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Tips for starting a business in BrazilPosted 19/08/2022
Starting a business in Brazil is a strategic step for many foreign companies that wish to expand their operations. The country attracts investors due to its strong consumer market, but it is essential to be aware that opening a business in Brazil may be very complex.
After all, the region has many rules and regulations that have to be strictly fulfilled in the incorporation process. To operate in the national territory, organizations usually have to perform a number of steps that require the execution of several tasks.
Due to these many steps, the business opening process in Brazil becomes very time-consuming. All in all, the whole process typically takes 60 to 90 days. The good news is that you will get to know all the details about the 6 major steps for business consolidation in Brazil with Europartner. Proceed reading!
1. Planning and preparation
Consolidating a business in Brazil is an activity that requires planning, and does not permit lack of preparation. This is why any documental mistake may delay the opening process and even risking the whole process.
This is the reason to be aware that the first step to incorporate your business in Brazil is gathering information and documents. When all of them are available, forward the documents to the competent authorities to start the incorporation process.
2. Defining the legal entity
Another relevant aspect is defining the type of legal entity under which your business will operate in the South American country. The major options include, among others:
The most recent option, Eireli, is in summary, a joint-stock company, which counts on a single shareholder. In addition, this type of legal entity requires a minimum amount of capital to start operations.
Only pay attention to one detail: the type of legal entity you choose is based on factors, such as current or future business activity performed in the country.
3. Articles of association registration
Once developed and completed the planning step, gather all the information required to write the articles of association.
In addition, a number of other forms must be filled and submitted to the local Chamber of Commerce. The registration-related costs also vary depending on the Brazilian state chosen.
The articles of association must contain data, such as:
- Legal entity name (Eireli, Branch, etc.)
- Company name
- List of shareholders
- Company address
- Capital stock
- Business activity segment
- Company manager (must reside in Brazil)
4. Registration with public authorities
Once completed and submitted the articles of association, the next step is registering it with several authorities. The authorities that require mandatory registration are:
- Federal Tax Authority (Receita Federal)
- City administration
- State administration
Depending on the employees’ activities, it is essential to register the company in individual trade unions.
Also, some specific businesses (accountants, pharmaceutical companies, etc.) must be registered with other public authorities.
5. Company registration with BACEN (Central Bank of Brazil)
This is a mandatory step for all the businesses with foreign shareholders. Companies registered with BACEN receive a fiscal ID number, which is used for any remittances to Brazil.
This step can also be completed in an online form. However, make sure to provide all the information on the Final Beneficiary Owner (UBO).
6. Opening bank account
The final step is opening a bank account for the legal entity in Brazil, but it is not less complex when compared to the previous ones. The complete bank account opening process may take a few days or up to three months for its completion.
And indeed, the aspects that usually dictate the process speed are the financial condition of the shareholders and relationship with the bank.
In addition, see below the key documents to be presented when opening a bank account for legal entity:
- Shareholders’ documents
- Taxpayer ID
- Articles of association
To speed the consolidation of businesses in Brazil, look for guidance from an accounting firm!
To open a company in Brazil, it is crucial that the professionals in charge of that hold fiscal, tax and labor law knowledge. Otherwise, several mistakes can be made, complicating the situation of business owners in Brazil.
As the country has many regulations and great bureaucracy, the ideal condition is that entrepreneurs are supported by a specialized accounting firm. Europartner surely is your ideal partner in this mission to start your operations in Brazil.
Above all, this is true because we have a team of skilled accountants, attentive to changes of laws and regulations in the country. Therefore, if you are planning to open a company in Brazil, talk with the team of experts of Europartner!Author's post: Europartner Accounting