Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

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Sublime8700
Posts: 292
Joined: Tue Dec 01, 2009 3:27 pm

Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by Sublime8700 » Tue Oct 18, 2016 2:13 pm

Hi All -

I would like to figure out some resources to read or perhaps individuals to talk to in order to understand how to best invest as a citizen of Brazil with about $500,000-$1,000,000. I am trying to understand the basics for a close family member so that they do not squander an inheritance they have received and I am, for obvious reasons, concerned that it may be incredibly risky to invest the money in Brazil (in CDs or in government bonds that have ridiculously high yields) and so I want to see if it is feasible to move a significant amount of the funds to the United States so the investments will be denominated in USD and not carry the currency or credit risk that exists in Brazil today.

This seems like it must be possible but I don't want to give advice where I am not sure it makes sense (though I am pretty sure it doesn't make sense to take the credit and currency risk by keeping the funds in Brazil if possible).

Does anyone have any good resources for this type of situation (either written or individuals who specialize in coming up a plan for people in this situation)?

Even if there are just some basic principles to keep in mind (or rules) I would be much obliged as I am starting my research into the matter.

Feel free to send a private message if you have a referral to someone who deals with this regularly.

Thanks!

Sublime8700
Posts: 292
Joined: Tue Dec 01, 2009 3:27 pm

Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by Sublime8700 » Wed Oct 19, 2016 12:42 am

anyone :) ?

AlohaJoe
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Location: Saigon, Vietnam

Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by AlohaJoe » Wed Oct 19, 2016 1:21 am

In theory it isn't complicated:

- Open a brokerage account with a Brazilian broker
- Transfer money to them
- Buy non-Brazilian assets, whether that's US currency, stocks, bonds, whatever.

Some of the complications you may run into:

- There may not be any local brokerages. Or they might not allow you to invest in non-local assets. Or they might have ridiculous fees.
- Interactive Brokers is available pretty much everywhere, from what I can tell. So that might be an option.
- There may be currency controls that make it hard/impossible to transfer the money out.
- Owning US assets exposes you to US estate taxes, which are widely considered punitive for non-resident aliens: 40% of anything over $60,000 I think. So you may prefer to have European-based assets instead. Irish ETFs seem to be a common suggestion in this situation.
- You probably have a tax treaty with the US which may change (or make irrelevant) any of the above. All you can do is read the tax treaty to figure out what it says.
- Brazil may have punitive taxes on foreign assets. (The US does, for instance, but ETFs tend to dodge most of those problems these days.)

There are some links in the wiki which aren't about Brazil but cover some of these topics at a high level, here's one:

https://www.bogleheads.org/wiki/Nonresi ... Irish_ETFs
Last edited by AlohaJoe on Wed Oct 19, 2016 1:41 am, edited 1 time in total.

bnes
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Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by bnes » Wed Oct 19, 2016 1:36 am

Maybe this list of brokers in Brazil may help: http://www.selectabroker.com/Brazil/

TedSwippet
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Joined: Mon Jun 04, 2007 4:19 pm

Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by TedSwippet » Wed Oct 19, 2016 3:01 am

AlohaJoe wrote:- You probably have a tax treaty with the US which may change (or make irrelevant) any of the above. All you can do is read the tax treaty to figure out what it says.
Brazil lacks both an income tax and an estate tax treaty with the US.
AlohaJoe wrote:- Owning US assets exposes you to US estate taxes, which are widely considered punitive for non-resident aliens: 40% of anything over $60,000 I think. So you may prefer to have European-based assets instead. Irish ETFs seem to be a common suggestion in this situation.
That one then, due to absence of any US treaties.

Sublime8700
Posts: 292
Joined: Tue Dec 01, 2009 3:27 pm

Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by Sublime8700 » Wed Oct 19, 2016 3:06 am

As I don't feel qualified to dispense this type of financial advice, can anyone recommend a good individual/group or even type of person that I could search for that would sit down with me and my sister in law and go over these options? E.G a specialist in this area who is reasonable (perhaps not Bogleheads cheap) on costs -- or Fee-Only....?

frombrazil2world
Posts: 10
Joined: Sun Jan 22, 2017 5:56 pm

Re: Brazilian Citizen Investing - Wish to Limit Credit / Currency Risk

Post by frombrazil2world » Fri Jan 27, 2017 10:55 am

It´s been a long time since last answer. Maybe you got you answer, or not? I´m also from Brazil.

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