New limit for money on travel and transfers to and from abroad; understand the new exchange rate mark

The website Money Times published a report explaining the changes introduced with the new exchange rate framework. Dr. Marcos Catão, partner in the tax area at Maneira Advogados, was interviewed to talk about the topic.

New limit for money on travel and transfers to and from abroad; understand the new exchange rate framework

By Matheus Caselato
05/01/2023

The new exchange rate framework came into force on January 1st, a law that regulates the national exchange market, Brazilian capital abroad, resources entering the country and the provision of information to the Central Bank.

The change in regulation aims to make international transactions simpler to benefit the country's activities in foreign trade.

The new measure not only works with exporters and importers, but also has an impact on international travel and remittances of resources abroad.

Foreign exchange operations, now with new regulations, are transactions that involve the purchase or sale of foreign currencies for different purposes, which can be carried out between two countries, for international travel or as sending and receiving amounts from abroad.

The new exchange rate mark

Exchange mark is a mechanism created to facilitate transactions in foreign currencies for individuals and legal entities. The new legislation modernizes and updates the rules that regulate the movement of money from Brazil to abroad and currency conversion.

With the new legislation, for example, negotiation between individuals is permitted up to a limit of US$500, an operation previously only permitted with banks, as explained by Pedro Tinoco, partner at Almeida Advogados and specialist in Intellectual Property, Business, Contract and Electronic Law.

“Relevant innovations introduced by the new exchange rate framework were the permission for the purchase and sale of foreign currency between individuals up to the limit of USD500, as long as the money is necessarily in cash, and the express provision on the competence of BACEN to regulate accounts in foreign currencies, the responsibility of which until then was the responsibility of the National Monetary Council (CNM).”

The new exchange rate framework will also bring changes to foreign trade, international travel and accounts outside the country.

New cash limit on international travel

The new law increases the cash limit that each person can carry on international trips, going from the current R$10,000 to US$10,000. Measure that applies to both those leaving Brazil and those arriving in the country.

Marcelo Pádua, partner at Cascione Advogados, highlights that other measures still need to be regularized.

“Although the BCB has regulated most of the innovations and changes brought about by the New Foreign Exchange Legal Framework, some important points of the legislation are still pending regulation, in particular the provisions related to interbank foreign exchange operations, private clearing of credits, elimination of deadlines for settlement of foreign exchange operations and new situations foreseen by the National Monetary Council (CMN) in relation to the stipulation of payment in foreign currency of obligations enforceable in the territory national.”

Opening dollar accounts in Brazil

The new exchange rate framework allows financial institutions to directly open accounts in other currencies through the Central Bank. This authorization will also be extended to strategic sectors of the economy, such as energy, oil and gas.

Partner of the Tax area at Maneira Advogados and professor at the Universidad Complutense de Madrid, Marcos Catão explains that the measure will increase the competitiveness of the sector, bringing benefits to the user.

“The foreign exchange market will have new players and no longer just international banks or brokers, notably fintechs that do not have a physical presence. This will increase competition in the foreign exchange market and reduce the spread (gain) of brokers and banks when buying and selling foreign currency, which will make the purchase value of the currency lower for the end consumer (individual or legal entity)”, explains the professor, who also highlights the possibility of individuals having a foreign currency account in the country or in real outside Brazil.

“Maintaining accounts in Brazil in currencies other than the real. It is currently only possible for some companies in some sectors (e.g. oil and aviation companies). With the new rules, the range of cases in which it will be possible to have accounts in Brazil in foreign currency will increase”, he defines.

https://www.moneytimes.com.br/novo-limite-para-dinheiro-em-viagens-e-transferencias-para-e-do-exterior-entenda-o-novo-marco-cambial/