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7 steps to open a business in Brazil without having trouble

Posted 2018-07-05

It is not easy to open a company in Brazil, it is a long and bureaucratic process, that can generate stress. It is essential to have qualified partners, prepared to deal with accounting, legal, bureaucratic and administrative matters, to avoid setbacks.

To help you understand how the whole process works, we listed the most important aspects of starting a business in Brazil, in a brief 6-step guide:

Cropped image of businessman’s hand writing on paper in office

Type of Company

When all the documents have been provided, you are ready for the second step to open a company in Brazil: choose the best legal type of company. In Brazil, the most common type is the Limited Company (LTDA). The company needs to be constituted by at least two partners, but a partner can be either an individual or a legal organization, and needs legal representation in Brazil, if the professionals are not Brazilian residents.

Another common type of company is S.A., when the corporation is formed by either public or private capital (either publicly- or closely-held companies) and has at least two shareholders for closely-held companies and three for publicly-held ones. A S.A. is divided into shares and dividends are distributed to the shareholders in the form of interest over capital. You need to decide what kind of company you will choose when you are considering starting a business in Brazil.

 

Documents

When considering opening a business in Brazil, the first step is to research the required documents. It is advisable to confirm if there is no other registered company with the same name.

All documents must be in Portuguese, including foreign documents. Non-Brazilian documents must also be apostilled  in the investor’s country of origin. They must then be translated by a sworn translator and registered in the Notary Office, so they are ready for registration within government agencies.

In this step, it is important to have a lawyer you trust, as it will require the help of one to sign the social contract.

 

Registration

After choosing the best type of company, it is time to register the legal entity and the corresponding shareholder(s) with the relevant institutions, for example the IRS. It is important to know that business registration in Brazil is required at federal, state and municipal levels. Once this process is completed, the company will receive a taxpayer, an identification number and will be part of the government’s public records. This is indispensable to be up to date with taxes in Brazil.

 

Licenses to operate

It is advisable to confirm the need to obtain special authorization from public entities to carry out commercial activities.

All commercial, industrial and/or service establishments need a prior license (or “alvará de funcionamento”, as it is called in Portuguese) from the municipality to operate. This license is the Operating and Location Permit. It must be requested from the city hall and the procedure for obtaining the permit varies according to the legislation of each municipality.

 

Bank account

Once all the records have been filed, it’s time to open a bank account for your company. This step is important not only to guarantee the operational efficiency in business, but also to continue to the next steps to open a company in Brazil.

 

Digital certificate

Once you have a commercial bank account, the fourth step is necessary to obtain an E-CNPJ certificate – the digital electronic identification and digital signature of the company. This certificate allows authentication in government or private systems – allowing companies to sign legal documents, issue electronic invoices (NF-e), among other things. This is one of the most bureaucratic steps when starting a business in Brazil.

 

Registration at the Central Bank

The last step refers to any foreign investment that will be injected into the Brazilian company. To invest in your business, it is mandatory to register the legal entity with the Central Bank of Brazil system. During this registration process, two important documents will be obtained: a CADEMP identification number for foreign investors and shareholders who bring in foreign direct investment, and a RDE-IED number, which is the foreign direct investment registration ID.

With these two important documents in hand, your Brazilian company will be ready to receive any amount of foreign investment, and then send your investment to the bank account of the Brazilian entity. Therefore, this is a fundamental step to continue investing in Brazil.

 

This step-by step is a guide to the process of opening a business in Brazil, but doesn’t include all the steps. For more detailed information and services, feel free to explore our website or contact us!

Author's post: Europartner Accounting

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