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.
All international transfers are via the Banco Central do Brasil and although technically you are sending directly to the sellers account, your funds will in actually be held by the Central Bank in a holding exchange account, in preparation for the exchange from your currency to Brazilian Reais.
In order for the seller to access the funds that you have sent, they must present the sales contract, which you have signed and then the exchange will take place.
For this reason banks cannot at this time offer a firm exchange rate at the time of transfer as the exchange rate will only be confirmed when the seller presents the sales contract to their bank.
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 system managed by the Banco Central do Brasil ensures the registration of funds and proves your investment into the country. Most importantly it shows that the money was earned outside of Brazil and therefore is exempt from Brazilian income tax and just as importantly when you sell a property in Brazil and want to repatriate money, you can send back the original purchase amount free of any tax implication, capital gains tax may be payable on any profit made from the sale of a property.
It is vital to ensure your funds are registered correctly with the Banco Central do Brasil on entering the country to prevent any limitations on returning funds to your home country should you wish to do so on sale of your property.
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.
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