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Brazil Banking Regulations.

Some of our Brazilian customers/suppliers indicate it is especially difficult or prohibitive to send and receive money from abroad.

I'd like to facilitate the process of receiving customer remittances and paying our vendors without formally setting up shop there.

Does anyone in the community have any tips or information that could otherwise help?

Kind Regards,

Ken Stumder

Answers

Mark Kirsch
Title: Vice President of Treasury
Company: ContourGlobal
(Vice President of Treasury, ContourGlobal) |

Ken,

Unfortunately what you are proposing is exactly what created the currency controls in the first place. Getting money into Brazil is not the issue. Getting money out for legitimate, documented expenses is also not the issue. That is done once the proper documentation has been presented to the Central Bank, and before the FX trade is entered into. What you should be focusing in is what can you do to minimize the taxes associated when conducting business there.

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

In the past, working as a controller with a shipping company that was building large vessels there, I had good luck working with Citibank to handle funds' flow. Both their full service FX staff and Worldlink (there spot trading software) were helpful in this regard. Mark above is right about tax management.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Thanks Mark & Linda. So it appears that if a company wants to do trade in Brazil (whether significant or not) it must set up shop formally?

Frank Possinger
Title: Treasurer
Company: ABP Induction LLC
(Treasurer, ABP Induction LLC) |

As a matter or clarification I did not see Mark or Linda recommend sitting up shop there. If you mean establishing a legal presence in Brazil that is not something you want to do unless you have a compelling reason. The point is to provide the proper documentation and try and minimize the tax bite in the form of withholding taxes on payments from Brazil.

Kevin Kelso
Title: Controller
Company: The Arc of Delaware
(Controller, The Arc of Delaware) |

Ken: Transfer & receiving funds into & out of Brazil will require a bit of start-up work as the central bank (BACEN) is the dominant bureaucracy. I recommend you have a conversation with any of the major international banks that have a dual presence in Brazil & the US. (JPMorgan, Citi, Deutsche Bank, etc). Although these articles are a bit dated & germaine to investors, you can get an idea of the "difficulties" your customers & suppliers are referring to for normal business transactions in the rest of the world.

As a former Controller for an international bank with investors who did business in Brazil, I can confirm that you should seek good advice from a banking partner who has a presence in this country today.

http://www.deloitte.com/assets/Dcom-Brazil/Local%20Assets/Documents/Exchange%20Control%20and%20Foreign%20Investment.pdf

http://www.gtnews.com/article/6306.cfm

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