DAA account: can Digital Nomads domiciled abroad have a bank account in Brazil?
- Thyani Rodrigues Puppio
- Dec 11, 2023
- 5 min read
Updated: Jan 14
DAA - Domiciled Abroad Account: can digital nomads domiciled abroad have this bank account in Brazil?
There are several myths that permeate the internet about the banking and tax situation of those who file a Declaration of Permanent Departure and change their tax residence, such as the cancellation of their CPF (the brazilian's Social Security Number) and the impossibility of having (or maintaining) a bank account in Brazil.
But before we get into the DAA account itself, it's important to debunk the "rumors" about the cancellation of the CPF and the impossibility of having a bank account in Brazil after making the tax exit.
Myth 1: "If I make a tax withdrawal, my CPF will be canceled"
This rumor is the most widespread, both on the internet and among some bank branches throughout Brazil. Bad faith? No. Just ignorance.
Firstly, there are only two cases in which the CPF can be canceled:
a) multiplicity of information;
b) court order.
The multiplicity of information is the case of a person who has several CPFs registered under their name, or the same CPF has several names registered at the same time.
A court order is a judicial decision, i.e. an act issued by a judge within the context of ongoing legal proceedings. If there is no lawsuit, there is no court order.
Secondly, it's not just Brazilians living in Brazil who can have a CPF; foreigners living abroad - with tax residency abroad - can also have a CPF.
Brazilians domiciled abroad will keep their CPFs registered when they change their tax residence.
In short, both Brazilians and foreigners, whether domiciled in Brazil or abroad, can have a CPF.
This information can be found on the Receita Federal's website. Just go to the Receita website and find the "my CPF" tab on the home page and consult all the information about CPF registration[1].
Myth 2: "If I do the tax exit I won't be able to have/maintain a bank account in Brazil"
This is the second most widespread rumor, which stems from the first. It is spread mainly within bank branches, not out of bad faith, but because they are unaware of the exchange rate legislation and the rarity of clients with a DAA account.
Brazil offers both Brazilians and foreigners domiciled abroad the DAA account (Domiciled Abroad Account), which is currently regulated by Central Bank Resolution No. 3,584 of December 31, 2022 and Central Bank Resolution No. 4/2020, and by the new Foreign Exchange Law (Law No. 14,286/21).
Article 67 of Resolution No. 3,584 leaves no room for doubt about the possibility of having an account in Brazil, even if you are resident abroad:
"Art. 67: Institutions authorized to operate in the foreign exchange market may open, maintain and close deposit accounts and payment accounts in reais held by non-residents under the same conditions under which they may open and maintain such accounts held by residents, subject to the provisions of this Title."
As the article itself says, in addition to the banking institution's duty to be authorized to operate in the foreign exchange market, it will have to meet certain requirements of the Resolution in order to offer the DAA account.
Without further ado, let's move on to the DAA account itself.
What is the DAA - Domiciled Abroad Account?
A DAA is a type of bank account, regulated by the Central Bank, which can be offered to Brazilians and foreigners who are domiciled/resident abroad.
Banking institutions (banks) are not obliged to offer this type of account, so not all banks offer this service.
In addition, in order for banks to offer this type of account, they must meet a series of requirements, such as registration with Sisbacen and strict internal administrative measures to prevent tax evasion and money laundering.
For example, all transactions on prepaid card accounts have a limit of R$10,000.00 (ten thousand reais) per transaction and, for all transactions of R$100,000.00 (one hundred thousand reais) or more, documentary proof of these amounts is required.
Because of this reasonable bureaucracy, some banks prefer not to offer the service, and those that do offer the DAA account usually charge a monthly maintenance fee.
Important note: the DDA account is not to be confused with the 4373 account (foreign investor account). I'll go into more detail about the 4373 account in this article.
The advantages and disadvantages of the DAA account - The New Foreign Exchange Law (Law No. 14.286/21)
One of the major disadvantages (and complaints) for those who have a CDE account is the monthly maintenance fee, which can vary between R$300.00 (three hundred reais) and R$1,500.00 (one thousand five hundred reais).
In addition to the monthly maintenance fee, some banks may also charge an account opening fee, which can also vary between R$300,000 and R$1,500.00. Other banks only offer a deposit account and don't offer a prepaid card account, etc.
However, there are advantages to having a CDE account, such as:
a) the facilitation of buying and selling real estate in Brazil, due to the various transactions prior to the transfer of ownership (down payment and notary fees, for example) and;
b) making it easier to transfer money from Brazil to abroad and vice versa.
Before the advent of the new Foreign Exchange Law and Central Bank Resolution No. 3,584 of December 31, 2022, the bureaucracy involved in obtaining and maintaining a CDE account was almost unfeasible, which justified the high maintenance fees required.
However, the new Foreign Exchange Law simplified the CDE account, with the aim of giving holders more freedom to move larger amounts and, consequently, banks reporting less to the Central Bank about the activities of these accounts, reducing bureaucracy.
Central Bank Resolution No. 3,584/22 came into force this year (2023) and, due to the lack of knowledge of most banking institutions about the CDE account, many of these new rules have not yet been applied and maintenance fees remain at the same levels.
We hope, albeit slowly, that banking institutions will become aware of this Resolution, helping to reduce bureaucracy and CDE account maintenance fees.
In view of this, if you are thinking of living abroad or in Brazil, we insist on the importance of consulting a tax/immigration lawyer to accompany and assist you throughout the entire immigration process. Tax planning will help you avoid double taxation and tax evasion.
If you are interested in hiring professional legal services to help you open a CDE account, or even to carry out tax planning, we are a law firm specializing in the subject. Just get in touch via email: contato@trpuppioadvocacia.com.br