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Step-by-step guide for you to start a business in BrazilPosted 05/04/2023
Brazil is seen as a promising country, with numerous opportunities for foreign investors. After a thorough market analysis, many of them start the process of starting a business in Brazil.
This is the moment that certainly requires more care, because the country has many laws, standards and bureaucratic processes. These are procedures that require attention, especially due to fiscal and tax aspects.
But it is a fact that not all foreign entrepreneurs are backed up in legal and accounting terms to open a company in Brazil. For this reason, continue with the reading of this Europartner article and check out the step-by-step guide on how to open a business in Brazil!
First Step: planning to register a company in Brazil
Planning to open a company in Brazil is very extensive, which involves several points. The first of them is a market study to identify opportunities and threats to your business model.
In addition to this, try to gather all the information and documents that are requested by bodies such as city hall and the Federal Internal Revenue Service. After all, you will have to provide some relevant data to the authorities throughout the business opening process.
Second step: definition of the legal nature
The incorporation of a company in Brazil derogatorily has to go through the choice of the type of company. The main types are:
MEI: corporate model for entrepreneurs without partners. The individual micro entrepreneur has a society CNPJ and can issue an invoice. The allowed annual revenue is up to R$ 130 000 reais.
Individual Entrepreneur: also, does not require partners, in fact, the entrepreneur is the sole owner, and the company’s registration bears his name. The revenue is up to R$ 360,000 per year.
Single Member Limited Company: The SMLC is also intended to entrepreneurs without partners. The advantage of this model is the protection of personal assets in case of lawsuits due to company debts.
Limited Liability Company: The LTDA is the most common type of company used by entrepreneurs who have partners. There is no billing limit.
Public Limited Company: The SA is the most common company used by investors.
Third step: choose the physical address of the company
To establish a company in Brazil, the partners or sole proprietor must define a physical address for business operations. In addition, the address has to be compatible with the enterprise’s activity.
For example, an industrial company cannot operate in a residential area. The address is also used to register the bylaws, which include the value of the capital stock destined to the opening of the business.
Fourth step: preparation and registration of the articles of incorporation
The process of opening a business on Brazilian territory involves the completion of information in the articles of incorporation, which is forwarded to the Board of Trade. The costs of formalization of the articles of incorporation at the notary depend on each Brazilian state. In addition, the article of incorporation contains information such as:
- The name of the company;
- The address;
- Information about the shareholders;
- Information about capitals;
- Data on the commercial activities performed;
- Information about the company’s management (legal representative or legal administrator);
Registration of foreign shareholders with the Brazilian authorities
It is essential for foreign entrepreneurs to have registration of taxpayers with the Brazilian Federal Internal Revenue Service. Therefore, it is recommended to appoint a physical entity residing in Brazil, who has powers of representation before and can manage the assets in Brazil.
Opening of bank account
This is the last step of the company constitution process, however, no less important. The opening of a legal entity account helps the company to have benefits such as financing and loans. For this, the owner of the company must submit the following documents:
- Documents of the partners;
- Bylaws of the Brazilian enterprise;
- CPF of the Brazilian entity;
- Financial statement of the Brazilian company;
- Personal documents of the director of the Brazilian entity.
In addition, it is worth seeking accounting firms in Brazil specialized in the accounting standards. Europartner can help throughout the entire process of opening your business in Brazil, guiding you on the required steps.Author's post: Europartner Accounting