Opening a bank account - Part I
Posted by urufish on June 22, 2007
For most banks in Uruguay, (with the exception of most local banks like the BROU), there is one set of rules for American residents and another for everyone else. For instance, you can NOT, EVER open a bank account in most international banks here if you are a US citizen, resident or resident alien. This isn’t an opinion or an observation. Its the law, as set by the DGI.
Most international banks in Uruguay shield all of their clients information with Uruguay’s bank secrecy laws. These laws allow the banks to deny inquiries for any information about their clients with the exclusion of a criminal warrant, given by the courts where there is proof of criminal behaviour, (eg. money laundering or fraud). Your information will not be released to a taxation agency like the IRS or CRA. When an international bank operates in a country where secrecy laws shield clients AND they elect to apply those laws to ALL clients, without exception, they sign an agreement with the IRS pledging to refuse to open accounts for anyone presenting a US passport or where their birth, citizenship or residency is listed on a different identity document, (eg. the back of the Cedula).
Furthermore, ALL clients are required to sign a W8 or W9. With the W8, you swear that you’re not any of the above, nor are you ‘fronting’ for someone who is, under pain of criminal prosecution for perjury. If you are one of the above, you sign a W9, which authorizes the bank to notify the IRS you opened an account here and allows the IRS to query the bank for all pertinent information about your account any time in the future they decide you’re a person of interest to them.
The process of opening an account in a foreign bank is not as simple as it is up north, but it’s not prohibitive. You need your proof of identity, (passport or cedula) and references from your old bank (or a ‘good word’ from a current client) and 5 references in Uruguay. (Dont be put off by that.. any one person in Uruguay can rustle up 4 other names for yo as a refernce). Then you sign several forms (see below), and you should make a small deosit in CASH, but yes, you CAN deposit a cheque. You may not want to do that, (see previous post), but yes, you can do it.
Most international banks will let you setup accounts in major currencies. I deal with the ABN Amro and highly recommend them. I was directed to them by my friend. He took me in and sliced through all the red tape in a few minutes. 30 years of banking experience can do that for you. Next week I’m opening up an account by myself and we’ll see how well I do :).
If you’re not fluent in Spanish, you must find a branch with a person fluent in English. Banking is just too important to leave to chance. The ABN in Pocitos on 21 de Setiembre is one. The Discount bank has fluent, english staff in Ciuded Vieja. My rep at ABN worked a few years in the Pacific North-West. Her English is perfect and, just as important, she understands how we do things up North. Whenever the bank’s policy here differs with what northerners are used to, she already knows its coming, explains why it’s different, explains it or apologizes for it.
At the ABN, (I assume this is true of all international banks), you can have multiple currencies. I keep 3 savings accounts; pesos, USD and CAD. The reason for the CAD is to be able to deposit cheques from home, (like income tax refunds), without having to change the money to pesos or USD.
Chequing accounts are also avaialble. The ABN wouldn’t give me one immediately, when I opened up the account. They said we needed to ‘prove’ ourselves first. After they see some account activity and how responsible we are as customers, after a number of months, we could apply for a checking account. Keep in mind, we originally opened the account as tourists–not as residents. This may have had an impact, but not necessarily. Banks here are very somber IN THE BEGINING. Once you’re a customer for a few months, you become family. Then you can kiss your account rep when you greet them, (yes, we really do that).
ABN application form
The ‘infamous’ W8 form in English and Spanish
The following is all the pertinent pages from the rule booklet that include all the rules of the bank. I thought this was a booklet you get to keep as a reference. You certainly can ask for a copy to keep, but the one they give you includes a section for you to sign at the back (see last page below) and the entire booklet is kept in your file, to prove you read and agreed to the rules. Interesting eh?
June 23, 2007 at 12:59 am
Why not open an account with BROU? It is simple, easy, and with excellent service. American passport - cedula or not - is good enough. Not many questions asked if at all beyond your address and telephone number.
Good luck.
June 23, 2007 at 1:26 am
When it came time to open a bank account, I asked my friend, an exec with Banco Comercial which bank he thought was best for someone from NA and he said, anything but BROU (and Banco Commercial). Compared to the foreign banks, the facilities and services are not at the same level. If you need additinal services like a mortgage, loan, or even want to buy CD’s, it’s not up to par, nor does it have the assets, of the internationals. At that time, all foreign banks had guaranteed fluency in English in at least one branch in Montevideo. Dont know what BROU’s official position is w.r.t. service in English.
Anyway, it’s kind of a moot point if you only have a US passport or can’t say you’re not a resident of the US. You cant open an account anywhere else. BROU is the only game in town. Whereas if you’re a resident/citizen of any other country in the world, you have the choice of any bank in the country.
June 23, 2007 at 8:59 am
Irv, opening an account in most baks (other than BROU) is not easy, even for people from other countries My brother (a Brazilian) could NOT open an account at HSBC, even though he had an account in excellent standing with the same bank in Brazil and had a lot of money to deposit. My brother in law, on the other hand, was able to open an account in that bank by providing proof he was a doctor, plus paycheck stubs and a few other docs.
June 23, 2007 at 1:20 pm
That’s because he picked the TOUGHEST bank in Uruguay. The HSBC sees itself as an ‘investment bank’. It’s interest is in investors. If you go in and plunk down $100K on a CD or TBill (probably not if your an american), they will smile and open an account for you.
I went to the central with my lawyer. They took me upstairs to a gorgeous board room, served me tea on Royal Dalton, spoke impeccable english and literally looked down their nose on me when I told them my interest was in just opening an account. I didn’t pursue it mostly because of the attitude. Now, if I went there when I came to live here and used them as one of my investment houses, I’d have no problem.
When I talk about foreign banks, I mean the big 3. The ones with lots of branches. Discount, ABN and ITAU (your hometown bank). From what I understand, most if not all of these are in Punta Del Este, the centro and barrios like Pocitos, Carrasco, New Pocitos, Malvin, Buceo, etc.
June 23, 2007 at 1:40 pm
Laurel, I dug into your question a little more this morning. Uruguay is not the USA or Canada or Britain, France, Australia, Germany, etc. The economies of the 2nd or 3rd world are not as stable and you have to get your head around the fact that there really is no guarantee of anything here.
I’ve been here through 3 major crises. The last one touched the banking system. People here really were scared. Assets were frozen. Uruguay sits next to Argentina where it was even worse. I was at the airport in BA, the day they rioted in the parliament. I had a person come up to me and offer a thousand dollars for my ticket to Montevideo. I saw, with my own eyes, people carrying huge amounts of cash with them. Interestingly enough, they were going to guess where??? Uruguay. To do what? To PUT THE MONEY IN FOREIGN BANKS HERE. Draw your own conclusions.
I would sum it up this way. If all you want to do is have an account so you can transfer money for living expenses, have an ATM card for daily life and get a local credit card and dont need a north american style web banking, BROU is just fine.
July 2, 2007 at 4:29 pm
Urufish said “references from your old bank and 2 or 3 people,” what kind of references from your old bank (in canada i presume) did you have?
juan
July 2, 2007 at 5:46 pm
Honestly, I didn’t produce any references. I had the advantage of a friend with me who was a bank exec. He cut through the red tape for me.
Tomorrow (couldnt go today..GOT TO PLAY GOLF FOR FIRST TIME SINCE I LEFT CANADA–yippee) I want to have a meeting with my bank rep. I asked her to write up a shopping list of exactly what is avaialble to us expats and exactly what they need from us.
July 5, 2007 at 12:35 am
Finally got to sit with the ABN today and go over several issues.
The first, under what circumstances can an American open an account with ABN. The answer - never. ABN is one of several international banks here in Uruguay that apply Uruguay’s bank secrecy laws to ALL accounts. Unlike some banks, (like BROU), they will not report client information to the IRS under any circumstances, nor can the IRS require them to do so. These banks signed agreements with the IRS that they will not open accounts for American citizens or residents, alien or otherwise. Some banks, like the BROU, allow clients to opt out of the secrecy laws. You sign a W9 form and your activity is reported to the IRS on a regular basis. I will modify the post (above) accordingly.
Banks like the ABN will open an account for you on presentation of your cedula (as long as it doesn’t show the USA on the back) or a non US passport. You need to fill out the appropriate forms (see above), and you have an account.
July 5, 2007 at 12:38 am
The answer to the question about references from your old bank is you dont need them. If you go there with an ABN account holder (like me) and we get a few people to say they know you (like hello, my name is ….), they will open an account for you. No problem. You just have to understand this is how the system works.
July 5, 2007 at 11:11 am
Thanks for digging that information up. The piece about the deal between ABN-Amro and the IRS is golden!
For those with dual nationality, like myself, it may actually be better to apply for permanent residency in Uruguay as a non-American. You will have greater flexibility. Who would have thunk.
About the references, I think you mean to say that you DO need them, but alternatively you can have other account holders vouch for you instead. Or did you mean to say that the referral system is the ONLY way to open an account?
July 5, 2007 at 12:16 pm
I am going to edit my comment where it says…
—-Banks like the ABN will open an account for you on presentation of your cedula (as long as it doesn’t show the USA on the back) or a non US passport. You need to fill out the appropriate forms (see above), and you have an account—
to avoid giving the impression that this means you’re Scott free. You still have to sign the W8 form, which would mean (in the words written on the W8 form), you are perjuring yourself if you’re a US citizen, resident or resident-alien, regardless which passport you apply with or what your Cedula shows as your citizenship.
Most banks and investment houses throughout the world, require all applicants to sign a W8 if you say you hold no official status with the USA. If you do, you sign a W9 and your activity is now avaialble to Tio Sam.
In this regard, I am glad I never applied for US residency. I wonder if that’s why emmigrants who were able to qualify for US residency chose Canada instead? You’d think Americans would have more freedom of choice than any other nationality in the world.
July 5, 2007 at 6:12 pm
Did you have to fill out and sign a W8?
July 5, 2007 at 6:13 pm
I edited the original post and added the W8 scan today. You can see where you sign that this is a pretty onerous document. Serious stuff.
July 5, 2007 at 6:29 pm
Yes, I filled out the W8 not just once, but twice… I’ll update the post with this information later..
Every single client, and I believe this applies to Uruguayan citizens too, fill in a W8 as part of the account setup process.
Stop and think about that one for a second… a country that is so powerful that their laws are enforced in soverign nations around the world - at the level of the average person using a bank.. Awesome… I said the IRS was stronger than all US armed forces combined… Wasn’t kidding eh?
That isn’t all. When the W8 form changes, the bank’s policy is to notify all account holders to come in and sign the new form. I believe the last change was last year. I know because when I went to purchase Tbills earlier this year, they had me sign another W8. I thought it was a different division, but my rep says, no. That W8 was for all my dealings with them.
Based on what my rep says, she believes this is required at all banks.. including the BROU… I believe it’s the W8 (or W9) that allows the BROU to open accounts for Americans. There is one other possibility. That because the BROU is a local bank, with no operations in the US, that it isn’t subject to pressure from the IRS, but somehow I doubt that Uruguay would ‘piss in the IRS’s cornflakes’ for fun. I’ll ask in the Southron forum if anyone remembers signing a W8 at the BROU.
July 5, 2007 at 6:30 pm
Forgot to expand on the ‘twice’. The ABN requires ALL clients to sign a new W8 whenever the US updates the form.
My first W8 was in 2005. The W8 was revised in 2006. The first time I was in the bank usnig financial services after that, they asked me to sign the new version.
July 5, 2007 at 6:58 pm
I have a hard time believing that ALL Uruguayan banks would require all UY citizens to sign a form written in English that they would not have any idea what’s in it or what they are agreeing to.
I don’t believe it!!!
July 5, 2007 at 7:01 pm
I didn’t post the Spanish version.
I dont know if this is true of all banks in Uruguay…
It should be true of all banks that operate in the US..
Since BROU doesn’t have a division in the US, perhaps they dont require the form to be signed.
I have to find that out next time I’m at a BROU.
Hopefully early next week.
July 5, 2007 at 7:07 pm
OK.. I posted the Esp version.
July 5, 2007 at 7:08 pm
Thanks urufish for getting to the bottom of this.
Many of us are very curious to see where the power of the IRS ends.
July 5, 2007 at 7:18 pm
I think we all agree that for the time being, it’s restricted to planet earth and the internet.
July 7, 2007 at 1:10 pm
Good news for those holding non American passports EVEN if you are/were an American citizen or resident. You can open an account at the BROU on the non-American passport and they will NOT require you to sign any kind of declaration whatsoever (eg. W8 or W9). They do not want to see any of your US documents. They will not record your US status. They do not record your social security number.
I hope to find out if the process changes if you open an account with a US passport. Also will ask whether BROU has any agreement whatsoever with the IRS to report any kind of information whatsoever to the IRS at all.
There’s a very good chance because the BROU (and other local Uruguayan banks) does not operate outside Uruguay, they’re not subject to pressure from the IRS.
July 7, 2007 at 2:44 pm
Thanks Irv, great work! Hopefully over time, with the help of other expats, we can map out which banks require W8 from non-American passports and which ones don’t.
July 9, 2007 at 12:26 pm
want to stop the power of the IRS? suport ron paul for president - he wants to eliminate the IRS.
juan
July 9, 2007 at 8:55 pm
I know life isn’t fair but if someone has actually moved here, lock stock and barrel. Has for all intents and purposes, left the USA, for real.. not as a tax evasion tool, the IRS should leave us alone.
Canada’s IRS (The CRA), is reasonable in this regard. If you really have gone–taken your family to live somewhere else, have no principal residence left back home, do not regularly or frequently go back home, give up all (or most) of your connections (eg. club memberships, AAA account, etc) and liquidate your govt registered retirement savings plans, they will allow you to become a ‘non-resident’ for tax purposes. Let’s face it, you’re no longer benefiting from your tax contributions, so there’s no logical reason for taxing you.
September 22, 2007 at 11:34 am
One more datum: When I opened an account at BROU with my US passport, I was not required to sign a W8.
May 31, 2008 at 9:29 pm
Does anyone have an idea the turnaround time to bank wire/transfer money from a uruguay account to a business account in Canada?
Is this a simple uncomplicated safe process, unlike in Buenos Aires where it is not illegal but nevertheless impossible.