How to Incorporate a Business in Brazil: FAQ for Foreign Investors
Based on our extensive experience with assisting foreign investors, we have put together a list of the most frequent questions made by our clients with respect to the incorporation and operation of a business in Brazil. Below are brief answers to those questions.
Together, the questions and answers provide a comprehensive view of the main legal aspects of opening a company and doing business in Brazil.
Can a foreign person own a business in Brazil?
Yes, with the exception of a few limited business industries that are deemed to be of public interest (for example, oil refinery and postal services).
Are foreign persons required to have local partners to incorporate a business in Brazil?
As a rule, local partners are not required for the incorporation of a legal entity in Brazil. However, certain regulated activities may require a local partner (for example, online gambling).
What is the minimum investment (minimum corporate capital) required to start a business in Brazil?
As a rule, no minimum corporate capital or investment is required to incorporate a legal entity in Brazil. The corporate capital should reflect the capital needs of the company. However, certain regulated industries may require a minimum corporate capital (for example, financial services, insurance and online gambling).
What types of business entities are available in Brazil?
The most common types of legal entities in Brazil are the limited liability company (sociedade limitada) and the corporation (sociedade anônima). Both types of entities confer limited liability to their equityholders.
Each of the limited liability company and the corporation are subject to specific rules and have specific features. The characteristics of the investment and the needs of the equityholders will determine which type of entity is more suitable for the specific transaction. Additional information on this topic may be found at https://mmrlaw.com.br/?p=340&lang=en.
Can a foreigner act as a director, officer or administrator of a Brazilian entity?
Yes. However, if the foreign person does not reside in Brazil, that person needs to grant representation powers to an attorney-in-fact that resides in the country in order to act as a director, officer or administrator of a Brazilian entity.
What are the legal steps to start a business in Brazil?
You may find a short guide on how to incorporate and operate a business in Brazil at https://mmrlaw.com.br/?p=250&lang=en.
Is a foreign investor required to have an attorney-in-fact in Brazil?
Yes, a foreign investor is required to grant representation powers to an attorney-in-fact that resides in Brazil.
Is a tax ID necessary to hold equity in a legal entity in Brazil?
Yes. Every foreign person that holds equity in Brazil is required to have a tax ID issued by the Brazilian Internal Revenue Services (Receita Federal do Brasil). The Cadastro de Pessoa Física – CPF is issued to individuals and a Cadastro Nacional da Pessoa Jurídica – CNPJ is issued to legal entities. The CPF and the CNPJ may be obtained at the time the foreign person is registered with the Central Bank of Brazil as part of the foreign investment.
Is it necessary to register a foreign investment in a Brazilian entity with any authorities?
Foreign investments in a Brazilian entity involving amounts that are equal to or greater than US$ 100,000.00 are required to be registered with the Central Bank of Brazil.
Is a physical address in Brazil necessary to incorporate a legal entity in the country?
Entities with activities that do not require physical space (such as purely managerial activities) may be incorporated with a “virtual address”. However, entities with activities that require physical space (such as industrial activities or activities that require the storage of goods) must have a physical address compatible therewith.
How long does it take to incorporate a legal entity in Brazil?
Once all relevant documents are filed with the relevant registry of commerce (junta comercial), it usually takes from one to four weeks to incorporate the legal entity.
What is the taxation of a business in Brazil?
The tax system in Brazil is complex and it is advisable that foreign investors understand how it applies to their specific activities as part of the process of starting a business in the country. Taxes include income tax, taxes on services, taxes on sales of goods and taxes on industrialization.
As part of the Brazilian tax reform approved in 2023 (which greatly affects taxes on services and taxes on sales of goods), different rules will apply throughout the upcoming years until 2033, when the new tax regime is fully in force and has replaced the current tax regime.
Do foreigners need a visa to enter Brazil?
Brazil adopts a policy of reciprocity regarding visas. This means that nationals of countries that require visas for Brazilian citizens will need a visa to travel to Brazil. Visa reciprocity details may be found at https://www.gov.br/mre/pt-br/assuntos/portal-consular/vistos/QGRVsimplesing04JUN241.pdf.
Available visas include:
- visit visa, which allows a stay of up to 90 days in the country. This visa does not allow the foreigner to engage into paid work in Brazil; and
- temporary visa, which allows a stay of up to 1 year. This visa allows the foreigner to engage into paid work in Brazil, including as a foreign investor.
How can I protect my intellectual property in Brazil?
The protection of trademarks and patents may be obtained by means of registering their ownership with the National Institute of Industrial Property (Instituto Nacional da Propriedade Industrial – INPI). Copyrights are also protected under Brazilian laws.
Are foreign documents valid in Brazil?
In order to be valid in Brazil, foreign documents need to be apostilled as per the Hague Convention, translated into Portuguese by a sworn translator and then registered with the local titles and deeds registry office. If the issuing jurisdiction is not a signatory to the Hague Convention, the foreign documents need to be notarized and legalized in a Brazilian Consulate (instead of being apostilled).
What are the legal requirements for hiring employees in Brazil?
Brazil has in place strong employee-protective labor laws and understanding the different forms of retaining workers is essential to operate in the country. Depending on how the workforce is retained, a formal employment relationship may be mandatory and, with it, certain charges, duties and obligations apply.
MMR – Mastrocola Marcondes Rocha Advogados is fully prepared to assist foreign investors in all steps involved in the incorporation and operation of a legal entity in Brazil. Our lawyers’ broad experience both in Brazil and abroad (our partners have been representing foreign clients for over 20 years) allows us to provide our foreign clients customized solutions for each of their particular needs, objectives and challenges. Please reach out to learn more about how our firm can assist you with your legal needs in Brazil.