We walk you through everything you need to know about bringing money into Colombia and navigating the financial system.
Making sure you have easy, pain-free access to your money is an essential step in any overseas travel and Colombia is no different. So, whether you’re simply on holiday or you’re dreaming bigger and looking for a new home or investment property, it’s important to understand the options for bringing money into Colombia.
This guide includes everything from exchanging cash at the airport (not a great idea), which ATMs to use, and whether you should consider opening a local account with a Colombian bank. Read on to learn about all the ways to bring money into Colombia.
Accessing your money in Colombia
Cash. Bringing a small amount of cash is a prudent backup measure, but given the less than favorable rates on hard currency exchanges in Colombia (due to the ongoing strength of the U.S. dollar and other currencies), it’s not advisable to bring large sums of foreign currency. And due to the abundance of ATMs, it’s not necessary at all. However, should you choose to do so, keep in mind you must declare any currency valued over $10,000 (USD) upon arrival.
You’ll find currency exchange booths (casas de cambio) at international airports, malls, and city centers. There you can swap dollars, euros, and most other major currencies for Colombian pesos (COP). Typically the fees and rates offered at airport casas de cambio are much higher and worse than you’ll see elsewhere.
ATMs. The Colombian banking system operates on the same international network as the U.S. This means you can withdraw money from virtually any ATM in Colombia with an international debit card issued by Visa (Plus network) or Mastercard (Cirrus network). However, fees vary greatly depending on your home bank and the local bank you use. Check with your bank to see if it partners with a Colombian one that offers lower- or no-fee withdrawals. While a currency exchange fee will apply to all withdrawals, it is significantly lower at an ATM than casas de cambio.
ATMs are commonplace in Colombia. Major banks like Bancolombia, Scotiabank, and Banco de Bogotá operate brick and mortar locations in major cities. In a pinch, you’ll also find a wide variety of banks and ATMs in malls.
Most Colombian ATMs limit withdrawals. These limits vary depending on the local bank and your debit card issuer. Don’t expect to be able to withdraw more than $1,000,000 COP (approximately $293 USD as of December 16, 2020) per transaction. Additionally, your bank may enforce its own daily withdrawal limit, so don’t count on multiple transactions or using different Colombian banks to circumvent limits, either.
Wire Transfers. It’s possible to wire yourself money in Colombia. Major international wire transfer services like Western Union and MoneyGram operate throughout the country. If there are no nearby branches, you can choose to pick up your money at an Éxito, a major grocery store chain with locations throughout Colombia. Limits, fees, and speed vary based on how you pay (bank account, debit card, or credit card) and how you receive the money (cash or direct deposit into a bank account). If you’re not a Colombian citizen, make sure to bring your passport when collecting the transfer.
Several alternate wire services also exist. Xoom, Transferwise, Worldremit, and Remitly are popular choices with easy-to-use apps. Most Colombian banks accept transfers from these services, making them a good option for paying any regular, larger bills—like monthly rent if you are on an extended trip—that you might incur.
If you need to bring a larger sum of money into Colombia than the above options can accommodate (for instance to purchase real estate), you’ll need to take some additional steps. The basics of the process is outlined below, from opening a Colombian bank account to the paperwork and legal requirements.
Opening an account with a Colombian bank or brokerage
Unsurprisingly, if you’re planning to purchase Colombian real estate, you’ll need a Colombian brokerage or bank account. In theory, this process is straightforward. However, in practice, numerous hurdles can arise. Colombian banks enforce strict compliance rules for international investors. As such, any shortcuts taken during the purchasing process may come back to haunt you in the long-term, especially if you choose to sell your property. With that in mind, real estate in Colombia provides an excellent investment opportunity, so don’t let the paperwork dissuade you.
Choosing a Colombian Bank or Brokerage. Several Colombian banks offer services for foreign investors and will help guide you through all the steps involved in purchasing real estate. Below we’ve listed a couple of the options and give a representative step-by-step example of the process involved.
Alianza Valores is a popular choice for foreign investors. To open a brokerage account with Alianza, you’ll need to fill out various paperwork online and provide:
- A copy of your passport
- Your most recent U.S. tax return filed with the IRS
- Pay stubs or documentation for the source of the money you plan to deposit with Alianza
- Previous three months’ bank statements
- An introductory or “presentation” letter offering some details about yourself and explaining your future plans in Colombia
A representative of Alianza will also conduct a phone interview (in English or Spanish) with you to authenticate the information you provide in the application process.
After completing these steps, you can wire money into your new Alianza brokerage account. You’ll then have seven days to convert this money to Colombian pesos. (If you don’t convert the money within seven days, it will be automatically refunded). Alianza charges a 1% fee when you convert your money to COP. A 0.4% tax collected by the Colombian government on most financial transactions in the country will also be applied when the money is used to make the property purchase.
Note that it is very important to register the funds correctly as a foreign investment using Form 4 as this will enable you to repatriate the money in the event you sell the property. We strongly recommend working with a lawyer to do this.
Additionally, at this time you’ll have to register your transfer as inmuebles (real estate) with the Banco del República (National Bank of Colombia). Your bank should do this for you, but to avoid headaches down the road, it’s worth confirming that whichever financial institution you’ve engaged with has indeed taken this step.
Navigating a foreign country’s financial and legal system when considering purchasing an investment property can be an intimidating task for even the most intrepid travelers and investors, and we highly recommend engaging a local attorney when purchasing real estate in Colombia.
Lifeafar’s team of experts can help you minimize headaches, avoid hidden liabilities, and invest with confidence. Contact us today to receive assistance from our experienced and bilingual lawyers and accountants who can help you every step of the way.
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