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Transfering US funds to a Colombia bank

I am buying a property in Colombia and I need to transfer the $ to a bank in Colombia so I can open an account. My fiance has gone to different banks in Cartagena asking of how to do this, but most don't know if they can accept a certified manager's check from my bank to their bank and then get it converted to pesos into my new account and then I can transfer to the seller's account at closing.

I know some of you may have done this and perhaps can lend me a hand with some information and the cheapest way around it. We also heard that Citibank in Colombia is connected to US Citibank and one can have an account and use the money in the US and Colombia. This sounds too good to be truth but if it is true, I like to hear more information about it. Perhaps any other bank that any of you may know that are familiar with these transactions. Thanks.

By chewy on Oct 3, 2007, 20:38 in Visa & paperwork.

Brians says on Oct 4, 2007, 08:25:

Need to wire it. Citibank has no connection in US and Colombia (Dollar based account and Peso based account so not connected). I assume you do not reside in Colombia and thus can't open an account. You did not say were your bank is but I see 0% chance of them taking a certified check. You will need to wire to the seller's account. A lawyer can draw up an agreement that upon reciept the seller will pass title to you. I never did get comfortable sending money into someone else's account so I went through the hoops of opening an account in my name. However unless you have a Visa and Cedula and have resided in Colombia for more than 6 months you won't be able to go that route.

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robi666 says on Oct 4, 2007, 08:31:

Brian, one of PBH's posters opened his account with his passport just a couple of months ago. So the truth is that if they want, they can. The key is to know the manager or to have a good client introducing you and explain that you have to transfer big money in.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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chewy says on Oct 4, 2007, 12:28:

I do have a Pensionado Visa and I know that I need to go to DAS to get a cedula de extranjero so I can open the account. I am in Puerto Rico. I was in Cartagena last month and came in agreement to purchase and my Fiancee gave the seller 10 million pesos with the agreement. But I hear that If I take the money in a check there I have to pay a lot of IMPUESTOS to enter the money in to Colombia. If anyone of you know better tricks to enter the money in a cheaper way with the check because I don't want to travel with $90K in my pocket.

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Saltador says on Oct 4, 2007, 13:45:

brians,
I'm not sure you are 100% correct, things may have changed. I have been trying to open an account in Cartagena in preparation to buy an apartment. A gringo I trust who lives in cartagena and has bought and sold a few properties told me the same thing about CitiBank, that the US Citi had no connection whatsoever with the Colombian Citi. However, I went there and was told I could open an account if I had the following:
1. The last three months of statements from my US Citi account.
2. Copy of my Social Security card (or maybe the actual card-don't remember)
3. Either my cedula or a letter from Das.

That was it. I plan to open my account in November when I return to Cartagena. Hopefully nothing will change in the interim!

Chewy, where in Cartagena is the apartment you plan to buy? Just curious as I am still looking...

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pedro says on Oct 4, 2007, 13:55:

Saltador, I'm not sure what that proves. Any bank in Colombia will open you an account with just your cedula, at a minimum.

Beyond opening the account, you also need to check if they will let you do an international wire transfer within the first 6 months of having your account open. This is where a letter of reference or bank statements from the same bank in another country may come in handy. With this documentation, they can potentially consider you as a known client of the bank and the 6 month initial freeze would not apply to you.

Chewy, not sure if you are a troll, or? You already have the answer from Brians, all you need to do is listen to it and believe it. Foreign currency bank check is a blind alley, forget that idea.

que nota!

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chewy says on Oct 4, 2007, 14:15:

Thanks guys. I could wire the money to an account once I open it. I was told in banco Davivienda or something like that, that all I needed was a cedula de extrangero and my passport. Also they told my Fiancee that I need to wait for 15 days for the check to clear before I can use the money. Another option I heard was to wire transfer to my Fiancee's account or perhaps the seller.s account. But now the grapevine says that I will have to pay lots of impuestos. Does anybody know what is the percentage rate in paying this impuesto?

Saltador: I am buying a small farm (Christian retreat on going business), but I also want to build my house there. It is located in Turbaco. So once I am settle there anyone is welcome.

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SFJohn says on Oct 4, 2007, 15:26:

It is definitely a catch-22 that it is difficult for a foreigner wanting to buy a property to open a bank account in Colombia without a Cedula Extranjeria, but it is also difficult to get a Cedula without having bought a property.

I agree with previous posters that no bank in Colombia is going to accept a random foreign certified check for deposit unless you are an established customer. I can also confirm that my HSBC bank in the US is related to the HSBC banks in Colombia only in name, and in my ability to use their ATM's with no fees. I assume most other international banks are similarly independent regionally and do not allow for easy international money transfers.

Based on my research I think the easiest process is to transfer the purchase cost to the seller's bank account. The Colombian bank that receives your transfer has to fill out a "Form 4" so your money is considered "legitimate", and when you sell the property, you will only pay capital gains tax on the profit.

Once the purchase has happened, you go to the local Banco de Republica branch with the deed and a copy of Form 4, and they will give you a Form 11 which registers the property purchase. Having forms 4 and 11 allows you to remove the money from Colombia at a later date.

You might also want to get a letter from the Banco de Republica at this time stating that you made a direct investment in Colombia of over US $100,000, and you submitted Forms 4 and 11 properly. This letter allows you to get a permanent resident investor visa and a Cedula Extranjeria, I think from a DAS office.

I spoke with a very nice and experienced lawyer in Medellin who speaks English named Gloria Valencia. She is a great resource for information related to foreigners purchasing property in Colombia.

Here is the contact information for Gloria:

(04) 232-5321 work
315-286-6537 cell
gloriavalencia at gmail.com

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Saltador says on Oct 4, 2007, 17:54:

Pedro,
I guess I left out that we (my bilingual friend and I) told Citi in Colombia that the reason we wanted to open the account was to transfer money in from the US to buy an apartment.
They indicated it was no problem when transferring from CitiBank in the US.
The first bank we went to asked for mountains of paperwork to open the account, not just a cedula.
But this probably doesn't prove anything. Just sharing info.
Chewy, good luck with your project, I've heard Turbaco is nice.

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robi666 says on Oct 4, 2007, 17:59:

"I am buying a small farm (Christian retreat on going business), but I also want to build my house there. It is located in Turbaco. So once I am settle there anyone is welcome."
Good chewy! Are you going to pay vacuna there? Just asking...

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chewy says on Oct 4, 2007, 18:36:

Hi SF John:
Thanks for the good information. I guess what I really need to know then is if I can wire transfer the complete amount of $80K to the seller's bank account without any problems. I was told to send in multiples of $10K to trusted people until I got all the $80K transfered to Colombia to avoid any taxing of the $80K, but if I can just go ahead and transfer it to the seller that would be great. I trust the person because he is a devoted elderly church pastor.

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robi666 says on Oct 4, 2007, 18:41:

"was told to send in multiples of $10K to trusted people until I got all the $80K transfered to Colombia to avoid any taxing of the $80K"
Don't do that... cuidado! You won't be able to file form 4 and 11...
Taxing on the 80K... what taxing?
1) You cannot enter 80k at the border, by law.
2) If you transfer that money into the seller account, you won't be taxed. He will be taxed according to the capital gain he will realize on the sale of the finca. But that has nothing to do with the way you pay him.

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chewy says on Oct 4, 2007, 18:41:

robi666:
What is vacuna? is that of vaccine shots etc? That is a very good idea to do for the needed people. My plans are that all the profit from the retreat would be to feed breakfast to poor children. In my last trip to Sampues I saw children that would do anything to earn a few pesos a day to feed themselves because their parents could not afford to feed large families.

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robi666 says on Oct 4, 2007, 18:50:

"What is vacuna? is that of vaccine shots etc? That is a very good idea to do for the needed people."
Chewy, not to be too much into your business, but I'd suggest you to spend some months in Turbaco and check things well about the finca before buying it. Sometimes there are hidden taxes... one can never know.
A finca with an ongoing business in Turbaco (which is not Cartagena) owned by a gringo... all red lights are on! I may be wrong, I do not know well the area, but it seems you did not check either...

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chewy says on Oct 4, 2007, 18:56:

OK Robi666:
That makes more sense to me. So in other words, I can go ahead and transfer the $80K to the seller and all is done with the entering of the money. Actually all I owe is $73.5K because my Fiancee already gave him a $5K and he just dropped another $1.5K. The difference is to pay my Fiancee what I borrowed and a little spending money since I will be there for three weeks which will also serve as time for us to get married there.

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robi666 says on Oct 4, 2007, 19:03:

Wrong again... long way to go Chewy!
1) The seller will have to file form 4 to receive the money.
2) You will have to file form 11 with the purchase agreement as prove that you actually invested the money. You cannot receive MORE money than what you actually be spending for buying the finca, or you will have to send back the money home! Also, taxes and notary expenses cannot be computed when filing form 11.
(You can justify the difference filing with form 11 a fake contract for some work at the finca, but that's another story).

Or you can just file form 5 but:
1) You'll possibly be taxed if you want to sell the finca.
2) You can kiss your investor VISA goodbie. 80k is not the 100k required but I know that at MRE they are not so strict.

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robi666 says on Oct 4, 2007, 19:05:

Chewy, trust me, take some months to study well the whole situation...

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robi666 says on Oct 4, 2007, 19:22:

Oh... yes, you already gave 10 millions to the seller... well, it is done!
Good luck then! Your project about the children is beautiful... I wish you the best.

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chewy says on Oct 4, 2007, 19:24:

Wow, thanks robi, but I am doing this in two weeks from now. But I guess if I got the procedure down right, I should be able to do it in two weeks then.

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SFJohn says on Oct 4, 2007, 19:24:

Confirming Robi666's comment, the Colombian lawyer I mentioned before did tell me that the transfer amount needs to be the same as the purchase amount. It is important that the money sent to Colombia for the investment is registered appropriately with forms 4 and 11 or you might end up having significant unnecessary fees or taxes, or not be able to remove the money from Colombia later.

Talking with a lawyer who has experience advising foreigners on this process would be a good idea.

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robi666 says on Oct 4, 2007, 19:29:

John, when are you back in Medellin? Our friend just spent his first day in his new apartment today!

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chewy says on Oct 4, 2007, 19:37:

I see what you mean SFJohn: what I guess my best deal will be to send the $80K to the seller then he can give back the other $6.5K to my Fiancee and draw the corresponding papers. So the seller is the one that has to fill out the form #4, then I will take a copy of it with me along with the deed to Banco de Republica and register the property. I hope I got close this time. Thanks guys. I really appreciate this. Is not so easy to buy in Colombia if your money is in US. I got a property in North Carolina two years ago while I was there for vacationing and seeing family and all I did was to call my bank here in PR and they wired the money to a trust account in NC. The next day I sent a fax to confirm the withdrawing of the money. It was very easy. I have two other properties here in PR if anyone is interested.

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