Planning to register a company in Brazil? This guide is perfect for you and your company.
Firstly, the timing is great: the government of Brazil welcomes foreign investment by exempting taxes, providing funds, limiting double taxation, and simplifying the process to Brazil company register. These are all important factors to strengthen business opportunities in the country.
Brazil has made gradual progress in creating a friendly business environment to capture foreign investment. Year after year, the country successfully exports goods and services, making it an attractive destination to Brazil company register.
Furthermore, Commercial Service in Brazil highlights seven core sectors, namely: infrastructure, energy, chemical, health, defense, aviation, information and communication technology.
The Brazilian market offers specific market opportunities for businesses all over the globe. If you plan to do business, you must be thoroughly aware of the rules and regulations, including how to properly register your company.
This is why we set this guide for you.
What are the benefits of Brazil company register?
In fact, there are many advantages, and we will guide you along some of them:
Huge consumer market: Brazil holds one of the highest position in terms of population. Needless to say, the market diversity and size create many commercial opportunities for foreign business.
Attractive government schemes: To set up an offshore company in Brazil, the Brazilian government has imparted its “pro business” foreign investment schemes for entrepreneurs. They aim to create a legally safe and secure environment for potential entrepreneurs.
What does a foreigner need to register a company in Brazil?
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With permanent residence or a permanent visa
To obtain a visa as an investor in Brazil, foreigners need to prove that they have invested at least R$500,000 and hired Brazilian professionals.
The general rules for this type of visa can be found in Normative Resolution 84 of the National Immigration Council.
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Residing in another country for Brazil company register
Foreigners can be partners or shareholders in Brazilian companies without having residency in the country. To do this, they will need to register with the Federal Revenue Service (to obtain a CPF or Individual Taxpayer’s Registry) and with the Central Bank of Brazil (Bacen), through the Electronic Declaratory Register (RDE), as well as having an attorney-in-fact resident in the country with powers to receive summons. From then on, the foreigner will be able to invest in Brazilian companies (new or existing).
Furthermore, if they entered Brazil on a temporary visa, foreigners will only be considered tax residents if they have an employment relationship, obtain a permanent visa (residence permit) or stay in the country for more than 183 days, consecutive or not, within a 12-month period.
How to register a company if you are a foreigner living in Brazil?
Moreover, if a foreigner sets up a company in Brazil, the person can incorporate or have a stake in companies in the country, whether or not he/ she lives in the country, as long as he/she meets certain requirements. In any case, the foreigner will need to register with the CPF (Individual Taxpayer’s Register).
The process is the same as for foreigners residing in the country, including the following documents: a certified photocopy of the RNE (National Foreigner Registration), an identity document issued by a Brazilian authority, and the CPF (Individual Taxpayer’s Register).
Then, the holder must present themselves at the Board of Trade and show proof of a permanent visa, and may be asked for the document provided by the Federal Police Department, indicating the registration number.
How to register a company for foreigners living abroad?
In order for a foreigner to open a company in Brazil who has a residence abroad, with social functions being carried out in Brazil, with a Brazilian CPF and address, it is necessary to present a specific power of attorney to the Board of Trade, granted to the representative here in the country, giving them the power to receive judicial summons in actions brought against them. This must be notarized and/or embassy-certified.
The identity document must be presented as a certified photocopy for natural persons and legal entities must present the company’s legal requirement certified or endorsed by a Brazilian authority.
How to register a company as a Brazilian living and domiciled abroad?
So, here we are talking about Brazilians who have left Brazil and informed the Internal Revenue Service about the move, so they don’t have their social functions in the country.
When you live abroad, to open a company you need to follow the opening process with a specific power of attorney to a person here, who passes on their powers so that they can sign the processes and file the documents.
What is the best format for starting a business for foreigners?
In order to open a company for a foreigner in Brazil, we need to talk about the format for opening a company, and here you should know that there are three variables that have an impact on this: the legal format, the tax regime and the size of the company.
Foreign entrepreneurs can open their company as an individual or as an “EIRELI”. To do this, an attorney is needed to resolve the bureaucratic issues in Brazil.
An important point is that this entrepreneur will not be able to opt for the “Simples Nacional” tax system reserved for companies hold by Brazilians partners. They will generally be classified as “Limited Liability Company”.
From this moment on, it’s advised to count on legal and accounting services.
In addition to all these formalities, all documents of foreign origin must be registered at the Registry of Deeds and Documents, accompanied by the respective translations. This registration is necessary to produce effects in the offices of the Union, the States, the Federal District, the Internal Revenue Service, the Territories and the Municipalities or in any instance, court or tribunal.
Types of business structures in Brazil
Here are some of the various business structures:
Limited liability company
- Shareholders are limited to their share capital.
- At least two shareholders are needed – belonging to any nationality.
- There is no requirement for minimum capital for limited liability companies.
EIRELI
- This is a single-holder limited liability chosen by most individual entrepreneurs.
- Only one shareholder is held responsible for all the company shares.
Corporation
- The Corporations Act governs the limited liability corporation.
- Corporations can avail of both voting and non-voting shares.
- Two shareholders are needed.
- Limited liability corporation’s minimum initial share capital should be 100% subscribed. A minimum of 10% of the capital should be deposited to the bank before incorporation.
Branch Office
- The branch offices direct extensions of a parent organization.
- Its entity should have a similar name in Brazil.
- It’s mandatory to point a legal representative to set up a branch office in Brazil.
Company Registration Process
The simple step-by-step to incorporate a company in Brazil are given below:
Step 1: Obtain a Brazilian tax identification number to register a company in Brazil
- Before registering any company in Brazil, two shareholders must get their Brazilian tax identification number.
- This tax identification number in Brazil is provided by the Federal Revenue Bureau either in person or online.
- In the case of companies, it is known as the CNPJ, while for individuals, it is the CPF.
- The Special Department Federal Revenue Bureau is responsible for providing the CNJP.
- To obtain CNPJ, you must register your company at the State Board of Commerce.
Step 2: Legal representative appointment
- To represent your company, you must appoint a legal representative in Brazil.
- You have to draft and sign a Power of Attorney, allowing them to act on your behalf and make decisions.
Step 3: Drafting company bylaws
- Draft a company’s bylaws, including details on the company’s structure, nature of business, and internal procedures.
- A legal representative can assist the company owners in drafting company bylaws.
Step 4: Registering company’s bylaws
- Once the bylaws are drafted, you must contact the local Board of Trade to register your business. Afterwards, the registration will be extended to municipality, state and the federation.
Step 5: Corporate bank account opening
- After your business gets registered before the authorities, you can open a company bank account.
- Here, take the legal representative’s help to choose a suitable service provider according to the structure and nature of the business.
Step 6: Registering paid capital
- In this step, you can proceed with the paid capital registration associated with the Central Bank of Brazil.
Step 7: Initial capital deposition
- This is the final step: depositing the initial capital in the company’s corporate bank account.
Activities forbidden to foreigners in Brazil
There are some prohibitions on foreigners starting a business in Brazil under Brazilian law, such as investments in activities related to nuclear energy, health services, postal and telegraph services and the aerospace industry.
There are also restrictions on foreign investment in certain economic activities, such as participation in financial institutions, the exploitation of the mining sector, the operation of public air services and the ownership and management of newspapers, magazines and other publications, as well as radio and television networks.
In addition, here are the activities that foreigners cannot carry out in Brazil without the presence of Brazilians:
- Foreign-owned companies in the health care sector: no foreigners may participate, except in cases where, for example, organizations linked to the UN make donations.
- Shipping company: in this case, foreigners can only be part of a company and their shareholding must be less than 50% of the company’s capital.
- Journalistic, sound and image broadcasting companies: only native Brazilians or foreigners who have been naturalized for more than 10 years.
- Cable TV company: its constitution must be made up of 50% native Brazilians or those who have been naturalized for more than 10 years.
- Road freight transportation company: four-fifths of the company’s constitution must be made up of Brazilians.
- Mining company: a company whose composition must be 51% Brazilian.
Brazil was once considered one of the most bureaucratic countries in the process of starting a business, according to a study by the World Bank. It takes a Brazilian at least 30 to 45 days to complete the 13 steps required to set up a company.
For a foreigner starting a business in Brazil, these 13 steps turn into 22, which can take up to 180 days. In the United States, it takes an American six days to open a business, while a foreigner takes a maximum of ten days.
Finally, this is why it’s strongly advised to count on specialized guidance to help you and speed up the process.
Contact Europartner right now.
