Opening a company in Brazil as a foreign entrepreneur may require several important terms and conditions. In this matter, our specialists in company formation in Brazil can help with comprehensive guidance regarding the documents to be prepared when registering the firm.
|Types of companies||
The main business forms are the Limited Liability Company, the Joint-Stock Company, the Individual Company with Limited Liability
|Minimum share capital for LTD Company (if applicable) and Paid-In Requirement||No minimum capital is required|
Minimum number of shareholders
|Time frame for the incorporation (approx.)||
30 business days
|Corporate tax rate||15% (34% including surtax)|
|Dividend tax rate||
No withholding tax on dividends
The VAT has a rate between 4% and 25%; other indirect taxes on goods and services apply in Brazil
|Number of Double Taxation Treaties (approx. )||35|
|Do you supply a Registered Address? (Yes/No)||Yes|
|Local Director Required||Resident director|
|Annual Meeting Required||Yes|
|Electronic Signature||Legally recognized|
|Is Accounting/Annual Return Required?||Companies prepare and submit annual financial statements and file the annual income tax return for the previous tax year|
|Foreign-Ownership Allowed||Foreign shareholders are permitted to open a company in Brazil|
|Any Tax Exemptions Available? (Offshore Income, Dividend Income etc.)||Total or partial exemption from duty or excise tax in some cases, partial income tax exemption for certain types of companies|
|Any Tax incentives (if applicable)||R&D projects, reduced federal excise tax in some cases, certain incentives in the export sectors, regional incentives for the federal and state taxes, subject to conditions|
Our team assists individuals and corporations interested in doing business in Brazil. At the core of our services are those that include complete assistance for setting up a limited liability company in Brazil. We offer guidance for choosing the right business form, as well as ongoing assistance throughout the company registration process.
Foreign companies that open a branch in Brazil also benefit from our expertise. Special permission is required for branches of foreign companies that operate in Brazil, and our team can guide foreign corporations throughout the process of governmental authorization.
Assistance for company formation in Brazil
When drafting the documents for your company in Brazil, whether it is an LLC, branch, or corporation, you are invited to ask for practical help in this matter from our agents in company incorporation in Brazil, who can guide you during the entire registration process, also considering the fees which need to be paid.
We mention that a legal representative in Brazil can set up your business if you are a foreign entrepreneur who wants to implement the activities on the market, without having to be present in Brazil throughout the entire registration process.
Our solutions for company formation in Brazil include the following:
- Assistance for choosing the suitable business form, depending on the number of investors as well as other criteria;
- Checking the company name availability and reserving the chosen company name;
- Drafting or checking the prepared company incorporation documents; preparing customized incorporation documents upon request;
- Preparing the documents for registration, making the necessary submission with the authorities and obtaining the national company registration number;
- Handling the subsequent tax registration with the federal tax authorities as well as the state inscription which is mandatory for companies operating in selected business fields for the purpose of obtaining the ICMS, the equivalent of the value added tax registration;
- Assistance for registration with the social security institute, within the prescribed time after commencing the business activities.
Having the dedicated support of a local team of experts streamlines the company formation process. The foreign investor can continue to focus primarily on the market strategy for the new company or branch while receiving updates and assistance as needed from our local experts.
The first step in order to open a company in Brazil is to choose the most suitable business form. Below, our company formation agents summarize the characteristics of the primary business types.
Types of companies in Brazil
Local and foreign investors can choose between several types of companies. You can find a shortlist below:
- Limited liability company: this is the preferred business form as investors are separate from the legal entity and the company has simple rules for governance;
- Corporation: this is the public corporation, a business form suited for large corporations where the issues shares can have different classes and can be publicly traded;
- Branches and subsidiaries: these are the two forms under which foreign companies can enter the market; foreign companies that open a branch in Brazil will have a mere extension of the parent foreign company while the subsidiary is a locally registered company;
- Individual company: this is the sole trader, a business form incorporated by a single individual, suitable for certain types of activities.
Each business form has its own particularities and advantages.
If you are interested in company formation in Brazil, our team can help answer your questions before you incorporate one of the available business forms.
You can read more about the main types below.
LLCs in Brazil (sociedades limitadas) have the following characteristics:
- are governed by the Civil Code;
- have simpler governance and disclosure rules, compared to corporations;
- require two quotaholders (in some cases, they can be established by only one quoteholder, however, we advise investors to reach out to our team for more information on this option);
- they are established through their Articles of Association, which do not need to stipulate a minimum capital;
- the capital can be increased subsequently by means of a special resolution;
- large LLC (as defined by law according to their total assets), are subject to more complex requirements concerning accounting and auditing;
- the LLC has options to provide for the entry of third parties as quotaholders, as well as for the manner in which the profits are distributed to the quotaholders;
- the LLC cannot access capital markets and cannot issue securities.
Corporations in Brazil (sociedades anônimas, S.A.) are characterized by the following:
- they are governed by the Corporation Law and some provisions from the Civil Code;
- they can be publicly held or closed entities;
- they can be listed, therefore, they are also subject to the regulations set forth by the Securities and Exchange Commission;
- the regulations applicable to corporations are more specific, particularly to publicly-held ones, and these types of legal entities are generally perceived as being subject to more complex requirements, compared to the LLC;
- in general, the corporation needs to have two shareholders;
- its capital is divided into shares, with or without par value;
- the corporation has an Executive Board and can have a Board of Directors, according to the bylaws of the company;
- these companies must hold an annual shareholder’s meeting;
- it is subject to different requirements concerning the publication of its financial statements, compared to the LLC.
Our team can give you more details on publicly held corporations and closed corporations.
Branches and representative offices in Brazil
Foreign investors in Brazil can register branches or representative offices in Brazil, with suitable help from our consultants who are experienced in company formation in Brazil. In this matter, authorization from the government of Brazil must be obtained once you start drafting the documents for your branch, considering the local rules and regulations.
According to law, namely Law No. 8.934 of November 18th, 1994, the process of opening a branch or a facility in Brazil belonging to a foreign company is subject to the inspection and authorization of the Department of Registration or Business and Integration. This means that a foreign entity that wishes to do business in Brazil needs to obtain permission to do so.
Any alterations in the foreign company’s bylaws are also subject to prior approval from the Ministry of Industry, Foreign Trade, and Services. A foreign company commences the approval for the operation, the change, or the cancellation of its business by submitting an application to the Special Secretary of Micro and Small Enterprise of the Ministry of Industry, Foreign Trade, and Services.
The documents needed for branch approval, branch modifications, or branch activity cessation in Brazil differ according to the purpose of the application. The general conditions for document submission make it mandatory to provide the documents both in the original and in one copy each, with the former being returned to the company upon the completion of the process.
All documents are to be translated by a public official translator. Our team can assist you with the preparation of the documents.
Before deciding to open a branch in Brazil, the foreign company should understand the differences between a branch and a representative office. The first one is allowed to make direct sales and money transactions, while the representative office is registered only for marketing purposes and for business clients’ research in Brazil.
Working with a local team of experts, such as our own, is advisable for those foreign companies that wish to open a branch in Brazil, given the special process that involves obtaining the needed branch authorizations.
The company formation process in Brazil
Company formation in Brazil is a multi-step process during which the legal registration of the new business entity is ensured.
All investors follow the same steps for registration with the National Companies Registry Office and several documents are mandatory for this purpose.
Our team lists the main documents in order to open a company in Brazil:
- articles of association;
- copies of the owners’ IDs and passports;
- details about the name and the address of the future company you want to register;
- bank statements to provide the minimum share capital;
- notarized rental contract if any;
- VAT certificate.
These essential documents are not produced at the same time. The first to be prepared are the articles of incorporation. These need to include all of the relevant information about the new legal entity and it is advisable to draw them up with the help of our team.
The incorporation documents, along with the filled-in incorporation form and the proof of registration fee payment, along with the founder’s identification documents are submitted for registration.
The National Company Registration Number assigned after proper registration is also the one with which the company will be identified as a taxpayer by the federal government.
Complete services for investors in Brazil
Our team offers a comprehensive range of services related to company formation in Brazil. We assist investors throughout all of the incorporation steps, however, our team is also able to assist with additional solutions, for companies that have just been registered.
Applying for special permits and licenses is one of the most important steps that follow after registering the chosen business form. We are able to provide assistance and even represent our clients who wish to handle this step.
Examples of regulated activities in Brazil include the following: financial services, telecommunications services, educational and medical services to list a few. For example, certain financial services providers are subject to the regulation and control of the Securities and Exchange Commission of Brazil.
In addition to our services related to compliant corporate activities, we also provide assistance for tax matters, as well as for businesses that have already been incorporated. Companies in Brazil are required to pay the following taxes:
- 15% corporate income tax, amounting to 34% including the surtax;
- State VAT or ICMS with rates between 4% and 25%;
- The federal excise tax, with a rate of 20%;
- Municipal tax, or ISS, with rates between 2% and 5%;
- Social security contributions of 8% of the wages deferred salary to the severance fund and 20% of the wage to the public pensions system;
Brazil is the 5th largest country in the world, by territory and population, with important exits to the Atlantic Ocean and borders with countries from South America. These are only a few of the attributes which are considered important by many foreign investors interested in establishing their activities in Brazil.
With a solid and respected history, significant inheritance, and under continuous development, Brazil aligns with the powerful countries worldwide with stable and reliable economies.
Our team is ready to answer any questions concerning corporate taxation as well as annual reporting and accounting.
With our help, company owners can easily change the company particulars and register them as needed with the authorities. For businesses that can benefit from this service, we also provide virtual office solutions.
For comprehensive information about opening a company in Brazil and the related services in this matter, we invite you to contact our company formation agents in Brazil.