Brazilians discovered international accounts last year, attracted by the ease of sending money abroad with just a few clicks, something previously non-existent not only for those who wanted to travel to other countries, but also to invest. But those interested in the news may wonder: after all, how much does it cost to invest in investments abroad? Is it worth it?
To answer, it is necessary to understand what rates apply to investments in foreign currency, in addition to the taxes due in the process, and how much, in fact, it is necessary to contribute to obtain a certain amount in dollars desired to make an investment abroad.
Fees
The costs for investing outside Brazil vary depending on the broker chosen to operate.
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Brokers may charge brokerage and custody fees, but there are houses that exempt investors from this type of charge.
Other than that, when sending an international shipment, it is important to remember that brokers may apply a spread on the exchange rate – it’s how they pay themselves.
- IOF: The Tax on Financial Operations (IOF) is a tax that is levied on the amount that will be converted into dollars. In international brokers, the IOF is 1.10% between accounts with the same owner, therefore this is the rate that applies to investments abroad.
- Spread: The spread is charged by brokers for the exchange service, and is usually between 1% and 3%. Generally speaking, spread and IOF are charged in the same conversion operation.
How much does it take to invest US$5,000
For an investment of US$5,000, it is necessary to contribute an amount in reais that will result in this amount after taxation of 1.1% IOF and an average spread of 2% on the exchange rate (the quote used by international brokers is commercial dollar).
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The sum of these three values (IOF + spread + exchange rate) gives what brokers call Total Effective Value (VET).
Check below how much it would be necessary to contribute in reais to transfer an amount in the five institutions with the lowest VETs, according to the Central Bank’s ranking.
The list only takes into account institutions that carry out foreign exchange operations, but helps to provide a dimension of what the “real exchange rate” for sending money abroad might be like.
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In Brazil, the main brokers that offer international accounts for investments are Avenue, C6, Nomad and XP.
| Institution Name | average VET | Value in reais to invest US$5 thousand |
| BCO RENDIMENTO SA | 4.9881 | R$ 24,940.50 |
| BRAZA BANK SA BCO DE CAMBIO | 5.0300 | R$ 25,150.00 |
| BCO XP SA | 5.0322 | R$ 25,161.00 |
| WISE | 5.0374 | R$ 25,187.00 |
| BANCO TOPAZIO SA | 5.0423 | R$ 25,211.50 |
