Transfering Money from Russia to Canada

[UTRO]

Hi Everyone! Long time no Posts!! Hope Everyone is doing well and the Newbie's are getting a lot of good advice off the Experienced Members. In my case Sveta has been in Canada now for a year and a half. It has had its ups and downs, but overall life is very good
My question concerns transfering money from Russia to Canada. Sveta's Dad has sold some property and wants to Gift a generous amount to her. What is the Best and Least Expensive way for him/us to do so? There is no way of transfering Rubles directly to a Canadian bank. It has to be converted to either US dollars or Euros first and then sent. Bank to Bank costs are nuts. The RBC charges 2% plus a Transfer fee. In our case it would be a ridiculous sum. It looks like Foreign Exchange Traders are the way to go? Any thoughts and advice? Thanks in Advance!
 
Dave and Sveta

[Misha]

Go check out TD Canada Trust. When I sold my wife's place few years back and wired the money to Canada, we were charged a small fee in Russia (roughly $35 by Sberbank) and TD Canada Trust did not charge us anything for depositing the money into our account.

[Faux Pas]

It should be a relatively easy process. Most any bank in Russia can wire the money for a nominal fee. It is rubles before the transfer and will be converted and Canadian dollars when it gets to Canada. You didn't mention the amount and I don't know Canadian law but, in the US, depending on the amount can have tax and reporting complications.

[BC]

Maybe consider just leaving it there if it's not needed.  Interest rate is probably higher.

Other than the recent blip, RUB USD and RUB CAD seem fairly stable.

[UTRO]

Thanks guys. Well the amount charged by RBC will be $1600, account to account. Sveta can also use her Sberbank Visa debit card at our RBC branch and that will cost $1200.
I'll check out TD Mischa.
Yes Faux Pas, we have the same Tax considerations in Canada, Capital Gains. However, since it is a Gift it is not taxable.
BC, Sveta is haunted by the 1998 collapse of the Ruble when her brother was ready to purchase a flat and and a day later could only afford a bed. You're right about the interest rate. The money is sitting in her Dad's account making 7%.

[Boethius]

You should look into HSBC and ING as well.  I believe HSBC operates in Russia (it did, not certain if that's still the case), so the fees may be less than for a Canadian owned bank.

[Misha]

I'll check out TD Mischa.

RBC is really planning on ripping you off. I would check every bank and credit union within a hundred mile radius as I am sure you will be able to find one (I would wager that TD will do it) that will deposit your money in for free. Then, I personally would then tell RBC to take a flying F**** and move whatever accounts you have there to another bank 

[BC]

BC, Sveta is haunted by the 1998 collapse of the Ruble when her brother was ready to purchase a flat and and a day later could only afford a bed. You're right about the interest rate. The money is sitting in her Dad's account making 7%.

Understand, but I think her fears are unwarranted - ask her what her Dad thinks..

Sberbank seems to be quite ok with online access etc.  In fact some of the costs are less and services better.

I would rethink.

[Lily]

My belief would be eventual tax implications in Canada, as every Canadian have to report her worldwide income.
Nothing replaces a tax professional consultation, however this seems to be a good read for the start:
http://canadianmoneyforum.com/archive/index.php/t-3323.html
http://canadianmoneyforum.com/archive/index.php/t-1510.html

[Boethius]

If the cash is a gift, Lily, there is no Canadian tax.

[Misha]

Understand, but I think her fears are unwarranted - ask her what her Dad thinks..

Sberbank seems to be quite ok with online access etc.  In fact some of the costs are less and services better.

I would rethink.

Why? Compare over the past century the defaults, wars, revolutions and hyperinflation Russia has experienced as compared to Russia...

[BC]

Why? Compare over the past century the defaults, wars, revolutions and hyperinflation Russia has experienced as compared to Russia...

Oh I think things are pretty stable.  7% ain't bad at all so it's just a risk thing.  Agree is best to diversify a bit.

I am not a financial adviser so just a 'hunch', nothing more.

[Lily]

If the cash is a gift, Lily, there is no Canadian tax.

Sure. However, I would be good to know whether the gift should be documented in any way, and whether there are any limits on this kind of gift.

[Misha]

Oh I think things are pretty stable.  7% ain't bad at all so it's just a risk thing.  Agree is best to diversify a bit.

When I was spending a lot of time in Moscow in 1997, Muscovites kept saying how their city was now in the same league as Paris, New York and London and how their economy was getting stronger every day.... Guess what happened in 1998   

[ML]

Maybe consider just leaving it there if it's not needed.  Interest rate is probably higher.

Other than the recent blip, RUB USD and RUB CAD seem fairly stable.

There is ALWAYS a risk/return trade-off.

But, contrary to 'barber shop' talk, the direction is only one way.

That is:  Taking on higher risk does not always lead to higher returns.
But; receiving higher returns ALWAYS means you are incurring higher risk, even as you cannot perceive what form the higher risk may take.

In the simple case of higher interest rates paid by some financial institutions in some countries . . . the higher risk usually relates to the chance you will not get your principal back at the time you were promised or you wish, or the FX rate will adversely move against you before you get your principal back.

Doesn't matter at all that your brother-in-law's friend's girlfriend's mother's hairdresser made a killing . . . you can still get killed.

Better to look at what happened to those who thought they were making big money on Ukrainian bank deposits in 2008-2009 and still have their funds frozen.  Or what happened to those who got sucked into the Iceland banks more recently.  Or Mexican banks a few years back.

[Boethius]

Sure. However, I would be good to know whether the gift should be documented in any way, and whether there are any limits on this kind of gift.

There is no formal requirement to document the gift, though it is not a bad thing to do, certainly I recommend that for Canadian clients, and have prepared Deeds of Gifts, but I have never had CRA review one. 

There are no limits on gifts.   The underlying reason is because the money is already tax paid by the person making the gift.