Brazil Laws and Regulations

Brazil is one of the most bureaucratic countries in the process of starting a business, according to a study carried out by the World Bank. A Brazilian takes at least 119 days to complete the 13 procedures necessary to establish a company.

In fact, Colligere Expat Consultancy (a specialized company that can help if you want to know how to move to brazil) made an entire article about weird laws in that country.

For foreigners to start a business in Brazil, these 13 steps become 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.

In this article you will see:

• Can a foreigner start a business in Brazil?
• Who can start a company in Brazil?
• What does a foreigner need to open a company in Brazil?
• How to open a company for those who are foreigners and live in Brazil?
• How to open a company for those who are foreigners and reside abroad?
• How to start a company if you are a Brazilian who lives and is domiciled abroad?
• What is the best format for starting a business for foreigners?
• Activities prohibited to foreigners in Brazil
• Investments

Can a foreigner start a business in Brazil?

Yes, the opening of a company by a foreigner in Brazil is possible, and he may establish or have shares in companies in Brazil, living in the national territory or not. But it must meet some requirements and carry out some bureaucratic procedures.

Who can start a company in Brazil?

According to the civil code, anyone who is in full civil capacity and who is not legally impeded can start a business. Check out:

1. Over 18 years old, Brazilian or foreign

who find themselves in the free administration of their person and goods. The foreigner must be domiciled in the country or appoint a proxy to represent him.

2. Emancipated minors or those who reach the age of majority

by permission of the parents, or one of them in the absence of another, if the minor is sixteen years old. The grant will consist of a public instrument, which must be registered with the Civil Registry of Natural Persons and filed with the Commercial Registry;

by judgment of the judge, who must also be registered with the Civil Registry of Natural Persons;

by marriage;

for the exercise of effective public employment (servant occupying a position in a direct administration body, autarchy or federal, state or municipal public foundation);

for the graduation in a higher education course;

by civil or commercial establishment, or by the existence of an employment relationship, provided that, according to them, the minor aged 16 has his own economy.

What does a foreigner need to open a company in Brazil?

1. With permanent residence or permanent visa

To obtain a visa as an investor in Brazil, foreigners must prove that they have invested at least R$150,000 and that they have hired Brazilian professionals.

The general rules for this type of visa can be found in Normative Resolution No. 84 of the National Immigration Council.

2. With residence in another country

The foreigner can be a partner or shareholder in Brazilian companies without having residency in the country. For this, he will need registration with the Federal Revenue (to obtain a CPF) and with the Central Bank of Brazil (Bacen), through the Electronic Declaratory Registry (RDE), in addition to having a mandatory attorney residing in the country with powers to receive summons . From then on, foreigners will be able to invest in Brazilian companies (new or existing).

If entering Brazil with a temporary visa, the foreigner will only be considered a tax resident if he has an employment relationship, obtains a permanent visa (residence permit) or stays in the country for more than 183 days, consecutive or not, within the range of 12 months.

How to open a company for those who are foreigners and live in Brazil?

The opening of a company by a foreigner in Brazil, he can constitute or have participation in companies in the country, living or not in the country, as long as he meets certain points. In any case, it is worth remembering that the foreigner will need to register with the CPF.

The process is the same as for foreigners residing in the country, including the documents: certified photocopy of the RNE, National Registry of Foreigners, and identity document, issued by a Brazilian authority, CPF, Cadastro de Pessoa Física.

The holder must present himself at the Commercial Registry and show proof of permanent visa, and the document provided by the Federal Police Department may be requested, indicating the registration number. See how much it costs to open a company in Brazil.

How to open a company for those who are foreigners and reside abroad?

For the opening of a company by a foreigner in Brazil who resides abroad, with social functions being fulfilled in Brazil, with a Brazilian CPF and address, a specific power of attorney must be presented to the Board of Trade, granted to the representative here in the country, empowering him to receive summons in lawsuits filed against him. This after notarized signature and/or embassy.

The identity document must be presented in a certified photocopy for an individual and the legal entity must present the legal requirement of the company authenticated or endorsed by a Brazilian authority.

Check out our step by step how to start a business

How to start a company if you are a Brazilian who lives and is domiciled abroad?

Here we are talking about the Brazilian who left Brazil and informed the IRS about the change, which is why he does not have his social functions in the country.

When domiciled abroad, to open a company you must follow the opening process with a specific power of attorney to a person here, who passes on his powers so that he can sign the processes and file the protocol.

What is the best format for starting a business for foreigners?

For opening a business by foreigners in Brazil, we need to talk about the format of opening a business, and here, know that there are three variables that impact this: the legal format, the tax regime and the business size.

Foreign entrepreneurs can open their business in an individual format, such as Eireli e Sociedade Ltda. For this, he will need a prosecutor so that he can resolve bureaucratic issues in Brazil.

An important point is that this entrepreneur will not be able to opt for the Simples Nacional Tax Regime. It will soon be classified as Presumed Profit.

The postage will be set to "too much." To be characterized as such, you will need legal advice from an intelligent online accounting service.

Remembering that it is necessary to send the documents for signature in physical form, also valid for the opening of a Sociedade Ltda.

In addition to all these formalities, all documents of foreign origin accompanied by their translations must be registered in the Registry of Titles and Documents. This registration is necessary to produce effects in departments of the Union, States, Federal District, Territories and Municipalities or in any instance, court or tribunal.

Activities prohibited to foreigners in Brazil

There are some prohibitions on investments to start a business by foreigners in Brazil, provided for in Brazilian legislation, 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 participating in financial institutions, exploring the mining sector, operating public air services and owning and managing newspapers, magazines and other publications, as well as radio and television networks.

See below the activities that a foreigner cannot carry out in Brazil without the presence of Brazilians:

Foreign Capital Company in the Health Care Segment: the participation of foreigners is prohibited, except in cases where, for example, organizations linked to the UN make donations.

Cabotage and Navigation Company: in this case, the foreigner can only be part of a company and his participation must be less than 50% of the company's capital. The individual format, without partners, only Brazilians will be able to develop these activities.

Journalistic company, broadcasting sound and images: only native Brazilians or foreigners naturalized for over 10 years.

Cable TV company: 50% of its incorporation must be native Brazilians or naturalized for more than 10 years.

Road Cargo Transport Company: four-fifths of the company's constitution must be made up of Brazilians.

Mining Company: company whose composition must be 51% Brazilian.