“Kathleen, first of all, I wanted to share with you how much my wife and I enjoyed the conference in Orlando this September. It was incredibly informative and professional, as well as fun!
“Now for my question:
“We are not quite ready to purchase a residence yet, but we are very interested in Colombia and would like to transfer some money down there to take advantage of the exchange rate. Is it possible to open an account and transfer funds without taking a trip down there?
“Also, and this will show my ignorance of how exchanges work, I have a question regarding exchange rates. If we transfer funds and exchange dollars to Colombian pesos at the current rate of 3,000 COP per dollar and the rate later drops to, say, 2,000 COP per dollar, wouldn’t our exchange back to dollars then be worth a third less? Or am I missing something?”
–Robert S., United States
You won’t be able to open an account in Colombia without visiting. You won’t be able to open an account with a bank at all until you become a resident of the country. And, again, you’ll have to visit in person to open an account with a fiduciary company (these are like brokerage houses… think Schwab). You’ll need to present yourself in person, sign some documents in front of the fiduciary’s representative, and answer some questions as part of the know-your-client due diligence required of any financial institution in today’s world.
Once you have an account open, you can transfer funds long distance. That is, you don’t have to go in person every time you want to move money in or out of the account.
Regarding the exchange rates, use your example figures to find the answer to your question. If you buy US$1 worth of Colombian pesos today, you have 3,000 pesos. If the exchange rate moves to US$1 to 2,000 pesos, then you could buy your dollar back for just 2,000 pesos and you’d still have 1,000 pesos… or you could sell all of your pesos and you’d have US$1.50.
“Kathleen, we’re attending your seminar in Colombia in April, and, afterward, we may want to buy an apartment in Medellín.
“We want to send the money now and the right way, so that if we find what we want, we can pay and close and not have to go back and forth.
“However, if we don’t find what we want, we may want to take the money back out of the country.
“How to do this legally with the right person (lawyer, broker, etc.)?
“Also, if we stay long, I want to be able to draw some Colombian pesos from the account to live on.
“Please give me, if you can, a contact for arranging this, both the bank account and a rental for staying in while we’re in the country.”
–Joe Z., United States
You can’t open a bank account in Colombia long distance. You must visit the bank in person, meaning that, unfortunately, there’s no way for you to set up an account where you could wire money in advance of traveling to Colombia for the first time.
A brokerage company that offers personal accounts, our preferred attorney in this country, and our top real estate resources all will be participating in the conference in Medellín in April. You will be able to set up an account at the event, transfer money, and file all the appropriate forms to be sure you’re bringing funds into the country compliantly and should have no problem taking them out of the country when you want.
Meantime, for help finding a rental and to get a head start on your property search, you can reach our recommended agent in Medellín here.
Continue Reading: Buying Real Estate Overseas For Diversification