Foreward by Andrew Chilvers
For companies and individuals looking to move into new jurisdictions for business opportunities, setting up a bank account is a crucial part of the process. But this is never as straightforward as it seems.
In all countries, banks are obliged to crack down on fraud and any potential financial scullduggery. As a result, they tend to be very risk averse. Regardless of where a business establishes an office in the world, local banks will generally have the newly arrived expatriates jumping through various hoops, pulling their hair out in frustration.
The new arrival will need the relevant paperwork, including personal identity papers, a personal and business address, personal references and other numerous documents. And that’s just the beginning.
Every jurisdiction has its own banks and banking rules, which are often complex and bureaucratic. Consequently, seeking advice from local legal and financial experts before setting up a bank account is imperative if a company is it get the right account for its particular business objectives. This is why it’s so important to use local advisers who are experts in the jurisdiction to provide information about the local banking rules.
What is the general risk appetite of banks in your jurisdiction and how does that affect setting up a new business bank account?
The risk appetite may vary from bank to bank in Brazil. The risk valuation will depend on the company’s business and also the maturity of the company in Brazil, combined with its turnover.
In Brazil, we do not have a restricted limit for loans or investments, as long it is approved by the banker within registration before the Central Bank of Brazil.
• There are no different procedures for companies or local jurisdictions.
• There are no different procedures for personal accounts.
• Should an expatriate set up with a local bank or keep their salary offshore?
We would advise expatriates to set up a local bank account in Brazil in order to handle its financial activities on a daily basis, however, he/she would be able to send cash out from Brazil to his/her account, always. Always, following the Central Bank of Brazil regulations.
How accommodating are banks in your jurisdiction for opening a business and personal bank account?
Generally speaking, for foreign companies and foreign individuals it is not an easy process to establish a bank account in Brazil, especially with a domestic bank. Brazil does not have many international banks operating as a Commercial Banks. These days the easiest international bank to operate with is Santander Bank.
How varied are banks’ vetting procedures?
The local banks must be in compliance with Central Bank regulations. Therefore, the companies and individuals must provide the support documentation below.
What documents need to be provided?
• Chart of Organisation, identifying the final beneficiary (UBO regulation);
• Shareholders Articles of Incorporation (notarised and translated into Portuguese);
• Power of attorney to a Brazilian tax resident (notarized and translated into
Portuguese);
• KYC (knowing your Customer) questionnaire and, also local working papers must be fulfilled;
• Copy of Passport or another document providing his/her mother’s maiden name;
• For individuals, they must have a local Federal ID number (“CPF”);
How long does it typically take and what is the process?
It may vary from bank to bank, but based on our local experience it would take around 10 days (at Santander Bank).
Should you join an internationally reputable or established bank rather than a local bank?
We would recommend joining an internationally reputable financial institutional. Large corporation may set up their bank account using their international enrolment, such as: Citi Bank, BoA, JP Morgan. Domestics companies are not allowed to use these.
• Is it easier to set up a local bank account and what does that mean for your business? It is not an easy process, unless we have all the requested documentation from the company. We would assist international companies to set up a bank account in Brazil and also assist them to manage local payments (full outsourcing services in Brazil).
• What would be clients’ perceptions if you set up a business account with a local bank? Based on our experience, some companies have been struggling to set up a bank account in Brazil and, we have figured out local contacts in Brazil, which have been helping us to speed up this process.
• Are international banks’ vetting procedures more difficult than local banks? The procedure is the same. Domestic banks are more bureaucratic than International banks.