Chile Forum

It seems from reading some of the replies that transferring cash in to Chile is hard. My partner and i (she is Chilean, living in the uk) are looking to purchase a property. Can anyone help with what is the easiest and cheapest way of doing this?

many thanks

Nigel

1st question Nigel, do you already have a bank account and a RUT? I assume she does at least. After that, you may need to show the bank manager your UK tax returns etc to show that the money was honestly earned. Wire transfer, then I think you're done.

Well for simply buying the property, you don't need an account in Chile because you will be transferring the money into the seller's account.
I have owned property in Chile for 10 years and don't have an account there yet . . . just withdraw from my USA account at the ATM . . . but I haven't needed to spend much there yet. . . . I know that eventually I will have to open an account.

OK Passport, you trusted the seller more than I did. To each his own.

Actually I'm in this situation now i.e. need to pay for a property. I really prefer to wire the money directly (from abroad) to the seller which in this case is a major construction company (Desco). It is more convenient to bypass the detour of my chilean bank account because of time and transaction fees (the seller accepts USD or EUR). I cannot imagine there would be any risk in this. Am I wrong? How is this exchange of payment vs legal ownership of the property normally done?

I used an local Chilean abogado for the closing and was assisted in the money transfer by my business attorney in the US who is well experienced in international transactions. I provided him with a certified translation of the purchase agreement and asked him to review it and make any changes needed to protect my interest. The resulting document was reviewed by both party's attorneys in Chile and the closing took place smoothly.
Furthermore, you can choose an abogado in Chile who is a member of AMCHAM, the American-Chilean Chamber of Commerce. They follow standardized procedures for commercial transactions, which is their daily fare. Also, ask about including a requirement in the contract that dispute resolutions will be handled according to the procedures of the AAA - American Arbitration Association - an international arbitration forum which provides for mediation outside the arcane Chilean court system. I believe that AMCHAM has a similar set of procedures for that purpose.
Hiring these people will of course cost you a little more. But you will have some peace in knowing that your professionals are using the customary practices for business clients, who of course are not always physically present at closings.

If you want to be a do-it-yourselfer you can transfer the bucks down to your own account then walk it over to the closing table. I didn't have an account then and there was no easy way to open one especially considering the timetable.

If you like, PM me and I can give you the names and emails of my US atty who is an instructor for AAA, and Chilean law firm, who is a founding member of AMCHAM.

PP brought the magic "abogado" word up. I had one and was also very hands on throughout with the result that structural defects that were undisclosed are now covered through a 10% retention I had my atty write in. If you're just buying a lot then perhaps this won't matter but I buy/sell a lot of property and sleep better when I am in the thick of it.

Interesting. Can you post a translation of that 10% retention clause?
Any trouble getting sellers to agree?

I inspected the property and noticed that there were several defects that the seller had not disclosed and upon questioning, didn't admit to. He mentioned that there were a few projects that needed completion that he planned to attend to. I had the atty write in a 10% retention clause with the 90% payable only after title transfer, with the 10% payable after my satisfied inspection of "the work".
Needless to say, my inspection included the structural defects which had not been addressed. The place is now mine, with 10% in the notario's hands awaiting completion of the structural work, whereupon we will decide how much the seller will receive, based on the cost. Agree to it? Hail no, he was pissed, but when someone lies to my face, the gloves come off.
My Spanish is grade school stuff, trust me you really don't want me to even find that clause, never mind type it in.

This is the sort of work we handle for our clients all the time. My wife is a Chilean attorney that speaks English.

What you need is to be careful at the time of authorizing the wire transfer that you take in to account the gap between signing the buy / sell agreement and the time the title is registered. In some areas the registration is immediate, in others in can take weeks

What we typically do is write conditions to protect the buyer in to the contract to cover this.

You also need to keep in mind that the international money laundering laws will slow down the wire once it hits the Chilean banking system. The seller needs some insurance that they will get there money. We also typically write this in to the contract. Most sellers are fine with waiting a few days for the transfer to clear, as long as they can see the same day that the money has hit the banking system.

We include all of this as part of our standard package of legal services for property purchase in Chile, among other things.

In terms of inspection, we also have construction engineers we can send to do inspections on buildings when you are deciding to buy.

Hi Nigel....

It appears we share similar interests. My wife is also Chilean and we are also in the process of preparing to buy a property in Chile. You might be intersted to know that Barclays Bank only charge £ 20.00 for a transfer from a Barclays u.k account to another bank account anywhere in the world. I guess you can ask your bank if they do the same and I expect your wife has a Chilean account. This is the route I think we will take to get our money over there....I havent looked into it fully but it all seems quite easy. Where are you thinking buying??

Regarding fees to transfer from foreign bank to chilean bank ... the high fees occurs on the chilean side, at least in my case. When transferring from Sweden the fee is a fixed fee (regardless of amount) of about USD20. On the receiving end the fee structure looks like this (Banco Itau):

8.001 a 10.000 0,30%
10.001 a 25.000 0,25%
25.001 a 50.000 0,25%
50.001 a 100.000 0,15%
Up 100.000 0,10%

Also, one thing to pay attention to is that even if you send the money such that the sender of the money pays both sending bank fees and receiving bank fees, the chilean bank may ignore this and still take out the fees. This is a violation of the "interbank" agreements. In my case I always send the money so that I pay all fees on the swedish side and my bank in Sweden is nice enough to always refund me the chilean bank fees (and they are very annoyed with the chilean bank every time).

yea, the fee flag game is one we go through with the banks all the time in Chile.

Make sure to get a copy of the wire transfer from your bank showing the paid flag. They will be a pain about it, but eventually give it up.

I should also add that with money in Chile, on a regular property purchase, what you do is put the money in to a "vale vista" or bank counter check and then deposit that at the Notary with instructions for its release. Much like an escrow account.

Does anyone know if there are Chilean Banks that has offices in the US?

Banco de Chile (which is now jointly owned by Citibank) has offices in New York and Miami.