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BANKING BARRIERS AND CRYPTOCURRENCIES. A NEW PATH TO INTERNATIONAL REAL ESTATE

 

Buying real estate abroad has always been an attractive prospect for many investors. However, despite the opportunities this presents, the process of purchasing property in another country can be confusing and unpredictable for non-residents. The main difficulties lie in banking and legal restrictions, which can make transactions and transferring funds much more difficult.

Non-residents are often faced with the need to open bank accounts in the country of purchase, which can entail lengthy verification procedures and even denial of service. Also a big problem is the import of currency across the border and the need to declare it and all the necessary documents, if it comes to buying real estate for cash.

In parallel with these problems, the global financial markets are experiencing rapid development and implementation of digital technologies, including cryptocurrencies. Electronic money such as Bitcoin, Ethereum, USDT and other altcoins are beginning to play a significant role in international financial transactions due to their versatility and relative independence from traditional banking systems and European bureaucracy.

Cryptocurrency companies offer an alternative way to conduct transactions without being tied to a specific state, which makes them an ideal tool for international purchases of real estate, cars and so on. On the network you can find services that offer conversion of cryptocurrency into fiat money and vice versa, which are received into the accounts of sellers.

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Buying real estate for cryptocurrency

If you have cryptocurrency but there is no possibility to pay for real estate or other goods with it, as well as if you need to pay the seller in crypto, you can always use the services of companies such as BitCash Pay, conducting conversions between the accounts of any country and cryptocurrency wallets.

Of course, there are companies that provide services in opening bank accounts in other countries, but this has its pitfalls, such as the need to open a company and office in the country or obtain a residence permit, the need to make a deposit of 100,000 euros and others. Opening such accounts usually takes from 3 months and costs 3000-5000 euros only for the services of the company.

Consider the case of a businessman from the USA who decided to buy a villa on the Mediterranean coast in Spain. Attempts to open a bank account in Spain turned out to be painful due to difficulties with documentation and lengthy bank verification procedures. Nevertheless, thanks to the use of Bitcoin, he was able to quickly and cost-effectively transfer the necessary amount to the seller, bypassing traditional banking channels. The seller, in turn, accepted the payment in cryptocurrency, which allowed both parties to significantly reduce the time and cost of the transaction.

The transaction was made through an official guarantor, who was an intermediary between the parties, the guarantor of transactions usually takes 0.5-1% for his services, the funds are transferred to the wallet of the Guarantor and the payment of the transaction to the seller occurs only after agreeing on all points and signing agreements on the purchase and sale.

Overview of the relevance of the use of cryptocurrencies in international transactions

In recent years, cryptocurrencies have become increasingly popular as a means of international payments, including real estate transactions. They offer an alternative to traditional bank transfers, avoiding many of the problems associated with them. For example, in Dubai, where the real estate market is traditionally active, it has recently become possible to buy and sell real estate for bitcoins. This has become a reality thanks to the cooperation of local real estate agencies with cryptocurrency platforms, which allows to quickly and safely conduct transactions, bypassing complex banking procedures, of course with checks on the purity of the transferred crypto.

Cryptocurrency transactions can significantly reduce the time and costs associated with money transfers between countries. For example, transferring a large amount of money between Kazakhstan and Spain through traditional banking channels may require a number of approvals of the origin of funds and take up to several days, require significant commissions, while with the use of cryptocurrency it can be done almost instantly and with minimal costs.

One of the main problems for non-residents wishing to purchase real estate abroad is the need to open a bank account in the country of purchase if the seller is only willing to accept payment into a bank account. This requirement is often related to the legislative norms regulating financial transactions in the territory of the state. For example, in Italy, before buying real estate foreigners need to obtain a foreigner identification number (NIE) and open a local bank account, which can take a lot of time, several personal visits to the bank and require additional documents.

Buying real estate abroad is a complicated process, especially for non-residents. For example, in European uniоn countries such as France or Germany, non-residents need to provide an extensive package of documents, including proof of source of income, which can take several months.In addition, there are legal and tax restrictions that can significantly increase the purchase price. For example, in Singapore, non-residents are required to pay an additional tax on the purchase of real estate, which can reach 20% of the value of the object. These factors complicate the process of buying real estate and make it not only more expensive, but also more time-consuming.

Each country has its own peculiarities of legislation concerning the purchase of real estate by foreign citizens. For example, in some countries, such as Canada or Australia, non-residents may be subject to additional taxes or restrictions on the purchase of real estate in certain regions. Such measures are taken to control the real estate market and prevent its excessive price growth at the expense of foreign investors. For many foreign buyers, the language barrier becomes a serious obstacle. Insufficient command of the language of the country in which the purchase is planned, can lead to a lack of understanding of the nuances of local legislation. For example, in France, where sale and purchase documents are drawn up in French, it is necessary to hire an interpreter or a legal consultant, which increases the cost and complexity of the process of acquiring real estate.Such issues can significantly complicate the purchase process and increase overall costs and risks for non-residents. In this context, the use of cryptocurrencies may represent an alternative way around some of these barriers, as cryptocurrencies do not require the opening of bank accounts and can facilitate international transfers through official conversion services. When it comes to international real estate purchases, banking systems play a key role in ensuring the legality and security of financial transactions, so often a real estate seller will ask to transfer funds to a bank account or pay in cash. But this is not a problem when using the services of companies that solve this problem with currency conversion for a small percentage, usually it is 2-5% of the transaction amount depending on the country and payment method.

International financial regulations such as FATCA (US Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) require banks to collect information about their customers’ financial accounts and share it with tax authorities. These measures are aimed at preventing tax evasion. For example, Canadian banks must report accounts held by U.S. citizens to the IRS (Internal Revenue Service). This can affect real estate transactions, especially if the buyer uses foreign accounts to complete the transaction.

A U.S. investor attempted to purchase real estate in Paris but encountered delays due to CRS requirements. The bank required additional documents to prove his tax status, which significantly slowed down the purchase process.

A Russian investor faced a temporary freeze on his account after attempting to transfer a large sum of money from Russia to the UAE to pay for real estate. The bank conducted further investigation to verify the origin of the funds before unfreezing the account.

Main types of bank checks applied to non-residents

Banks actively apply anti-money laundering (AML) and counter-terrorist financing (CFT) measures. These measures inсlude the following checks:KYC (Know Your Customer) verification. This is a customer identification process that involves collecting and verifying personal information such as passport details, residential address, and sources of income. For example, when buying real estate in Spain, non-residents need to provide not only a passport, but also proof of a stable source of income.

PEP (Politically Exposed Persons) checks. These are special checks for individuals who hold significant public positions, their relatives and close associates. These individuals are considered higher risk because of the possibility of corruption.

Banks have the power to freeze accounts or refuse transactions if they detect suspicious activity or if customer data does not fully comply with AML requirements. For example, in 2019 in the UK some non-residents have had their accounts temporarily frozen due to investigations relating to their sudden large transfers to buy real estate, as well as obvious problems for people with citizenship of the Russian Federation, Belarus, Africa, Iran, Afghanistan, South America, etc.

These examples highlight how important it is for non-residents to be prepared and have all necessary documentation in order to avoid delays and potential legal problems when buying real estate abroad.

Cryptocurrencies such as Bitcoin, USDT and others, as well as cryptocurrency intermediary companies, are beginning to play a significant role in international financial transactions, including the purchase of real estate abroad. They offer a number of unique measures to circumvent the complexities of paperwork that can simplify and speed up the transaction process.

Benefits of using cryptocurrency for international payments

Fast transactions. Cryptocurrency payments are processed much faster than traditional wire transfers. For example, international wire transfers can take days to a week, whereas blockchain transactions are usually confirmed within minutes or hours.Lower commissions. Because cryptocurrency transactions don’t require intermediaries in the form of banks, transfer fees are typically lower. This makes them especially attractive for large international transactions such as real estate purchases.

Transparency and security. Blockchain technology provides a high level of security and transparency, you can always prove when and how much went to a particular wallet. All transactions are public and easily traceable, yet protected from unauthorized access.

Buying real estate in another country is often associated with the need for complex banking transactions and a lot of bureaucratic procedures. Cryptocurrencies can greatly simplify this process:

Avoiding banking restrictions. Some countries have strict capital controls that limit the ability to transfer money internationally. Cryptocurrencies allow you to bypass these barriers because transactions do not go through traditional banking systems.

Legal aspects and restrictions on the use of cryptocurrency in different countries

While cryptocurrencies offer many benefits, there are also significant legal challenges:Regulation. Many countries have not yet established clear regulations on the use of cryptocurrencies in international trade and real estate acquisition. For example, China has a complete ban on the trading and use of cryptocurrencies, while cryptocurrencies are becoming increasingly recognized and regulated in EU countries.

Taxation. Buyers and sellers should be aware of the tax implications of cryptocurrency transactions in their countries. In some jurisdictions, profits from the sale of cryptocurrencies are subject to taxation.

Legality of use. Each country has different laws regarding the legality of using cryptocurrencies. Buyers and sellers of real estate need to keep these laws in mind to avoid legal problems.

Cryptocurrencies have the potential to significantly change the landscape of international transactions, including in the real estate sector, by offering simplified, cost-effective and secure transaction methods. However, their effective use requires careful study and consideration of both legal and operational aspects in different jurisdictions.How to choose the right real estate and avoid pitfalls

Choosing real estate abroad is a complex process that requires a careful approach and study of many aspects. It is important not only to choose an object that meets all your needs, but also to make sure that the transaction will be safe and legal.

Tips for choosing a reliable realtor or intermediary:

Determine your market. Before searching for an agent, determine which country and region you want to buy a property in. This will help narrow down potential realtors who specialize in your area of interest.

Check Reputation. Research reviews of realtors or agencies. Visit independent forums, social networks and specialized websites where clients share their impressions.

Licensing and certification. Make sure the realtor has all the necessary licenses and certifications to work in the chosen country. This ensures that the agent is operating within the law and is regulated by government authorities.

Here is one example of action. John from the USA decided to buy an apartment in Spain. He chose an agent based on recommendations from friends and checked his certificates through the official website of the Spanish Association of Realtors. This gave him confidence in the professionalism and reliability of the intermediary as an option.

The importance of conducting a thorough due diligence of the property

Document verification. Always check the legal cleanliness of the property. This includes analyzing the title, checking for encumbrances and mortgages.

Legal support. Hire a local lawyer to help you understand local laws and regulations. A lawyer will also be able to represent your interests in the transaction.

Contacting a lawyer can help you avoid problems. Maria from Russia was interested in buying a villa in Thailand. The lawyer she hired discovered that the land on which the villa was located was registered to a company, which violated Thai laws on foreigners’ ownership of land. Thanks to this, Maria avoided a risky purchase.

When you decide to take practical steps when making payments through cryptocurrency platforms pay attention to the following:

Platform selection. Use reliable and trusted cryptocurrency payment platforms that provide secure and confidential transactions.

Currency conversion. Take into account possible fluctuations in the cryptocurrency exchange rate. It is desirable to negotiate in advance the terms of conversion and fixation of the exchange rate at the time of the transaction.

Legal support. Prepare all necessary documents for legal support of transactions in cryptocurrency to ensure that they comply with the laws of the country in which the property is purchased.

Case Study Example. Stephen from the UK decided to buy an apartment in Germany with bitcoins. He used a service that provided instant conversion of cryptocurrency into euros with fixing the exchange rate at the time of the transaction. This approach allowed him to avoid losses due to bitcoin volatility. But of course, it is best to make all transactions through USDT stiblcoins.

All legal and financial issues regarding payment with cryptocurrency and its further conversion into national currency, it is better to coordinate through established companies in the fintech market, such as BitCash Pay.

Examples of successful transactions and what to look out for

One notable example of a successful real estate purchase for cryptocurrencies is a transaction made in Dubai in 2021. A US buyer purchased a luxury penthouse worth over $20 million, paying for the transaction entirely in bitcoins. This transaction was an example of how cryptocurrencies can serve as a powerful tool for international financial transactions, bypassing traditional banking restrictions and reducing fees.

In Switzerland, known for its innovative approaches to financial technology, a family sold their villa for Ethereum. The deal was made for the equivalent of 800 thousand US dollars. This case demonstrates how cryptocurrencies can be used to conduct large cross-border transactions, but mostly with conversion to fiat money through intermediary companies.However, despite the successes, cryptocurrency transactions are not without challenges. For example, one of the transactions in Canada encountered a delay in the transaction due to the high volatility of the cryptocurrency. As a result, by the time the transaction was completed, the value of bitcoin had fallen and the buyer was obliged to pay a significant amount of extra money. To solve this problem, the parties agreed to fix the rate of the cryptocurrency in advance at the time of the preliminary contract to avoid financial losses due to market fluctuations or to work with stablecoins.

In another case, in Australia, a buyer faced difficulties in formalizing ownership of the purchased property due to the lack of a legal framework for cryptocurrency transactions. The problem was solved by engaging legal advisors specializing in blockchain technologies, who helped to properly execute all the necessary documents, taking into account the peculiarities of cryptocurrency transactions.

These examples emphasize the need for careful preparation and understanding of cryptocurrency transactions, including the legal framework and market risks. They also illustrate the potential of cryptocurrencies as a means to optimize and simplify international real estate financial transactions.Cryptocurrency intermediary companies, why are they needed?

Cryptocurrencies represent a new path to international real estate, providing flexibility, lower transaction costs and increased speed of transactions. These factors make them a powerful tool in the hands of global investors looking to broaden their horizons and ease the process of buying abroad.

It is worth noting that despite the advantages, there are also certain risks, such as high volatility of cryptocurrencies, fraud and lack of uniform international rules for their regulation, as well as the lack of human involvement in this financial sphere, which instills fear in buyers and sellers before interacting with cryptocurrency. Today, for these purposes, it is possible to use proven services for such transactions, where counterparties operate with different international accounts, systems and currencies.

BitCash Pay is an international transfer service that has been operating since 2016.

They help to solve the problems of international transfers, including the conversion of cryptocurrencies. With them you can quickly and reliably buy/sell real estate or other goods in more than 95 countries for both fiat and cryptocurrency.

The company’s infrastructure includes dozens of accounts of legal entities and individuals in banks and payment systems around the world.

This project operates in all countries of Europe and Asia, and has hundreds of reviews of their work on popular sites and forums.

With them you can:

→ Pay for any goods and services – from hotel rooms to cars and real estate for cryptocurrency

→ Receive and pay USD, EUR to an individual’s account

→ Pay to legal entities’ accounts

→ Accept payments from European companies with subsequent conversion into national currency

→ Cash withdrawal in almost all capitals of the world

 

Documents with which the company works when executing a transaction:

– Agency agreement with the partner, which includes signatures of the parties and BitCash Pay account details

– Payment execution order, containing details of the recipient

– Payment execution order according to the sample attached to the agency agreement

– Invoice from the recipient, issued in the name of the payment agent without mentioning the Russian party. This document is required by the payment agent to make payment through a foreign bank.

Prompt and clear support service will assist in filling in all the necessary documents.

 

Security.

When working with this kind of companies, you need to carefully check their integrity and reliability, as there are more and more scam projects on cryptocurrency conversion in the network. The site of the company should be at least a few years older, do not have negative feedback on the deception of customers on popular reviews, do not be in the database of scam sites and have the appropriate cryptolicense for the exchange of virtual assets, it can be checked on the state. site of justice of the country of registration of the company. An important factor is the conclusion of a signed contract with the company, where will be indicated their crypto wallet to which you send funds and details of your counterparty.

It is also important to carefully read the AML policy of the company for accepting cryptocurrencies, which indicates what measures and conditions to combat the laundering of black assets that are sanctioned, as not all cryptocurrencies are available for official transfers to the account of companies. You will not accept crypto that has previously been involved in various frauds, drug sales, terrorism, money laundering, etc.

Carefully check the purity of crypto that you accept to your wallet with the help of special services, it will help in the future to avoid problems with its realization.

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14.06.2024, 19:37