FATCA will affect how Latin America’s wealthiest invest, say prominent bankers.
By Jaime Mejia
Latin American cash outflows to overseas financial centers are about to face one of their biggest obstacles of the past few years as the United States’ new Foreign Account Tax Compliance Act (FATCA) comes into force.
That is the consensus of the wealth managers who gathered at the Wealth Management Forum in Miami last September. The event was organized by the Florida International Bankers Association(FIBA), the organization that brings together specialized private banking and wealth management institutions from around the world.
FATCA is a U.S. Internal Revenue Service legislation that aims to tackle tax evasion and requires all banks to report their clients’ assets invested outside of the United States.
According to Banco do Brasil general manager Claudio Prado, the new legislation will affect Latin American investors. “What concerns investors is that banks are obliged to report their clients’ investments, including those made in Latin America, to the IRS,” he said. The IRS will in turn share that information with the tax agencies of the countries where those investments originated.
It is unclear how FATCA will affect Latin America’s wealthiest investment outflows, but there are already some foreseen changes in the way wealth management financial groups will conduct their business.
“That would mean that in order to attract investors, …
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