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Frequently Asked Questions

Frequently Asked Questions

Foreign entrepreneurs who are looking to expand their business presence by setting up a company in Brazil are confronted with different legal questions. In this article, our company formation consultants in Brazil answer a few of the most frequently asked questions.

Investors who want to open a company in Brazil will not only need a business plan and investment opportunity, but they will also need to understand what are the applicable requirements that will apply in their case, as well as the steps they will need to follow in order to start a new business or expand an existing foreign company. Regardless of the chosen investment route, it is only natural for investors to be confronted with different legal questions.

1. What are the main forms of legal entities in Brazil?

The local legislation confers the legal frame for different legal entities, such as:

  • the single member limited liability company;
  • the undeclared partnership;
  • the simple company;
  • the partnership;
  • other types of legal entities.

2. How can a foreign company establish a business presence in Brazil?

Foreign companies usually choose to set up a limited liability company in this country. Our Brazil company formation advisors can assist you to open such a company in Brazil.

3. How can a company be incorporated here?

It takes several steps to set up a company in Brazil. Briefly, these are:

  • preparing the documentation in the country of origin of the company and sending it to Brazil;
  • translating the documents with a certified translator;
  • registering the documents and translation in Brazil;
  • obtaining the tax payer ID;
  • filing the Articles of Incorporation with the Commercial Registry or with the Civil Registry office;

Our company registration agents in Brazil can offer further details on what these other steps consist of.

4. How can quotas be transferred in this country?

Any transfer of the title of the quotas in Brazil necessitates an amendment in the Articles of Incorporation of the legal entity. The local legislation requires the approval of quotaholders which own minimum ¾ of the entire company capital to amend the Articles of Incorporation.

5. What is the difference between a branch and a subsidiary in Brazil?

The main rule is that a foreign company can be a partner, investor or shareholder in a local company, making the local entity a subsidiary of the foreign corporation.

To open a branch in Brazil, a more complex procedure is necessary. A foreign company that decides to open a branch in order to establish its activities in the country can rely on our assistance during the setup and registration process. Special authorizations need to be applied for and obtained from the Government in case of branches and the documentation differs according to the field in which the branch activates.

6. Are there any sectors which are prohibited for foreign companies?

Even though foreigners are able to own legal entities in Brazil, there are certain sectors which are prohibited for foreign investors, such as:

  • Radio, TV and publishing;
  • Cable television;
  • Air transports etc.

7. How long does it take to open a bank account in Brazil?

In Brazil, it takes eight weeks to open a corporate bank account which is needed to set up an LLC, a branch or a representative office.

8. Can foreign entrepreneurs employ personnel in Brazil?

Foreign entrepreneurs who own LLCs or branches in Brazil are able to hire employees in this country. However, this is not possible for the representative offices here.

9. How are legal entities able to execute deeds or contracts?

Generally, there are no set formalities for the execution of deeds or contracts by companies in Brazil. The general regulations of the Civil Code are applied.

10. Can a company be 100% owned by foreign entrepreneurs in Brazil?

Indeed, a company can be 100% owned in Brazil.

For further questions on the company formation procedures in Brazil, or for help to open a company in Brazil, please contact us.