Colombian banks make it difficult to wire money from USA

My Colombian wife  has an account with Davivienda and when we transfer money from the USA to her account, Davividenda turns it into a major complication and bureaucratic nightmare.  We have to spend hours with them justifying the transfer, the origin of the  money, and what we are going to do with it.  Please don't tell me why they are doing it, I know that it has to do with the narco traficantes and money laundering but I am an honest and responsible retired person who wants to live with  my wife's family in Colombia and I am sick of the constant suspicion about my activities. 

Are there Colombian banks that are more  friendly with expats and who don't make you jump through hoops every time you transfer/wire money?  Regardless of national law and banking regulations, there has to be  some banks who make it easier for retired people to routinely transfer money.

Wow, I did not know that. Thanks for the heads up! I want to buy a house there. I will eventually need to wire $50k - $100k. I wonder if it I will have trouble as well.

Chris

[at]ChrisGC, It is not having troubles, it is about going through the verification process.

[at]Jubilado YOU know you are an honest retired person, THEY suspect you to bring back to Colombia laundered money.
There is no specific bank that would ease up the process. The game is played at branch level.
Get to know your Branch Manager, meet him, talk to him, explain your needs, show how unharmful and responsible you are. This is Colombia, everything can be solved with good human relationships. Don't rely on rules, customer rights, rely on your social skills.

Hi! I´m also retired living in Medellin....I get my Social Security sent to me automatically by direct deposit with Bancolombia. It is the only bank in Colombia allowed to receive it through an intermediary bank in the U.S. If we aren´t talking about Soc. Security, maybe you should think about opening an account with a more recognized bank such as Bancolombia. If you want tell me alittle more about your circumstances so I can help you evade so many problems, feel free to do so..

In the states , when one transfers funds it is automatic and immediate.I always have to wait days for my Social Security to enter my account. Since the dollar is worth almost three times the Colombian Peso I have a suspicion that Bancolombia  holds funds to the last possible minute possiblly perhaps playing with the exchange rate. But it is what is is. I know where my money is at all times and constantly catch them lying to me. Hopefully, this will change in the future when they realize people aren´t as dumb as they think. Unfortunately, the banks in Colombia treat customers  with less respect than in the states. And I´m always amused how the banks workers have maids that bring them coffee and water but ignore the bank customers. Someone should tell them that banks employees in the states is a relatively low paying job especially tellers. In Colombia they act like ¨prima donas¨ parading around like peacocks.

We recently moved to Medellin and are in the process of renting an unfurnished apartment. We've been required by the rental agent to provide a substantial deposit to assure we won't abuse the property or terms of the lease until we've demonstrated we're good renters. That has entailed setting up an account (savings account since there are no longer any checking accounts here) and purchasing a CD to post as security. About seven grand US dollars. The amount is set by an insurance company underwriter. We did negotiate the original figure down from the original amount because the landlord requested them to be reasonable. The insurance protects the agency in the event of default since they would then be legally required to make up the difference to the landlord. Not like the US where the landlord is stuck if the renters go sour (as we know from grim experience).

I just today set up wire transfer of those funds from our US account to the new Colombian one, and I'm assured that will take only 48 hours and it's no problem to bring in any amount less than seven grand (which requires even more paperwork and approvals). So we've set the amount a dollar less (USD 6,999).

The process of setting up the account as a cedula holder took about half an hour and wasn't difficult. They did ask what our individual incomes were, which seemed strange until our translator explained that the bank wants that for marketing purposes (credit card offers, etc.). Otherwise, nothing out of the ordinary compared to setting up an account in the US.

First, Welcome to Medellin to be honest I´ve never heard of putting down such a big deposit down for renting an apartment. Second, I have rental property and use an agency and they are responsible for everything including when the renters don´t pay the rent. The agency gets a cut from the rental amount every month.  Make sure your dealing with a reputable. rental company.

I live in Envigado where are you renting? I do have friends when they rent they need a ¨Fiador¨ which is a person which is responsible. Make sure this deposit is totally refundable to you because there is one thing to remember CYA. Besides that everything is good...If I can be of any help to you feel free to contact me at precolombiano1[at]hotmail.com which would be more private.

What bank are you dealing with?..there are checking accounts but I´ve always done business using my savings account to pay bills.

[at]zuzzu: "I live in Envigado where are you renting?"

Milla de Oro in El Poblado, so most everything is within easy walking distance (we don't own a car). Not the best prices at local stores, of course, but major shopping on the cheap is available by calling a taxi (almost 20,000 roam the streets) or Uber.

A side note: the modest premium paid for UberBlack provides FAR more comfortable transport in a larger, more solid vehicle -- always a late model and usually an SUV -- with air conditioning and no radio blaring; also arguably safer (blacked out windows, fully rolled up). Uber drivers are less aggressive than some cabbies here -- much more like chauffeur service, really. Residents are cautioned not to allow taxi drivers into their apartments, even if they offer to carry up the groceries. Most cabbies are genuinely good, ordinary folks (Colombians are the kindest people in the world, IMO) but assuming it's a safe bet to randomly hail a taxi on the street may to be a serious error -- especially at night. Telephoning for a taxi means the trip will be registered and you'll know the license number of the taxi dispatched to pick you up, as with Uber. Unlike Uber, however, you'll have no opportunity to rate the quality of service you received. There is also, of course, the advantage that no money changes hands with Uber. Taxis only accept cash. If you mostly use a charge card for purchases, you can get away with carrying little cash on your person.

[at]zuzzu: "I do have friends when they rent they need a ¨Fiador¨ which is a person which is responsible."

Yes. The peso-denominated CD deposit arrangement avoids paying a fee to a fiador. Avoiding that fee is effectively untaxable income earned on otherwise "dead money" sitting in a bank account. The downside, of course, is the blistering rate of depreciation of the peso against the dollar, which seems likely to continue for some time. So the net value of the CD arrangement based on purchasing power is likely a net loser (or wash, at best). But the current declining cost of rent (in USD) more than offsets that modest loss.

[at]zuzzu: "Make sure this deposit is totally refundable to you because there is one thing to remember CYA."

The way this works, the CD is in our name but pledged as a deposit for a set period of time (typically 90 days) to protect the agency against default. The modest interest accrued on the CD (which is taxable, of course) goes to our Bancolombia savings account.  When the current CD expires, it must be replaced by another, but the required amount apparently declines over time as the insurance company re-assesses the risk of default based on demonstrated performance.

The agency is ConinsaRamonH, which I'm told is one of the largest in the area and they apparently enjoy a good reputation.

[at]zuzzu: "Besides that everything is good."

So far, we think so. But I agree it's important to pay attention. Our Colombian lawyer is reviewing documents, a measure hopefully sufficient to avoid future surprises. "When in Rome,...."

Hi,...Sounds like your everything you´re doing is on the up and up...there´s a Pricemart in Belen which is near Poblado where you can shop like an American....I have been here in Medellin on and off for twenty five years and have never had a problem but one has to be wise. Now I live here enjoying the friuts of my labor.

Yeah the dollar complicates things it will help certain things while being a detriment to other things. Good Luck in your endeavors. Ken

If we move to Colombia from Venezuela, we will have to make periodic wire transfers from US (my mother´s pension and also the income from our investments). Here in Venezuela I do that on the Internet, and no problem. From reading the posts, it seems that this is not that easy in Colombia? We are talking about 1000 US $ a month

What I have done and what family members living there do, is to simply withdraw cash from an ATM using a US-based debit or credit card (drawing on a US account).  If the ATM is located inside a bank where you have an account it is then easy to deposit the cash into your account as needed.

Once you have a cedula, you can open an account at Bancolombia and use that to receive transfers of money from the US. I understand that Bancolombia (and only Bancolombia) can also receive direct payment of Social Security checks if you want that.

That might be a good idea. So, it is definitely not possible to make a wire transfer to a Colombian bank on the Internet?.

Yes, but it seems that they will always be asking where the money came from.

I've twice wired money from our US account to our account at Bancolombia, so yes it's possible to set that up when needed. I believe you can also make arrangements with a US bank to periodically transfer funds of a defined amount at whatever interval you like -- not a wire transfer, but a bank transfer which incurs no wiring fees. Or so I've read somewhere (and absolutely CANNOT confirm based on direct, personal experience).

Further to my comments above, I'd also add the following warnings:

1. Bancolombia requires a LOT more documentation if the total amount received in a calendar month is USD 7000 or more. In any case, bring some wipes with you since you'll discover taking fingerprints is a persistant ritual in all things financial in Colombia. Lots of fingerprints. :)

2. You do not want the total amount of "financial assets" collectively held in any and all offshore accounts to EVER exceed USD 10,000 unless you also rigidly and precisely comply with the onerous FBAR nonsense imposed by the USG -- and with harsh penalties for failing to do so which are breathlessly absurd, even by the standards of arrogant politicians. If you don't know what this is about, consult a tax person expert in this speciality and write them some checks to absolutely assure you don't trip any invisible and financially hazardous booby-traps.

bh2, let me see if I understand.When you say financial assets, you refer to your investments in bonds, stock, etc, in the US, and also the cash?

"bh2, let me see if I understand.When you say financial assets, you refer to your investments in bonds, stock, etc, in the US, and also the cash?"

Apologies if my comments were unclear. Financial assets (a very broad category as defined by the authorities) reportable on FBAR filings refers only to those held in institutions OUTSIDE the US. Including everything not in your personal possession offshore -- under your mattress, in your personal safe, whatever -- and in custody of any "financial institution" (which is also very broadly defined).

What you keep in the US isn't reportable as a foreign-held asset.

Suggest you consult a tax professional if you have any doubt. I'm not, and whatever I may say here or elsewhere is not to be construed as legal, financial, or tax advice. Only friendly commentary based solely on my own experience.

Yes, thank you, in fact I am interested in personal experience at this point.   That is, what people have done in similar situations. Thank you very much

My pleasure, Laura, if my comments are helpful. If you are bilingual (as I assume you may be) the nice folks at Bankcolombia will cheerfully show you all the salsa dance-steps necessary to be successful with financial transactions. As to your relationship with the USG, of course, you're on your own (like everyone else)  :)

jubiliado :

My Colombian wife  has an account with Davivienda and when we transfer money from the USA to her account, Davividenda turns it into a major complication and bureaucratic nightmare.  We have to spend hours with them justifying the transfer, the origin of the  money, and what we are going to do with it.  Please don't tell me why they are doing it, I know that it has to do with the narco traficantes and money laundering but I am an honest and responsible retired person who wants to live with  my wife's family in Colombia and I am sick of the constant suspicion about my activities. 

Are there Colombian banks that are more  friendly with expats and who don't make you jump through hoops every time you transfer/wire money?  Regardless of national law and banking regulations, there has to be  some banks who make it easier for retired people to routinely transfer money.

And just how would the Colombian banks or the government know you're an honest, responsible and law-abiding retiree unless you go through all the justification process for currency transfers? Have you thought of a satisfactory answer to that one? Do you have any really creative suggestions that would facilitate the process, or would you have them just throw the doors wide open again and let the problem return and very likely be worse than ever? The measures that have been put in place by the Colombian Central Bank have been established largely at the prompting of the US government in the first place.

I don't think you'll find any South American country that doesn't have a mountain of bureaucracy when it comes to international transfer of funds. It takes at least 4 to 6 hours at the bank and a mountain of paperwork for even the smallest amounts of money here in Brazil too.

Sad to say, but the ONLY successful way to combat the problems of international drug trafficking and money laundering is for governments to cast a very broad net in creating tough regulations, unfortunately that net also catches us "little fish" right along with the "big fish", not a heck of a lot that can be done about it unless you want all the "sharks" out there swimming freely as they once did.

God Grant me the Serenity to accept the things I cannot change,
The courage to change the things I can,
and the wisdom to know the difference.

Great words to live by in any South American nation, where you'll find that fighting the bureaucracy is useless.

BTW, you don't even want to think about all the problems I have cashing my Canadian Government Pension checks here in Brazil as a result of tight Central Bank regulations on foreign funds. Sometimes life is just like that.

Cheers,
James
Expat-blog Experts Team

You are correct on the fact that Bancolombia is the only bank in Colombia where you can receive direct deposit from Social Security. It is somewhat a lengthy process but having gone through it I´m glad I did it.
First, you have to have a cedula to open an acoount with Bancolombia. Afterwards fill out the application which is sent to the U.S. embassy in Bogota . The embassy will forward the application to Social Security and within one to three months everything is set to go.

There is a big advantage for retirees to do do this since it is true you can access your monies having a bank account in the states but you will be paying fees from that bank and the bank in Colombia which really adds up over time. There is no fee with direct deposit from any bank.

"There is no fee with direct deposit from any bank."

That's a sensible and quite valuable consideration for anyone on SS who is living here permanently. (Just don't let funds accumulate to a total amount that will ever put you into fear-of-god FBAR territory.)

Unfortunately all Colombian banks and the government are backward with regard to international money transfers.  I too have a Colombian wife and have been living in Colombia for four years and bank with BanColombia.  Transferring relatively small amounts of money from Europe is a bureaucratic nightmare and I can sympathise with all the comments below but it is the price we must pay for living in this paradise whether foreigner or Colombian.  I have worked all over the world and even banks in Africa are light years ahead of Colombian banking and customer service.

These measures only seem to affect the 'small fish' going about our legitimate business and do very little to stop the large scale money laundering and corruption that are clearly evident in Quindio.  So count to ten, smile and take a swig of Aguadiente but a great pity because international people and businesses eventually tend to move on to more user friendly countries.

I have Bancolombia in Colombia, but I have been living in the US for more than 10yrs and have also been living in Japan (never had a problem with Yens either) and have never had a problem at all. I hdid have a hard time once however but with BBVA when my freelance contract got paid in Canadian dollars, other than that, never had a problem.

I have citibank in the states and Bancolombia here and I do my transfers using Xoom. I had to explain the purpose of them once, they put the explanation on my account file and they haven't asked me for an explanation since. I do weekly transfers and they show up instantly in my Bancolombia account

How much you transfer weekly using Xoom to colombia

How much you transfer weekly using Xoom to colombia

Best. advice yet, but the 13,200 withdraw fee is high at atm. forget trying to please and be good citizens..it is a hoax. Go through the hoops once or twice and you are ok.

hkumar00 :

How much you transfer weekly using Xoom to colombia?

Wise Expats know that answering such a question is probably inadvisable in an era of hacking and invasion of privacy on the Internet.

cccmedia

"hkumar00 :
How much you transfer weekly using Xoom to colombia?"

If you are asking how much Xoom will allow you to transfer each week I suggest you visit their website and direct your question to them.

If you are asking the poster how much they personally transfer each week that would be personal and confidential information that should not be shared.

handymantulsa :

Best. advice yet, but the 13,200 withdraw fee is high at atm. forget trying to please and be good citizens..it is a hoax. Go through the hoops once or twice and you are ok.

Some U.S. financial institutions cover some or all of the atm fees.  I have used both my Navy Federal Credit Union and Schwab atm/debit cards in Colombia with no additional fees.  Whether or not the exchange rate is comparable, worse or better than a money changer or money transfer company would be another issue.

Sometime I will have to extract the same amount from several Colombian atm's on the same day and see what the effective rate of exchange is when compared to the official rate for that day.

[at]bh2 or anyone else... Can you recommend a great tax consultant that specializes in Colombia-USA matters? Thanks!

markbergin :

Sometime I will have to extract the same amount from several Colombian atm's on the same day and see what the effective rate of exchange is when compared to the official rate for that day.

Dear Mark,

Welcome to the Colombia forums of expat.com ....

Thank you for two opening posts with solid guidance and information.

I would wager that few of our readers have come up with the strategy to compare bank exchange rates that you posted above.

cccmedia

cheyoru :

Can you recommend a great tax consultant that specializes in Colombia-USA matters?

Cheyoru in Santander,

Welcome to the expat.com forums....

Many USA Expats find that they need tax advice from two tax professionals -- one for IRS returns (USA) and the other a Colombia-based accountant (or tax attorney) for the morass that is the Colombia 'tax code'.

Which were you looking for in your post?  It's unlikely you'll find a single 'tax consultant' who can properly advise you for both countries' obligations.

cccmedia

[at]ccmedia Thanks for the reply! and I apologize for the ambiguity of my question. The need for a consultant is mainly due to upcoming sales and purchases of real estate. I am planning on selling one of two apartments in Bucaramanga and sending the money from the sale back to the US (I originally bought it with money earned from my work in the US). I now plan to buy a property in the US with the proceeds.

I am particularly concerned that I will be double taxed... having to pay taxes to the Colombian authorities and then the IRS as capital gains or, even worse, income. I'd like to figure out a way to minimize taxes :-)

Thanks in advance for any help!

Cheyoru,

This is a classic situation that is complicated enough that you will want more than one opinion.  The Colombian tax code -- and its interpretation -- is so complicated that you will get varying advice even if you just contact two tax professionals.

I haven't been giving a strong thumbs-up lately to tax and immigration attorney Christophe Moeller (aka Moller, easily googled), in spite of his consistently solid commendations from other Expats online.  The reason is that he proposed charging me $900-plus US to research my 2017 potential tax obligation to Colombia.  The details were not IMO .. that complicated.

But for your case, with valuable and multiple properties involved on two continents, this absolutely looks like a case for the vaunted Herr Moeller. :top:

Still, get a second opinion.  That's my recommendation.  The second consult won't cost you $900. :) 

Depending on the advice you receive, you may also need to have your favorite Colombian tax professional communicate with a USA accountant .. to protect your investments fully from both  the IRS and La DIAN.  This is another reason why the multi-lingual Herr Moeller may be your best choice in Colombia. :one

cccmedia

For a USA tax professional thoroughly experienced in Expat filings and planning, you may wish eventually to contact my guy -- in metro Las Vegas, Nevada:  Randall Brody of Tax Samaritan.

I have used his firm for all my USA tax returns dating back to tax year 2012.  They have impressed me with fast response-time and excellent low-tax-obligation results. :top:

The Tax Samaritan bill for my TY2017 tax filing (IRS only, no state filing was needed) was $220 US total.  I email documents to them and pay via PayPal from wherever I am in South America.

The company also offers optional/annual audit-protection, through which they will advocate for your interests if the IRS ever investigates via tax audit.  I decline the audit-protection because my returns are relatively simple .. and because I stay within the letter and spirit of the law.

www.taxsamaritan.com

Hi,

Looks like the original post is several years old, and I feel like back in the day when I looked into transferring money it was complicated, but at least for me now it's fairly easy with Bancolombia.  I had to set up in the online banking one time the account info for my bank in the US and can go back in and just select it.  From my experience, it's best to check the box to pay all the fees yourself as paying half and having the US bank charge as well tends to add up to more, but paying them all at once is about $35 USD.  Now it does have a limit of $5000 that it will let me do at once, and I only do it a couple times a year, so there may be limits on the frequency or total amount within a month or year.

Which bank did you use to open up your account?

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