Learning Uruguay

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Opening a bank account – Part II – American citizen/resident

Posted by urufish on July 7, 2007

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If you’re an American or a resident American, you are either not able to or may not want to, open a bank account at the large, international banks here that have divisions, subsidiaries or financial interest in any bank doing business in the US.  That’s because the IRS requires these banks to report on  all US citizens/residents that open accounts outside the US via the use of a W9 or W8 form.  A non US citizen or resident fills out a W8, swearing you are neither of the above.  A US citizen or resident fills out a W9, authorizing the bank to pass information to the IRS.  There is one other choice.  The bank can choose to sign an agreement with the IRS wherein they promise they wont deal with American citizens or residents at all, period.   I kinow the ABN-Amro bank has chosen this option.    FuBarrio reports in his post on this subject ( http://www.fubarrio.com/2007/06/brouracracy-in-uruguay.html ) that CitiBank and Bank Boston also prohibit Americans from opening accounts.  Now that Bank Boston has been purchased by ITAU (Brazilian), it’s possible this policy is or will be changing. 

If you hold a valid passport from another country, you could open an account at one of these inernational banks, but you have to, (as the form states), perjure yourself on the W8 and that’s not a good idea. 

However, the Banco Republica Oriental del Uruguay (BROU), does welcome American citizens and residents, using their American or 2nd passport, without questions.  If you use your 2nd passport, they dont require you to sign a W8 form.  I beleive this is because the BROU (like other local Uruguayan banks), doesn’t operate in the USA and the IRS has no simple method of applying pressure on them to dig past the initial passport shown. 

Many Americans have gone to the BROU in the centro to open their accounts.  This is the ‘flagship’ location.  It looks like a turn of the century train station inside.  If you’re staying in Pocitos, Jose Galvan, at the branch at Avenida Brazil and Tomas Diago speaks fluent English, has an Idaho driver’s license and is a Uruguayan Wil Rogers.  

The documents at the end of this post are the only papers you sign to open an account under these circumstances.   Special thanks to Adrian and Sybil for letting me tag along yesterday and document the process end to end. 

In part III, we will go through this process on an American passport and see whether or not you are required to sign a W9.  Because of Uruguay’s bank secrecy laws, it would seem that if you dont sign a W9, the bank should not be able to release any information about you at all, unless, there’s some legislation that over-rides that for non-residents. 

The forms below (in order) are:  rules for savings accounts, signature form for savings account, rules for ATM card, initiation procedure to change your ATM’s PIN card for first-time use.  

account-rules-large.jpg  open-account-brou-001.jpg  atm-brou-large.jpg atm-card-initiation.jpg

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4 Responses to “Opening a bank account – Part II – American citizen/resident”

  1. Piet said

    I don’t get it. Is the issue about US taxation of income in Uruguay?

  2. urufish said

    No, not directly. This post only shows that account activity will not be automatically reported to the IRS if a non-American passport is used to open an account at BROU.
    There are 2 implications of this.
    1. If a US citizen or resident opens an account at the BROU on a foreign passport, the thing to remember is you wont be required to sign a W8 or W9. Without the latter being signed, the IRS wont be notified.
    2. If a non-American citizen or resident opens an account at the BROU on a non-American passport, they dont have to sign a W8. This is an important distinction. This means that a ‘friendly’ can open an account here on behalf of an American and isn’t required to ‘perjur’ himself in the process.
    Example: A non-American ‘friendly’ opens an account at a foreign bank, like the ABM, on behalf of an American citizen/resident, he has to sign a W8. One of the things you’re swearing to is you’re not opening an account for a ‘person of interest’ to the IRS.

  3. Futurexpat said

    Do savings accounts in Uruguay pay any sort of interest? It’s a pitiful amount here in the USA, although some online banks are now paying in the neighborhood of 5% and some of the “bricks & mortar” banks are beginning to feel the heat.

  4. urufish said

    Pitiful is an excellent choice of words. If I’m not mistaken, it’s 1% here on a savings account, applied to the ‘minimum’ balance during the month. They get you coming and going.
    I’m not a banker, but I assume this is a good source of revenue for them. They pay little or nothing to you, but ‘loan’ your money, every night (overnight interest). I dont know what the overnight interest rate is now, but considering the amount of money the bank is able to place, they must make a tidy profit.

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