I'm a Canadian and have been living in Brazil with my husband for 3 years. Both our careers are taking off and we are interested in investment opportunities in this international context. I have permanent residency here and he has the same in Canada, so we are lucky that we skip most of the red tape. We think that real estate might be the best opportunity but we are by no means financial experts. Any advice on cross-border investments?
Asked by Anonymous, Sao Paulo
You can purchase an investment property in Canada as a non-resident but there are several things to take into consideration. There can be difficulty managing a property when not being nearby if there are any repair or emergency issues. Furthermore, there needs to be a 25% withholding tax based on the monthly rental income that is sent to the CRA by the 15th of each month. This does not require any tax filing by the owner. This can either be submitted directly by the tenant or from an agent that collects the rent. If you use an agent, they can directly deduct the rental expenses and remit 25% of the net rent by filing a form NR6.
Investments in equities done by an investment advisor are also possible. With knowledge of any tax treaty between the two countries, an advisor can help to reduce or eliminate some non-residency withholding taxes by making specific investments. Each country may or may not have a tax treaty with Canada allowing exclusions or not.
Please feel free to contact me personally if you would like direct help with your non-resident investment planning.