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Bank Accounts and Money Transfers

Posted on March 21, 2007
Filed Under Expat Tips | 5 Comments

In the past, people flocked to Uruguay to deposit money in Uruguayan banks in order to hide assets. The liberal rules regarding movement of capital, foreign currency accounts and strong banking secrecy laws were very appealing. The Uruguayan secrecy laws are considered more encompassing than those of Switzerland and can only be broken by court order in case of criminal proceedings and few other cases. A few years ago however, Uruguay added several hurdles for non-residents to discourage money laundering and other illegal activities. Also recently, Uruguay passed a law imposing an income tax on residents and non-residents (Uruguayan income only). As a result, opening a bank account in Uruguay has been transformed into a matter that requires some planning.

In order to get the official policy on new accounts for non-residents, I wrote to seven banks. Unfortunately, I received a reply from only two. However the information I did get is consistent with what has been reported by other ex-pats and also by Brazilian friends that opened bank accounts in Uruguay recently.

BROU, the Uruguayan state bank, has by far the easiest process for non-residents, however it has an old fashioned, bureaucratic way of doing business.
For non-residents, the only easy option is the savings account (caja de ahorros). The requirements are: an ID and a minimum of 200 dollars. With the account you get an ATM card than you can use to withdraw money in UY or abroad and you can access your account via Internet. The yearly yield is 0% for balances up US$2,000, 1.2% for up to US$30,000 and 2.5% for larger amounts. If you get a chance, visit the BROU mother ship in the CiudadVieja. The bank interior is impressive. It looks like the Grand Central Station in NYC.

The requirements at the Credit Uruguay Banco, and as far as I can tell most other banks, are:

Paycheck stub or a statement from your accountant showing your income.

Passport or other ID

2 bank references – letters written by two banks with which you do business.

3 personal references - the following information is needed about them: full name, address, telephone, profession, indication of how long at that address

Have a clear credit history with the Uruguayan check clearing agency

A declaration of the origin of the funds and the nature of your activities in your country

In case you wish to have a line of credit associated with your account, you’ll need a list of properties you have in Uruguay certified by a escribano.

Opening a bank account is not all that bad if you go prepared. There is a certain amount of leeway if they get warm fuzzies about you. A friend of mine was able to open an account on the spot by showing his paycheck stub, his Brazilian ID, a second ID that showed that he is a physician; no bank references and no personal references were needed. On the other hand, another friend went unprepared and tried to deposit a large quantity of money and was turned down at the HSBC, a bank where he had an account in excellent standing in Brazil. So he went across the street to BROU and opened a savings account. No questions asked.

A word of caution to American citizens: at many international banks in Uruguay Americans will NOT be able to open a bank account, under any conditions. In order to be able to maintain banking secrecy and not to run afoul of the US government money laundering rules, these banks signed an agreement to refuse opening accounts to American citizens or residents. At some banks, like BROU, Americans can open accounts as long as they sign a W9 form to opt out of the secrecy laws. This means the account activity will be reported to the IRS.

Money transfers from abroad are easy and safe. All you need is the name of the account holder, the name of the bank, branch and the SWIFT (or BIC) number. There are several fees however: 35 dollars sending fee, charged by your bank, 35 dollars receiving fee, charged by the receiving bank and a new 30 dollars transaction fee, charged by the State.

For small amounts, it is far easier and less expensive to use Western Union. You can even send the money from the web using your credit card. However check with your credit card company first because it may count as a cash advance. The money can be withdrawn in Uruguay at any of the RedPagos or Abitab branch. To withdraw the money, the person will need an ID and the order number.

One other possibility is to use regular American checks and have them cashed. It can be done but may take up to 20 days.

Here’s a list of banks in Uruguay. Judging by the information on their web sites, you’ll need to use the telephone a lot in order to find one that fits all your needs. Many banks have web sites that are mediocre at best. There is very little information online about interest rates or details on investment products. Bank hours are short and inconvenient 1 – 5 or 1-6 pm. Fortunately, once you open your account, you will rarely need to go to the bank. Many transactions for which you would normally use banks can be done at RedPagos or Abitab. Checks are not accepted as widely as in Brazil. This may be due to the bank fees and draconian rules regulating their use or may be to avoid paying the IVA tax. Whatever the reason, in Uruguay cash still rules.

Please look here for a vocabulary of Uruguayan Spanish banking terms.

Other posts in Expat Tips

• Pros and Cons of Shipping Furniture Abroad
• Should I Bring My Electrical Aplliances to Uruguay?
• Usufruct and Inheritance Issues
• Tipping Custom in Uruguay
• American Income Tax While Living Abroad
• Visa Requirements to Travel to Brazil
• Inheritance Laws in Uruguay
• Uruguayan Spanish Conjugation
• Obtaining the Uruguayan National ID
• Steps To Obtain Permanent Residency in Uruguay

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