banking - Money Transfers In Argentina - Banking, Law And Real Estate Investment

Transferring money to Argentina (a second-world country) isn't as simple as it is in the U.S. or Europe. The people of Argentina don't believe in the banks after the peso devaluation in December of 2001. Western Union has a low limit, so they're not an option. And I definitely wouldn't advocate that you bring $100,000 in your carry-on luggage. I recommend that you demonstrate "proof of origin" for the funds that you're transferring into Argentina (W-2 forms, 1040, etc) because the government is beginning to regulate the influx of money. The AFIP (equivalent to the U.S.'s IRS) has the authority to audit you, and you need to be careful so that you don't have problems when you sell the property in the future. Transfer fees are usually between 1-3%, depending upon how you transfer your money. You can use "money exchanges," which are technically illegal, but used regularly by the locals and foreigners. Or, you can use the Central Bank, which is the safest way, and the most costly. There is new legislation scheduled for March 2007 to mandate that all real estate purchases are conducted by: check, bank wire or some other method, except CASH. The reason for this is that many locals buy/sell properties and change the recorded purchase price by 30-50%. This limits the amount of income taxes that people pay on the sales price and the amount of property taxes the new owner pays the government. The government is losing millions of dollars every year in lost revenue. Tax evasion is a common practice in Argentina. I do not advocate this practice due to the risks its poses for my clients. Fines can be exorbitant, and when investing in a foreign country, risk mitigation is important. Currently, the government is worried about money laundering, as well as looking for more ways to increase tax revenues. So, consult a lawyer and a banker when you're serious about investing in Argentina. Opening a Bank Account in Argentina The majority of the foreign banks left Argentina in December of 2001. The crisis prompted the people to march in the street, and the banks ran home with their tails between their legs. Now, if you go to a local bank in Buenos Aires, it's not uncommon to see a half-dozen security guards and/or policeman. Argentina is serious about the safety of their financial institutions and is trying to rectify its international image. A bank account in Argentina will help you manage your property from overseas. Opening a bank account in Argentina is more difficult than most foreigners expect. By law, the requirement to open a savings account is a CID (tax ID number), an address certificate and a Passport. But many banks have stricter requirements. If you have an account with HSBC, CitiBank, BankBoston or BBV in the U.S. or Europe, they will generally open an account for you in Argentina. Or, if you're referred to them by a current customer, they will speak with you. Banco Naci'n, http://www.nacion.com.ar, opens accounts to foreign non-residents requiring only the CDI (tax ID), address certificate and Passport. The minimal deposit is $50 pesos and they charge a maintenance fee of $3 pesos. Important things to inquire about: online banking, maintenance fees, wire transfers, minimum deposits, debit/credit cards Nancy Landi and Christian DeBlis formed Nancy Landi International with a focus on the Buenos Aires real estate market. We provide rental properties, property management services and real estate investment expertise. Nancy Landi International has developed partnerships, locally and globally, to serve the needs of our unique client'le. We have relationships with real estate developers, lawyers, accountants, translators, wineries and many other individuals and organizations to make your stay exquisite. Nancy Landi International represents select properties for rent and investment at this time. The NLI team can help you locate distinguished properties for investment and guide you through the process. Our vision is to exceed your expectations. Nancy Landi International: http://www.NancyLandi.com Buenos Aires Investment Blog: http://buenosairesinvestment.blogspot.com/ LinkedIn Professional Profile: http://www.LinkedIn.com/in/ChristianDeBlis Article Source:http://EzineArticles.com/?expert=Christian_DeBlis banking - Inflation Or Deflation - Which One Is Worse? Which One Lies Ahead? Surely inflation is our greater enemy, isn't it? Rising prices are bad for the economy. Falling prices are a good thing, aren't they? Inflation and deflation are due more to mindset than anything else. Let me explain. Whether you realize it or not, you are infected with inflation mentality, which goes back to at least the 1970s. I can illustrate that for you: Let's say your favorite loaf of bread at your local store costs $3 today. If you go back to that same store in ten years time and are able to buy a loaf of bread identical to today's, how much will you pay? Will it still cost $3 or will you pay more or less than $3? Did you answer more? Why? Because you are conditioned to assuming that prices will keep rising. You would not have answered that way in 1937 and you probably would not answer that way today in Japan, where prices have been falling for many years. What's wrong with that? It's true that inflation erodes the purchasing power of money, but as long as your income keeps up, rising prices are not the end of the world, are they? There is a consequence of inflation that is far more sinister than the erosion of purchasing power and you are not even aware of it. Inflation sucks you into debt. Let me illustrate that for you as well: Your car is three years old and you want to replace it, but you would rather wait another year. The new model costs $25,000, but you expect it could be $30,000 in a year's time. Will you wait another year and save up a further $5,000 cash, or will you go into debt and buy it now? You will almost certainly borrow and buy the new auto now, won't you? Why? Because you expect the price to rise. You go into more debt because of inflation. And you are infected with inflation mentality, which is the cause of the crazy, unsustainable debt bubble today. When you borrow that money from the bank, it is injected into the economy, increasing the money supply and fuelling yet more growth in consumer spending and thus the economy (and probably prices). Now let's reverse that situation. Let's say you believe the price of that new auto you want will be lower next year. Say $20,000. Now will you be in such a hurry to buy it? No. You will almost certainly wait. And let's say in 12 months time you expect the price to fall even further in the following 12 months, say to $15,000? Chances are you will make the old jalopy last yet another year. But you will not be the only person thinking this way. Everybody will be putting off buying a new car. To such an extent that auto makers, who have failed to increase sales, even by slashing prices, have to scale back production and lay off employees. And if auto workers lose their jobs, will they be able to spend as much on shoes and clothes and restaurants and gadgets? No. But stores need cash flow to pay their rent and wages, so "50% off" sales appear everywhere. But even they do not work, and retail stores also have to shed staff. And the more prices fall the more the consumer expects them to fall, so the more they put off buying everything that is not absolutely urgent. And so the economy begins to contract and unemployment rises, all because of deflation mentality. The lifeblood of an economy is consumer borrowing and spending, which is fuelled by the ready availability of money. When the mindset changes from inflation mentality to deflation mentality, people not only stop spending. They stop borrowing. In fact, reckless abandon changes to conservatism, and they even try and speed up the repayment of loans they already have. This disappears money from the economy back to the banks from whence it came, and so reduces money supply. And thus the economy spirals down into a deflationary recession or even worse. Every depression in history has been accompanied by deflation, not inflation. In the 1930s, was there any shortage of goods? Not at all. Stores were fully stocked. Was there any shortage of manpower? Hardly. Unemployment reached 25%. So what caused the depression? What was in short supply? Only one thing. Money. And the only way money comes into existence is by way of a loan from a bank. When people are reducing their indebtedness rather than increasing it, money supply shrinks and the economy contracts. Interest rates can be reduced to zero (as in Japan in recent years), but if people lose the courage and the capacity to take on more debt, they will not borrow. This is called "pushing money on a string." In my book "How to Profit from the Coming Great Depression" one entire chapter is devoted to this subject of deflation. You will learn why the coming downturn is inevitable and what you can do to escape the most serious consequences.