Create a Company in Brazil
Needing to create a company in Brazil and take advantage of its imposing market of consumers, establish a branch, export products or pursue an investment opportunity, Botinha & Cabral law firm can assist you and your company.
Our comprehensive assistance consists of different forms of incorporation of a business entity in Brazil, either limited liability company (LLC / LTDA.), a sole proprietorship enterprise or other business structures in Brazil.
Our full assistance is also concerned to make sure your company or startup is in compliance with Brazilian regulations.
Our Lawyers would also help you in licensing exports in Brazil, filing export applications and work with aduana and customs processes.
We help plan and put in place formal legal and accounting structures with adequate partnerships. At the same time, we are prepared to provide straightforward advice and local insight of practical usage. As a boutique firm custom-made for the foreign direct investment in the country, individuals, small business, medium or large corporations will take advantage of our tailored perspective for the foreign entrepreuner.
Our legal assistance is also prepared to aid investors and foreign expatriates with the legal advice necessary for them to legally operate in Brazil, on Visa and Tax matters.
Common Types of Business Entities in Brazil:
The Limited Liability Company (Ltda.)
Although there are many options for those interested in forming a company in Brazil, the most common type of company a foreigner can open in the country is the equivalent of a Limited Liability Company (LLC). In Brazil this is called “Sociedade de Responsabilidade Limitada” or only “Limitada”.
This type of company is used by the large majority of Brazilian business owners. Not only because it is simple and inexpensive to operate but because it contains the basic protection concept for its owners personal capital. It limits the liability to the amount of each of its shareholders quotas.
Any foreigner person or company can be a shareholder of a limited liability company in Brazil. A requirement, though, is that a representative for the company with registered domicile in Brazil be nominated in the articles of incorporation.
Also, even if the company is composed solely by foreigners, it is still considered a Brazilian company under the Brazilian legislation.
The Individual Corporation
Since the “Sociedade Limitada” company requires at least two shareholders to be created, many foreigners who wanted to bring their businesses to Brazil and be its sole owner faced a difficult situation. Either they would use their spouse or a Brazilian resident to be a partner. This situation often resulted in problems and conflicts because the other partner would have at least a certain percentage of the company’s capital, thus being entitled to corporate rights.
To solve this problem, in 2011 a federal law created the “EIRELI” (“empresa individual de responsabilidade limitada”) company model. This company model permits only one person to be the sole owner of a limited liability company, with a few restrictions:
- The company’s capital must be equal to at least a hundred Brazilian minimum wages, which for this year amounts to R$ 78.800,00
- The owner of the company cannot own another Eireli.
- The general rules for a “Sociedade Limitada” company will also be applied to the Eireli.
These are the two simplest forms of incorporating in Brazil.
Companies of Open capital are much less frequent than in other countries but are, of course, existing options. There are also civil (non-commercial) forms and other structures that are not registered types, with less requirements and still counting with a certain level of security to investors, such as the “SCPs” (“sociedades em conta de participação”).
Procedures for Investing Foreign Capital
Once the company format is chosen and the opening procedures are over, the foreign investing entity or individual will be able to send investments to the company owned in Brazil. The investor will now be able to fulfill the company’s capital by adding monetary resources.
Also assets, machines or equipments or anything related with the company’s business activities can be used to fulfill capital.
When bringing monetary resources from overseas, the investor must be aware that the investment must be properly registered at the Brazilian Central Bank.
The procedure is done through SISBACEN (Central Bank Information System), the IED (Foreign Direct Investment) module of the RDE (Electronic Declaration Register), within the Central Bank registration system. If this registration is not done by the legal timeframe, or if it’s done incorrectly, the investor and the company will be subject to penalty fees. These penalty fees are imposed by the Brazilian Government. Also, this process can affect the evaluation of a potential Investor Visa, if the Brazilian permanent visa is a need of the investor. The registration of investment is a requirement for the permanency residency of the the individual executive or investor.
The abovementioned registration procedure is also important if the foreigner investor needs to repatriate investment. The amount registered as RDE investment in the Central bank can be repatriated on its entirety by the investor. All this without having to pay any income tax. However, the amount that surpasses the original investment value is taxed on capital gains.
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