Money Transfer Process & Fees

As if the realtor’s commission and the lawyer’s fee wasn’t enough…. there is also a cost to get u$s dollars into the country of Argentina. Short of bringing it on a carryon bag (which I do know some clients that have done that — although I CERTAINLY do NOT recommend doing this as it’s dangerous), it is impossible to get dollars into the country without some sort of fee. Yes, you heard that right. There is no free way of bringing u$s into the country of Argentina. And even if you try carrying it on your carry-on bag it is unlawful to bring in more than u$s 10,000 undeclared. If you get caught, the government will fine you by taking 50% of the undeclared amount.

After the devaluation, Argentina made it difficult to get U$S into the country. Basically the banks all automatically convert every single u$s that comes into the country and they convert it to pesos. Each transaction is required to go through the Central Bank of Argentina. The thing is that they take a few cents spread on every transaction.  THEN since all real estate is priced in u$s, you must convert the pesos back into u$s dollars. They stick you with another few cents spread.  So you are effectively getting charged two times. This is VERY expensive. The actual spread depends on each bank.

Out of the dozens of surveys that I paid to the foreigners that purchased here, many had problems with the banks here. Some used money transfer agencies and the money took weeks to hit the account. The trick is that some banks and money transfer agencies are using your money and since interest rates are fairly high here, they are using the “float” for a few weeks. $100,000 might not be a huge amount but imagine if they are doing that with dozens of people every month. You are talking about a few u$s million every month in float that they are playing with.

You are probably scratching your head asking yourself, “but why would you need cash”? The answer. ALL REAL ESTATE TRANSACTIONS HERE ARE IN CASH. There are a few exceptions to the rule but I’ve only conducted a few buy/sell transactions where we used a wire transfer. Even when both parties have US or European bank accounts, the seller still prefers cash. The reason why? Because as I mentioned above, there is a cost of getting money into the country and most are using the cash to purchase something else so they would rather have you “pay” to get the u$s into Argentina. The other big reason is these locals don’t trust anything but cash.

No matter how many times I buy a property for a client, it always amazes me when the seller is sitting there counting the cash. I have purchased tens of millions of dollars in real estate here in Argentina and every single time except for one time…cash was exchanged at the table at the title deed transfer. It is an awkward site. Imagine with the technology we have these days and people are paying cash. Some transactions were as high as u$s 3.5 million and it was all in cash.

Prior to 2006 many foreigners were using private money exchange firms to wire money in for their purchases and the government did not really care how you brought the money in. Then in 2006, the government passed an anti-money laundering law and they carefully monitor how funds are brought into Argentina.

There is a LOT of paperwork involved including past tax returns in your home country, bank statements outlining where the cash is coming from, stock or real estate sales proceeds paperwork and a current resume. It is all carefully monitored. The cost of using an official money transfer firm registered through the Central Bank is the same cost to use an unofficial one for the most part, so our firm highly recommends you bring the funds in “white” and with an official money transfer firm or bank registered through the Central Bank.

They all charge a flat percentage rate based on the financial markets at the time of the transfer. For the past several years, it has fluctuated between 3% to 4.5% of the transfer amount. A seemingly steep amount but the safest and most reliable method. I do NOT recommend carrying your life savings on a carry on. All it takes is one phone call from the customs agent going through your bag to his friends to watch you as you go through the airport and rob you on the way to the city. Keep in mind that you are legally required to declare any cash in excess of u$s 10,000 into the country. As mentioned, the customs agent can make one phone call and your money would be in jeopardy.

Foreigners should be mindful that the government is making it more and more difficult to use private exchange houses that are not registered with the Central Bank. Although it’s very difficult and time consuming and also involves more paperwork, we recommend that you bring the money with an official money transfer firm registered with the Central Bank. It is best to go through a local authorized money exchange house so that the transaction goes through the Central Bank so you avoid problems in the future when you go to sell your property. Our firm can recommend ethical and trustworthy firms that we have used for the past 8 years.

This is something that has recently changed in late 2006. Prior to late 2006, the government didn’t really care how you brought in your money. Now, they are worried about money laundering. AFIP tried to change the law in 2007 to avoid all cash transactions completely. The reason why? Many locals are recording false lower prices on the title deeds and getting out of paying their fair share of the taxes so the government is trying to pass a law that requires all sales to be in check, bank wire or other methods besides cash. But I don’t believe it will ever happen and the majority of transactions are in cold hard cash.

The benefit of buying a property that is owned by a foreigner is most have bank accounts in the USA or Europe and will allow you to wire directly to them saving you up to 3.5% in fees.


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