Sending money to Brazil is not restricted and can be easily done. Transferring money out of Brazil above R$10,000 requires various registrations and restrictions to be overcome but the brokers listed in the table to the left can help.
In the years since the reals free float in 1999, the government has simplified the foreign exchange market in a bid to lower costs and improve ease of transfer, as well as to enhance supervision. Broadly speaking, the International Capital and Foreign Exchange Market Regulation (RMCCI) 2005 allows companies and individuals to purchase and sell foreign currency and perform international transfers in reais, regardless the nature of the operation whether buying a property, investing in the stock market, importing or exporting, for example with no limits with respect to the amount involved.
The RMCCI itself was superseded in early 2014 by new legislation intended to simplify further the process of moving currency, but the sale and purchase of foreign currency in Brazil, particularly in large amounts, remains tightly controlled, with all transactions over R$10,000 needing to be registered. Transferring small amounts of money, either local or foreign currency, both into or out of Brazil, is very easy however, whether that transfer is done in cash or through an intermediary such as a bank or a broker. For sums up to US$3,000, there are minimal ID requirements and the transfer does not have to be declared. Above US$3,000, transactions need to be declared to and recorded by the central bank, Banco Central do Brasil (Bacen). There may be significant tax implications of moving these funds outside of Brazil.
Foreign currency transactions in Brazil, whether sending reais or buying reais, are subject to a transaction tax of 0.38%. In the interests of transparency and competition, Bacen requires the Total Effective Value (VET) of every foreign exchange transaction conducted in Brazil up to a sum equivalent to US$100,000 to be calculated in advance of execution. VET encompasses all possible aspects of a transaction such as the real exchange rate, taxes and fees.
Non-resident foreigners in Brazil are allowed to hold local currency accounts, and it is possible to open non-resident real bank accounts outside the country with selected Brazilian banks if they have branches abroad. Any income earned in Brazil, for example, from rental property, can be paid in these accounts in local currency. The bank will register such accounts with Bacen; any transfer over R$10,000 will also be registered, including full details of all parties and the purpose of the transfer. Foreign nationals temporarily resident in Brazil, for work, for example, are allowed to maintain foreign currency accounts, subject to certain restrictions. Foreign currency accounts in Brazil can only be funded by transfers from abroad.
When funds are brought into Brazil for the purpose of opening a company the initial capital is registered with the Department for Foreign Capital and Control and Registration (Fiscalizao e Registro de Capitais Estrangeiros; FIRCE). FIRCE issues a certificate which entitles the company to remit future profits and/or dividends and, if necessary, repatriate capital.
To be able to trade currencies and provide related financial advice in Brazil, a broker or overseas money transfer provider must be a registered with Bacen, and use an authorised correspondent. A list of all institutions authorised to operate in the foreign exchange market can be found through Bacen. We have provided below some initial guidance on these areas and always recommend you consult in the first instance with your chosen broker, as well as any other personal or business, legal and financial advisors.
The foreign exchange market is regulated by Bacen and the Conselho Monetrio Nacional (CMN; National Monetary Council); the CMN formulates monetary, credit and foreign exchange policy which is then implemented and enforced by Bacen. Bacen supervises and licenses financial institutions.
The real is on a floating exchange rate regime, although the central bank has intervened to keep the real within a narrower band in recent years, in order to avoid rapid or excessive fluctuations in its value. Capital flight from emerging economies like Brazil, Turkey and India in the last two years - combined with financial instability and spiking inflation in nearby Argentina - has prompted the central bank to adopt more cautious policies and tighten some restrictions.
Like Brazilian nationals, foreign residents are subject to personal income tax, imposto de renda das pessoas fsicas (IRPF), on Brazilian income. Brazil has double taxation treaties with a number of countries so any income tax liability in a treaty partner country does not also need to be paid in Brazil, and vice versa, with income tax paid in such a country able to be offset against an individuals IRPF. Other tax deductions include some payments to family dependents, and some health and education costs. Non-residents individuals are taxed at source at 25% on any income derived in Brazil.
It is worth noting that income tax is not levied on inheritance or donation transfers as long as the transfer value is the same as the value at which the asset was reported on the transferors last tax returns and is reported at the same value on the receivers tax returns. (If, however, the asset is valued at fair market value, the positive difference between the market value and the previously reported value is treated as a capital gain subject to 15% income tax). Individuals who become Brazilian non-residents and later reacquire Brazilian residency status are granted income tax exemption for any capital gains earned on the sale or liquidation of foreign registered assets or financial investments acquired while they were Brazilian non-resident.
Brazils currency, the real (BRL), is frequently abbreviated as R$. One real (plural: reais) is made up of 100 centavos. The central bank issues banknotes in values of R$2, R$5, R$10, R$20, R$50 and R$100. Coins are produced in values of 5, 10, 25 and 50 centavos and R$1.