernst & Young to consult with the firm - Ernst and Young Auditores Independentes located in Morumbi, near Sao Paulo.

Ernst & Young is a highly knowledgeable, specialized and prestigious firm whose advice I trust.

In an in-person conference with the Brazilian CPAs in Morumbi, and a later confirmation letter to me, it was determined that due to my income producing business holdings in various parts of the world, I would be paying Brazil a tax on my non Brazilian income from "worldwide" sources.

I have no reason to doubt the advice I was given relative to my individual income pattern. For that reason, I abandoned further efforts to obtain Brazilian residency.

Yes, I am aware of the difference between an RNE and an RG. Thank you for pointing out the distinction.

Despite the hassles of paying ongoing bills in Brazil without a bank account, I still find Brazil a great place to visit.
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Brazilian residents pay tax on their worldwide income, just like US citizens.
Brazilian non-residents pay tax in Brazil only on local income producing assets or related capital gains.
Normally a foreign tax credit is available on the Brazilian tax return.

Brazilian residents pay tax on their worldwide income, just like US citizens.
Brazilian non-residents pay tax in Brazil only on local income producing assets or related capital gains.
Normally a foreign tax credit is available on the Brazilian tax return.

US citizens do not pay taxes on their worldwide income if it kept out of the US and follows certain rules.

-Chris

US citizens do not pay taxes on their worldwide income if it kept out of the US and follows certain rules.

-Chris

Yes they do Chris. Check the Internal Revenue Code :)
What you are referring to is probably so-called "exclusions" or "exemptions", but the basic rule is still taxation of worldwide income.
Wish it would be different, but it isn't.....

US citizens do not pay taxes on their worldwide income if it kept out of the US and follows certain rules.

-Chris

What rules?

The only "rule" is the "physical presence" rule that allows exclusion of a portion of earned income if a taxpayer is out of the U.S. for a required number of days each year. All other "worldwide" income is subject to tax.
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US citizens do not pay taxes on their worldwide income if it kept out of the US and follows certain rules.

-Chris

US citizens not only pay US tax, but the foreign residence exclusion is now largely meaningless to moderately prosperous people. I pay taxes in both Brazil and the US and am a citizen of both countries. Both countries tax on the basis of worldwide income. US income taxes are higher than Brazil (max 27.5% Brazil)

The US is one of a tiny group of countries, including North Korea, BTW. that tax based on citizenship/permanent residency rather than residency. US citizens and permanent residents are taxes everywhere on everything.

My tax attorney is admitted to the bar in the US(California) and Brazil and is a CPA in the US also as well as Brazil. If there were a way to not have me pay US taxes he would have found it. Every year I owe more US tax than Brazil tax. Luckily, though there is no tax treaty between the countries both honor taxes paid in the other country as credits on their own. Many countries have tax treaties to eliminate dual taxation of the same item.

US citizens not only pay US tax, but the foreign residence exclusion is now largely meaningless to moderately prosperous people. I pay taxes in both Brazil and the US and am a citizen of both countries. Both countries tax on the basis of worldwide income. US income taxes are higher than Brazil (max 27.5% Brazil)

The US is one of a tiny group of countries, including North Korea, BTW. that tax based on citizenship/permanent residency rather than residency. US citizens and permanent residents are taxes everywhere on everything.

My tax attorney is admitted to the bar in the US(California) and Brazil and is a CPA in the US also as well as Brazil. If there were a way to not have me pay US taxes he would have found it. Every year I owe more US tax than Brazil tax. Luckily, though there is no tax treaty between the countries both honor taxes paid in the other country as credits on their own. Many countries have tax treaties to eliminate dual taxation of the same item.

You are right jbcarioca, however, it is worthwhile to point out that without a tax treaty the foreign tax credit is only available for federal income taxes, which for the US that has a two-tier (federal and state tax) tax system, makes it impossible to compensate US state income taxes against Brazilian income taxes on the same income.

snip snip

Luckily, though there is no tax treaty between the countries both honor taxes paid in the other country as credits on their own. Many countries have tax treaties to eliminate dual taxation of the same item.



Although there is no formal tax treaty between Brazil and the U.S., as of 2007 there is an exchange of tax item information (interest, dividends, real estate sales, stock sales, et cetera).

See this article:

http://www.associatedcontent.com/article/218004/us_and_brazil_sign_tax_information.html

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At least the returns can also be very high. Once one has RNE and CPF one is also eligible to Tesouro Direto, home of high yields and high safety combined with low transactions cost. Excellent choice for buying Federal bonds.

jbcarioca,do you have any idea how TD compares to CDB SELIC linked investment in which I currently have most of my funds? My investment aim is secure income generation rather than capital growth.

jbcarioca,do you have any idea how TD compares to CDB SELIC linked investment in which I currently have most of my funds? My investment aim is secure income generation rather than capital growth.

Yes. there are a number of different TD choices. The SELIC linked ones perform better than any of the public SELIC funds, mostly because three is no management fee or transaction costs other than custodial fee.

That is why no investment manager nor bank recommends Tesouro Direto. They have no fees so make no money out of it. Here is the link:

http://www.tesouro.fazenda.gov.br/tesouro_direto/

Yes. there are a number of different TD choices. The SELIC linked ones perform better than any of the public SELIC funds, mostly because three is no management fee or transaction costs other than custodial fee.

That is why no investment manager nor bank recommends Tesouro Direto. They have no fees so make no money out of it. Here is the link:

http://www.tesouro.fazenda.gov.br/tesouro_direto/

Many thanks. I had a feeling that fees would come into it somewhere;)

Although there is no formal tax treaty between Brazil and the U.S., as of 2007 there is an exchange of tax item information (interest, dividends, real estate sales, stock sales, et cetera).

See this article:

http://www.associatedcontent.com/article/218004/us_and_brazil_sign_tax_information.html

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There is actually a tax treaty between the US and Brazil ready to go, but it needs to be voted in the Brazilian Senate, and that has not happened to date. Why ? is anyone's guess........

US citizens not only pay US tax, but the foreign residence exclusion is now largely meaningless to moderately prosperous people. I pay taxes in both Brazil and the US and am a citizen of both countries. Both countries tax on the basis of worldwide income. US income taxes are higher than Brazil (max 27.5% Brazil)

The US is one of a tiny group of countries, including North Korea, BTW. that tax based on citizenship/permanent residency rather than residency.

What you say is indeed accurate.

Even a "high-tax" Scandinavian country like Sweden doesn't tax the income of well-advised, moderately prosperous Swedish-American business people residing in Sweden as highly as the US does US persons.

Worse yet, those US citizens not resident in the US yet being taxed on worldwide income by the US are having an increasingly difficult time to bank in the US due to post-9/11 changes to laws/regulations/policies/practices.

What you say is indeed accurate.

Even a "high-tax" Scandinavian country like Sweden doesn't tax the income of well-advised, moderately prosperous Swedish-American business people residing in Sweden as highly as the US does US persons.

Worse yet, those US citizens not resident in the US yet being taxed on worldwide income by the US are having an increasingly difficult time to bank in the US due to post-9/11 changes to laws/regulations/policies/practices.

So far I manage to have US accounts using a US UPS store address. My current bank asked about that so I am waiting to find out if I may be forced to close the account. I hope not. How will I pay my US taxes without it?

US taxes, both federal and state, can easily be paid with a Brazilian international credit card. Go on the IRS site and you will find the names of the companies performing such service. There is obviously a charge for this, but normally very reasonable. And best of all: You can earn FF miles on the payment :)

US taxes, both federal and state, can easily be paid with a Brazilian international credit card. Go on the IRS site and you will find the names of the companies performing such service. There is obviously a charge for this, but normally very reasonable. And best of all: You can earn FF miles on the payment :)

Not all of them can be so paid. There is also hefty tax for paying with a brazilian card outside Brazil and the rates are being raised again, as announced yesterday. Having a US account is important bor a US citizen, but the new regulations there are making that increasingly difficult. Not impossible, but cumbersome.

US citizens not only pay US tax, but the foreign residence exclusion is now largely meaningless to moderately prosperous people. I pay taxes in both Brazil and the US and am a citizen of both countries. Both countries tax on the basis of worldwide income. US income taxes are higher than Brazil (max 27.5% Brazil)

The US is one of a tiny group of countries, including North Korea, BTW. that tax based on citizenship/permanent residency rather than residency. US citizens and permanent residents are taxes everywhere on everything.

My tax attorney is admitted to the bar in the US(California) and Brazil and is a CPA in the US also as well as Brazil. If there were a way to not have me pay US taxes he would have found it. Every year I owe more US tax than Brazil tax. Luckily, though there is no tax treaty between the countries both honor taxes paid in the other country as credits on their own. Many countries have tax treaties to eliminate dual taxation of the same item.
jbcarioca,
Can you tell me the name of your tax attorney/CPA? We are U.S. Citizens and live in California. My husband is Brazilian and he own assets with his family in Brazil and pays taxes there. I would like to find a CPA who knows what they are talking about who is familiar with Brazilian taxation as well as U.S. taxation on foreign assets. We live in Nor Cal. If they do not live near us, perhaps they can refer me to someone who does. Thank you for all of your information. It agrees with my extensive research on the subject!

jbcarioca,
Can you tell me the name of your tax attorney/CPA?

You have a PM

Banco Real was taken over by Santander (Spain) not too long ago. According to the Santander press release last month, Brasil was the primary profit source for the company.

Accordingly, I opened a new account at Banco Itau, and it took all of 21 minutes. Very professional. Itau thus far, seems to be more focused and business-friendly, similar to Banco do Brasil. To then close my Santander account took one-half day of primarily waiting in line. Quite a difference.

Regarding assistance request in California, USA, you might try Ricardo Coutinho of RC Business LLC, 8484 Wilshire Blvd # 745, Beverly Hills, CA . Telephone: (323) 651-2185. His office is located down the hall from the Consulate General of Brazil, which also includes legal notarization of documents (US citizens only-Not for Suisse or EU) for the Legal Section inside the Consulate. He is equally helpful and professional.

I hope this is helpful.