Sending Money to Brazil Can Be a Real Pain
Before sending money to Brazil, foreign investors should take some time to think through the wire transfer process. In addition to calculating taxes and fees, you’ll want to consider the purpose for the wire and the exchange rate.
In Brazil, international wire transfers in foreign currencies are subject to the Imposto sobre Operações Financeiras (IOF). The IOF rate varies depending on the type of transaction, but in the case of funds that are sent for capital contributions, the rate is 0.38%.
In addition to the sending bank and the receiving bank, there may be one or more intermediary banks facilitating the transaction. You can expect that each one will charge their own fees, which will automatically get deducted from the funds being transferred.
You’ll also need to declare the purpose of the wire transfer with the Central Bank. For example, you’ll want to identify whether it’s a loan, capital contribution, payment for services, or some other type of legal transaction. You may also be required to provide backup documentation.
Knowing the exchange rate can be a challenge because it’s constantly fluctuating. If you’re sending foreign currency but need to know the exact amount in Brazilian reais, consider working with an exchange broker. They can often lock in the exchange rate for a short period of time.
Sending money to Brazil should be easy, but it’s often a huge challenge for foreign investors. However, as long as you plan ahead with guidance from a trusted legal adviser, the transaction should go smoothly.