First, allow me to introduce myself as well as tell a little of my situation. My name is Ralph and I'm a 41 year old American that has been living in northeast Brazil for close to a decade. I'm a partner in a development company along with three English partners that has built one project here in the northeast of Brazil and we're in the process of building the second.

I originally came to Brazil over a decade ago after meeting my current ex-brazilian wife in Cancun, Mexico, and fell in love with the place. I've been living in Aracaju, Sergipe for nearly a decade and convinced my current partners to invest in Brazil four years ago. It has been a roller-coaster ride to say the least, but I have certainly gained a Ph.D. about investing in Brazil covering every aspect I can think of. We have purchased lands here in Brazil, beachfront(which are even more beurocratic than others which aren't), we have constructed a project, we have negotiated to buy businesses, and have brokered the sale of a business. I'm extremely well-informed on the legalities and the "caminho", or path that one must take when investing in Brazil to make a "safe" investment.

The first and most important thing I would like to point out to foreign investors in Brazil, and the place where I have seen those get into the most trouble is the following.....

You NEVER make any type of payment for a Brazilian property to any person or entity that is NOT located inside Brazil!

Now, the English property agents just HATE to hear the above. But nothing could be truer. First of all, when one purchases in Brazil, that person or investor, must send his funds to Brazil. Either directly to the seller, builder, etc., OR, send it to himself, normally via his brazilian business that he can open up. The reasons for this are two-fold at a minimum.

First: Currently a $50,000 dollar (american) investment is required in Brazil to qualify for an "investors visa". This visa will allow you to live in Brazil is one so desires. It definitely eliminates the hassle of worrying about how long one is going to stay, leaving the country and coming back, going to the Federal Police to renew your visa, etc, etc. One certainly cannot qualify for this visa if one doesn't have record of investing monies in brazil. And if one pays an agent located outside of Brazil then Banco Central has NO RECORD of the actual investor sending monies to Brazil.

Second: This is by far the most important reason. If the investor doesn't send his monies to Brazil him/herself, either to his brazilian business making his investment via it, or directly to the builder, seller, etc., liquidating the funds via your contract of buy and sell, then Banco Central (The federal reserve) absolutely has NO RECORD of you ever sending money to brazil! So, if/when it comes time to sell, and you want to reinvest your money in Spain, or Germany, or England, or the U.S., or wherever outside of Brazil......how do you get your money out?!

Banco Central is NOT going to allow one to send 100,000 reais or more, or even less, out of Brazil when they have NO RECORD of you sending money to the country! This is what property agents neglect to tell investors in England about investing in brazil! One reason why is because they're wanting to get their hands on the monies FIRST. Most are taking ridiculous commisssions and in some cases have completely fled with monies leaving the customers "holding the bag", so to speak.

I could literally write a book on the topic of investing, and living, in Brazil. It's been quite an education for me, not a cheap one I might add. But today, I can truthfully say, that I'm 100% aware of how one must go about investing in Brazil. It's not easy. There are many hoops one must jump through. Unfortunately Brazil is an EXTREMELY beaurocratic country.

So, for those foreign investors looking to invest in Brazil.....BEWARE!! When you see a property agent and he's asking you to give him a downpayment or any type of payment there in England, or whatever other country besides Brazil.....DON'T DO IT!

Ralph, You are going to "scare the shxx" out of a lot of people on here that have already made down payments! My guess is that these downpayments, if paid offshore are in effect the Agents commissions. But I know what you are saying, Brazil seems no different to the way Spain and Portugal was 25 years ago in terms of paperwork and currency control. Every time I go to Brazil I see attitudes, behaviour and culture that I saw 30 years ago in Spain/Portugal. Even today Portugal hasn't changed so much..Spain is very progressive. But, they changed and liberalised (mainly due to EC Membership) and although Brazil moves slowly they will also have to change to meet the economic growth they are looking for. It is just not practical for their economy to grow and receive external investment unless they free up their Banking system. Sooner or later they will have to decide if they really want to become a major economy and if they decide yes, then the banking and burocracy has to be changed..otherwise foreign investment will just walk away and invest elsewhere where it is easier. You can see this very situation with the flight access which is controlled and limited as a cartel...these are old fashioned ways and eventually it will have to change in all aspects.

Hi Ralph, nice post but as GW said it does scare the hell outa you!

Ralph, paying money to our lawyer who then pays the developer via banco de brasil on our behalf is normal isn't it? and this records the transaction in our name?

hmmm

Agree 100% GW...but the fact remains today that Brazil is extremely beaurocratic, and beaurocratic to the point of ridiculous.

As far as scaring the **** out of people.....GOOD! I would rather scare the **** out of them after they've made an initial investment than after they've paid 40-50, or 100K sterling!

There is currently a beachfront housing development 4 kilometers from where I am living at the moment. I built a large house in an existing condominium here in Aracaju. Bought the lot, contracted the architect, the engineer, and organized the entire project from lawyers and accountants to bricklayers and backhoes. This project that is 4 kilometers from me is called Viva Vida. It was built by a gentleman named Marcos Mattos and was sold to the english via a gentleman named Howard Davis in England and also a brazilian by the name of Joaquim. Seventy homes were built and 33 were sold to the english.

Approximately one year ago I had the pleasure of meeting two of the english homeowners. They had paid for their properties 2-3 years ago in many cases and have yet to this day to get their deeds!! They asked me for my help and I took them to my lawyer. I have excellent lawyers btw and excellent connections here in Brazil...even on a national scale. One of our lawyers, and my best friend here in Brazil, his brother is the national president of the OAB and his uncle is a brazilian minister. They are a very honest family, people....something that is not easy to find for many "gringos" here in Brazil.

After some research the first thing both my lawyer and I found was that the english had been charged anywhere from 50% to 150% more than the brazilians that purchased properties in the same condominium!!! Now, let me preface this by saying that all the english bought furniture packages and the brazilians didnt....but this furniture costs around 5,000 to 7500 reais....NOT 75,000!! Then we go to the builder, Mr. Mattos. Well he tells us that he's never been paid for the "deeds", which was a 10,000 reais charge btw. Deeds are not a fixed amount!! They are a percentage of your purchase price or evaluation price placed by the local gov't. The catch was this 10,000 reais for the deeds had already been paid by all the english two years ago and more to Howard Davis!!

So now we have a situation of "he said, she said". Yet another reason why you NEVER pay an agent in England for a Brazilian property!

If the money left your account in England and was paid to an entity in Brazil you should be ok. One thing to remember as well. The contract that is valid here in Brazil is the one in portuguese! Don't rely on the seller to translate it for you....get a third, independant party!

Nick,

It does record the transaction in your name as the lawyer operates a special bank account which can send money on your behalf in your name, which means the banks are happy.

Rob.

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Brazil Property | Pipa Brazil | Property Investment in Brazil

Ralph, I agree entirely with you but frankly you are "pushing water up hill" as many alleged investors go the off plan offshore route because they are not willing or able to go and do it for themselves. Offplan has become a "get rich quick" concept which many people believe and some indeed have made money..why because world markets have been increasing for nearly 10 years sothe concept works..now world markets are dropping and this is when the concept starts to collapse. At first it is a trickle, but my belief is that a flood is just round the corner! My view is only deal with a local agent and local lawyer and go there yourself....but many won't do it as they think they have discovered a profitable business that doesn't require hard wrok and hassle!

It better be from the investors bank account Rob. Banco Central doesn't play games here in brazil...believe me, I know. Either does Receipta Federal...they're one of the only entities in this country that people respect and fear.

And about the situation at Viva Vida for the 33 english homeowerns...they paid all their monies to an agent in England!!

Now, how do they get their money out???

Answer: They don't!

How do they get their investors visa??

Answer: They'll have to invest another $50,000 the right way!

Oh no, it is an American version of GW

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Brazil Property | Pipa Brazil | Property Investment in Brazil

Haha we are all doomed! Oh and I think these days all reputable agents inform their clients that the money has to be registered via the central bank upon entering the country, but is a valid point of course.

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Yes, I work for a Real Estate company doing market research and analysis but I'm not involved in sales.

Have a nice day