Starting a business in Brazil as a foreigner, or to hold shares in a Brazilian company, whether residing in the country or not, is possible. However, certain requirements must be met, and some bureaucratic procedures need to be followed.
A World Bank study (Doing Business Subnational Brazil) shows that Brazilian entrepreneurs must follow several steps to start a business – and for foreigners interested in doing business in Brazil, the number of required steps may increase.
The process can vary depending on whether the foreigner is a resident or a foreign investor looking to bring capital into the country.
Let’s take a close look into the process and the steps to be followed in order to achieve great results as a businessperson in Brazil.
Can a Brazilian citizen and a foreigner open a company?
It is possible to open a company in Brazil with a foreign partner, but it is essential to understand the requirements and procedures involved. Both foreign individuals residing in Brazil and those who are non-residents can be part of a Brazilian company’s corporate structure.
For a foreign partner who is not a resident in Brazil, it is necessary to register with the Individual Taxpayer Registry (CPF) and grant power of attorney to a representative, who can be either a Brazilian or a foreign resident in Brazil with a permanent visa.
This representative will act on behalf of the company before the Central Bank, the Federal Revenue Service and other Brazilian authorities in matters related to corporate affairs. While a non-resident foreign partner cannot serve as an administrator, they can be part of the board of directors.
For a foreign partner residing in Brazil, it is relevant to prove to the Commercial Boards that they hold a permanent visa. With this documentation, they can not only be a shareholder or owner of the company but also act as an administrator.
Companies can be formed exclusively with foreign partners, provided that the business activity complies with Brazilian regulations, as there are restrictions on foreign capital participation in certain sectors.
Opening a company with a foreign partner in Brazil is feasible but requires meeting specific requirements, depending on whether the partner is a resident or non-resident. Careful planning and consideration of financial, accounting, and tax aspects are essential to ensure a smooth process that complies with Brazilian legislation.
Read also: Understanding Brazilian accounting standards
What does a foreigner need to open a company in Brazil?
Let’s take a closer look into what it takes for a foreigner to open a company:
1. Fixed residency or permanent visa
To obtain an investor visa in Brazil, a foreigner must prove an investment of at least R$150.000 and the hiring of Brazilian employees.
The general rules for this type of visa are outlined in Normative Resolution No. 84 of the National Immigration Council.
2. Residency in another country
A foreigner can be a partner or shareholder in Brazilian companies without residing in the country. To do so, they must – as a first step – register with the Federal Revenue Service to obtain the Individual Taxpayer Registry – CPF.
Additionally, they must appoint a legal representative residing in Brazil with the authority to receive legal notifications. Once these steps are completed, the foreigner is eligible to invest in Brazilian companies, whether new or existing.
If the foreigner enters Brazil on a temporary visa, they will only be considered a tax resident if they have an employment relationship, obtain a permanent visa (residence authorization), or stay in the country for more than 183 days—whether consecutive or not—within a 12-month period.
Starting a business as a foreigner residing abroad?
For a foreigner residing abroad who wants to open a company in Brazil and perform corporate functions in the country, having a CPF and a Brazilian address is required. Additionally, they must present a specific power of attorney to the Commercial Board, granting a local representative the authority to receive legal notifications in lawsuits filed against them. This document must be notarized at a public notary and/or a Brazilian embassy.
A copy of an identity document must be submitted for individuals, while legal entities must provide an authenticated or legally certified company registration document, verified by a Brazilian authority.
Check out our step-by-step guide on how to open a company in Brazil.
Read also: Tax in Brazil
Starting a business in Brazil: step by step
Here is a simple guide to enlighten the future steps of your business.
- Planning and preparation
Starting a business in Brazil requires thorough planning and preparation to avoid documentary errors that can delay or jeopardize the process.
The first step is gathering all necessary information and documents to submit to the relevant authorities.
- Defining the legal entity
The next step is choosing the appropriate legal entity for your business, for instance LLC or Corporation.
The most appropriate move will be to identify your current and future business activities in Brazil after reaching out to an accounting specialist, such as Europartner.
- Articles of association registration
After planning, you need to draft articles of association containing information like a company name, shareholder’s list, company address, shared capital amount, business activity, and company’s manager (who must reside in Brazil).
You’ll also need to complete other forms and submit them to the local Chamber of Commerce, with registration costs varying by state.
- Registration with public authorities
Following the Articles of Association, you must register with federal, city, and state authorities. Depending on your business activities, you might also need to register with specific trade unions or other public bodies.
- Company registration with BACEN (Central Bank of Brazil)
Businesses with foreign shareholders must register with BACEN to receive a fiscal ID number for remittances to Brazil. This can be done online, and you’ll need to provide information on the Final Beneficiary Owner (UBO).
- Opening a Bank Account
The final step is opening a bank account for your legal entity, which can take on average 10 to 20 days. You’ll need to provide documents like shareholder documents, taxpayer ID, and the Articles of Association.
The most efficient way to start a business in Brazil
Starting a business in Brazil as a foreigner involves legal, tax, and bureaucratic requirements, whether you reside in the country or abroad.
While the process can be complex, having the right guidance can make all the difference in ensuring a smooth and efficient business setup.
Europartner is the best choice for foreigners looking to start a business in Brazil.
With years of experience in accounting and corporate consultancy, our team offers expert guidance on company formation, tax compliance, and all necessary legal procedures. We simplify the process so you can focus on growing your business in one of the world’s most dynamic markets.
If you are ready to expand your business to Brazil, contact Europartner today and let us help you every step of the way!
