Intertrust N: What type of entity is best for you to set up in Brazil?

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Navigate the opportunities and challenges of incorporation and expansion in Brazil.

Bordering almost every other country in South America, Brazil is an emerging economic power and a gateway to Latin America.

As a member of the so-called BRICS economies – along with Russia, India, China and South Africa – Brazil is expected to become one of the world’s leading economies in the 21st century. The Federal Presidential Republic comprises 26 states and a Federal District which houses the capital, Brasilia.

Brazil is the 12th largest economy in the world and the largest in Latin America. It has one of the world’s largest mining industries, a huge agricultural sector, and a thriving service sector that accounts for over two-thirds of the country’s gross domestic product (GDP).

The Brazilian government generally welcomes and actively seeks foreign investment, especially if it encourages new technologies and job creation. However, the structure of incorporation can be complex and there are a number of different options open to investors doing business in Brazil.

1. Know if your industry is restricted to foreign investors

Although Brazil is generally open to foreign investors, certain strategic sectors remain either reserved for Brazilian investments or subject to government authorization. These include the media, postal services, private security and transport, nuclear energy, rural real estate, activities in international border areas and cabotage (domestic air transport operated by companies foreign airlines).

2. Make sure you are registered with the correct authority

Foreign direct investments must be registered with the Central Bank of Brazil and investments in the securities market must also be registered with the Brazilian Securities Commission. Foreign investments in Brazilian companies and loans granted to Brazilian companies or individuals must be registered with the Central Bank.

3. Understand the different business entities in Brazil

The most common forms of business entity in Brazil are:

  • limited liability company (sociedade limitada – LTDA)

  • limited liability company with a single shareholder (empresa individual de responsilidade limitada – EIRELI)

  • public limited company (sociedade anonima – SA)

The first two vehicles only require one shareholder, while public limited companies require at least two. Although shareholders do not have to be residents or citizens of Brazil, only permanent residents can be appointed executive directors.

4. Allow time to become officially incorporated.

Any business in Brazil needs at least 30 days to set up. Public limited companies and public limited companies are required to file the deeds of incorporation with the commercial register of the State in which they have their registered office.

Entities must also register with the national taxpayer register and apply for any authorization required by their sector.

5. Explore your options for starting a business in Brazil

Choosing the right entity option depends on your business plans in Brazil.

Limited liability company: requires no minimum capital and is easy to set up, with few formalities for operations and financial reporting.

SARL with sole shareholder: this combines the advantages of a separate legal entity – such as a limited liability company or a public limited company – with the advantage of allowing a single shareholder. However, this company vehicle requires a minimum capital of at least 100 times the current minimum wage, which must be paid in full upon incorporation.

Anonimous society : Due to their extensive compliance requirements, limited companies are considered a more complex form of legal entity and, as such, are preferred for businesses that require a more sophisticated business structure or alternative fundraising options.

6. Consider alternatives to an autonomous business in Brazil

Foreign investors who do not wish to set up a stand-alone business in Brazil can choose to open a branch or representative office instead. The establishment of a branch requires a long license from the federal government which is only granted for 12 months, during which the company must develop its activities under penalty of losing the authorization to operate.

How Intertrust Group can help you in Brazil

Before entering the Brazilian market, foreign investors should rely on professional advice to navigate these complex issues. Working with a trusted partner is therefore essential to avoid the pitfalls common in this exciting country.

Our team in Brazil includes experts specializing in administrative services dedicated to multinational clients, private equity and funds. We are able to help client businesses looking to expand there with a full range of services from our office in São Paulo.

Why Intertrust Group?

  • Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment.

  • We are experts in management and administration services to operating companies and holding companies.

  • In Brazil, our office relies on a trusted network of local lawyers and accountants to provide the best tailor-made solutions to our clients.

  • We offer a wide range of services to international investors – whether they are companies or investment funds


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