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What is CNPJ in Brazil?Posted 23/04/2020
A CNPJ in Brazil is a unique identification number that is assigned to all businesses in the country. No matter the size or nature of your business, you need to get your CNPJ to start your activities according to the Brazilian legislation.
If you or your business partners have any inquiries about this topic or would like to know more about it, in this article you will find the complete CNPJ guide.
The following topics will help you to understand:
- What a CNPJ is;
- Which companies should have one;
- What obligations you will have from the issuance;
- How can a foreigner issue a CNPJ.
Also, the Brazilian legislation can be quite complex, so it’s very helpful to count on accounting, legal and tax consulting. Furthermore there will be specific and important information about it.
If you are planning to open a business in Brazil, this is the best moment for it, and Europartner can guide you throughout the process.
What is a CNPJ?
The acronym CNPJ stands for “Cadastro Nacional de Pessoas Jurídicas”.
It is also known as the Corporate Taxpayer Number.
It is issued by the Brazilian Federal Revenue Service (RFB) and serves to identify and individualize a company, to be able to follow all its administrative and financial movements, such as, for example: the issuance of invoices or the payment of taxes.
The CNPJ has the following configuration: XX.XXX.XXX/XXXX-XX and is made up of only numbers.
Among its main functions, we can mention:
- Identify and register Brazilian companies, for tax, labor, accounting, and other purposes.
- Allow companies to carry out economic activities. It is required by law for opening bank accounts, hiring employees, and carrying out other commercial activities.
- Facilitate the payment of taxes and contributions of companies. It is used to generate payment slips and to identify which taxes companies must pay.
- Provide information about companies to business partners: The CNPJ is a registration that can be presented to prove your name, address, and economic activity.
What is the difference between CNPJ and CPF?
While the first is the Corporate Taxpayer Number, the CPF is the Brazilian Individual Taxpayer Registry.
It is a unique 11-digit number assigned to all Brazilian citizens and permanent residents.
The main difference is that CPF is for individuals, while CNPJ is for legal entities.
Which companies should have a CNPJ?
According to Brazilian law, all businesses are required to have a CNPJ, regardless of size or sector.
Companies characterized as Corporations, Cooperatives, Associations, Foundations, and Non-Profit Organizations must be regularized with the Brazilian Federal Revenue Service.
In some situations, individuals can also have a CNPJ. This occurs, for example, when an individual provides professional services or carries out economic activities as an independent contractor.
If you reside outside of Brazil and would like to start a business in the country, it is also possible to do so and we will explain in this article what to do and what type of company can help you.
What are the obligations of those with a CNPJ?
Companies with a CNPJ have a series of obligations, including:
- Pay federal, state, and municipal taxes and contributions.
- Companies are required to issue invoices for all sales of goods and services.
- Companies are required to maintain regular accounting, which must be audited by an accountant.
- Companies are required to comply with labor and social security regulations, which govern labor relations and pension benefits.
How can a foreigner issue a CNPJ in Brazil?
A foreigner can get a CNPJ and open a business in Brazil, as long as they meet the requirements demanded by Brazilian law.
The legislation is quite complex, and counting on staff with experience in company formation and local procedures is a great advantage.
The basic requirements for opening a business by a foreigner in Brazil are:
- Be over 18 years old;
- Have full civil capacity;
- Not be legally prevented from engaging in business activities;
- Have a permanent residence visa in Brazil, if applicable.
In addition, the foreigner must choose the type of company they want to open, which will be determined according to the size of the business and the economic activity to be developed.
The types of companies available to foreigners in Brazil are:
- Individual Entrepreneur: The individual entrepreneur is responsible for the company, being responsible for its obligations with their personal assets.
- Limited Liability Company: The limited liability company is composed of two or more partners, who are responsible for the obligations of the company with their social assets.
- Public Limited Company: The public limited company is composed of a minimum of 7 partners, who are not responsible for the obligations of the company with their personal assets.
After choosing the type of company, the foreigner must follow the following procedures to open a business in Brazil:
- Obtain the CNPJ: The CNPJ is the National Registry of Legal Entities, and is the mandatory registration of all businesses in Brazil. The CNPJ can be obtained directly on the website of the Brazilian Federal Revenue Service.
- Register the company: The company must be registered with the Commercial Registry of the state in which it will be headquartered.
- Obtain the State Registration: The state registration is required for companies that will carry out activities subject to ICMS – a local fee.
- Obtain the Municipal Registration: The municipal registration is required for companies that will carry out activities subject to ISSQN – another local fee.
- Obtain the License to Operate: The license to operate is issued by the municipality in which the company will be headquartered.
Specific requirements for foreigners
Foreigners who want to open a business in Brazil must meet additional requirements, depending on their residency status.
Foreigners residing in Brazil
In addition to the basic requirements, foreigners residing in Brazil must:
- Prove that they have a permanent residence visa in Brazil.
- Prove that they have the financial capacity to invest in the business.
- Prove that they intend to develop economic activity in Brazil.
Foreigners not residing in Brazil
In addition to the basic requirements, foreigners not residing in Brazil must:
- Appoint a proxy in Brazil to represent the company.
- Obtain a permanent residence visa in Brazil, if applicable.
Also, the business partner must be Brazilian; a foreigner with a permanent visa, or this foreigner must be represented by a Brazilian person.
Some specific details about these procedures have been updated, so it’s highly recommended to consult a specialized agency to enlighten about it.
For this purpose, Europartner is one of the very few Brazilian accounting firms to offer legal representation of foreign partners and legal administration of companies.
Would you like to issue a CNPJ in Brazil? Follow these steps
It is important to consult with an accountant to get guidance on the legal and regulatory requirements for opening a business in Brazil.
Although the country offers numerous opportunities for foreign investors, the bureaucratic process requires attention – and patience. That’s exactly why it’s important to be backed up in legal and accounting terms.
For instance, opening a CNPJ allows you to carry out the following activities:
- Open a bank account;
- Hire employees;
- Issue invoices;
- Buy and sell goods and services
The process of opening a business in Brazil can be complex, so it is important to plan ahead. You can save time, effortlessly, if you count on the services of a qualified company to guide you.
By following the steps outlined in this article, you can increase your chances of opening a CNPJ successfully.
Here are some additional tips to increase the success of your process:
- Start the process early. It can take several weeks or even months to complete all of the required steps.
- Be prepared to provide documentation to support your application. This may include proof of residency, citizenship, and financial capacity.
- Hire a qualified accountant or attorney to help you navigate the legal and regulatory requirements.
- The Brazilian government offers tax incentives for foreign companies investing in Brazil.
- Brazil is a growing market with many opportunities for foreign companies.
If you consider opening a business in Brazil, Europartner is the best company to help you navigate the process and comply with all Brazilian regulations.
Local support is essential to avoid any further problems you might face. Europartner’s team has the experience and expertise to provide you with a turnkey operational structure made up of lawyers, accountants, and tax specialists.
We would love to know if this article has solved all your questions, so you can start investing in Brazil as soon as possible. Please, leave a comment and let us know your impressions or further problems.
If we can assist you in any part of your process, contact us now at the phone numbers listed on our website, or click on the links available here.
We will be glad to help you invest abroad.Author's post: Europartner Accounting