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NOVEDADES | Propiedades

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Oversear investors

What does a foreigner need if he is going to buy a real estate in Argentina ? If this money comes from an offshore bank account, what must be done ? - Sources: Escribanos H.  Wuille-Bille-Temporeti y  ReporteInmobiliario.com 

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First of all, it is esessential to have a valid passport. This will prove his identity to the notary who formalizes the title deed.

On the other hand, he will need to obtain his personal C.D.I. (Identification Password) at the A.F.I.P. (Federal Office for Public Revenues). For that purpose, he must go to his home´s nearest A.F.I.P. Office, having his passport with him. When applying for the C.D.I., A.F.I.P. will solicit that he names a resident representative, i.e. Argentine, for fiscal purposes purely, who will have to be registered with the AFIP.

This proceeding responds to Resolución General Nº 1375/02 (Article from AFIP General Regulation System) which provides information and regulation regarding any economic operation agreed between country residents and those acting as representatives of individuals or entities from abroad, whatever the nature of the transaction, even if no money is retributed.

It is worth noting -once again- that this representative is such only for fiscal purposes; therefore, the title deed can be formalized by the foreigner, who will have to present the notary with Form F º 663 auditted by A.F.I.P., which will provide data on the fiscal representative.

In case that the money to pay for the operation should come from an offshore account, Decreto 616/05 (Decree Law) must not be forgotten. This refers to regulation applied to deposits and outgoings of foreign currency in and from the local exhange market. It establishes that all deposits and outgoings of foreign currency in the local exchange market must be registered by the Banco Central de la República Argentina (The Central Bank of Argentina) and the constitution of a deposit on the name of the bearer, non- transferable and interest free, of an ammount of 30% of the operation, for a period of 365 consecutive days.

Fortunately, for real estate purchases, this was ammended by Comunicación A 4447 (an Internal Ammend, in this case, A.F.I.P.´s) valid since December, 1st, 2005. It establishes that incoming foreign currency in the concept of non-residents´ investments applied to the purchase of real estate, can be processed only if the foreign currency exchange and payment are done simmultaneously on the same day as the title deed signature; this latter traspassing ownership to the non- resident to whose purchase the resulting founds of the exchange operation must be transferred.

This information is worth transmitting to the foreign purchaser, so that he can coordinate his account- transfer with the bank on the same day as the tiitle deed signature.

Also, in the case of foreign buyers of real estate under construction, Comunicación “C” 43075 (Oficial Communiqué) of the Banco Central included that payments of contracts of sale, future installments and other operation expenses, will not suffer the consecuences of the 30% tax retention.

© Real Estate & Economy Report, May 2006

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