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Shelf Company in Brazil

Shelf Company in Brazil

When interested in implementing the activities on the market in Brazil, an investor can register a company or buy a ready-made company, also known as a shelf company. This entity presents credibility in front of financial authorities and business partners. No matter your decision, whether you want to set up a company in Brazil or purchase a ready-made one, our company formation agents in Brazil can help you with the requirements in this matter.

The advantages of a shelf company in Brazil

Shelf companies in Brazil are subject to immediate financial transactions because they have opened bank accounts and can be used as soon as an entrepreneur has signed the contract and received the ownership. Ready-made companies in Brazil have no registered trading activities and therefore they have no business debts or liabilities. In this matter, the future owner will receive a certificate which will provide the business history of the company and the fact that there has been no amount overdue involved. Once a shelf company in Brazil has been purchased, the owner can start his/her activities and also sign contracts with several providers. 

In summary, the following can be considered important advantages of the shelf company:

  1. Longevity: the shelf company has been incorporated for a number of months or years at the date of purchase; usually, the older the company is, the higher the price will be;
  2. Confidence: clients may feel more comfortable doing business in Brazil with a company that has been established for quite some time;
  3. Saved time: when buying a company, as opposed to registering it, investors skip a number of steps that include drafting and registering the constitutive documents, along with performing the name checks and the entire procedure related to registering the legal entity;
  4. Suitable in all fields: a shelf company can be used by those who wish to set up a business in the services industry, just as well as those who wish to start an import or manufacturing business; this level of versatility does however mean that any additional permits and licenses will be applied for by the new owner of the company.

These are just some of the reasons why investors choose to buy an existing company rather than incorporate one themselves. As previously mentioned, business loans can be accessed easier when the company has longevity and no outstanding debts.

Apart from the ready-made companies, we remind that any businessman who has decided on activities in Brazil can solicit guidance and details about the company incorporation process in Brazil from our team of consultants who can help in drafting the documents and offer related services.

What to consider when purchasing a shelf company in Brazil

Shelf companies are aged firms ready to be used, once the activity field has been chosen by the future owner. Such entities are immediately available once the proprietor decided on a board of directors and a name for the firm. With a clean background, as there have been no business transactions in the past, ready-made companies in Brazil are preferred entities by numerous investors who want a fast start without having to wait for the incorporation process. Furthermore, if bank credit is taken into consideration, a shelf company has more credibility compared to the ones newly established.

Before concluding the purchase of a shelf company in Brazil, investors are advised to perform due diligence. This is a formal verification performed in addition to the data provided by the company seller. While most companies sold as shelf corporations are indeed left to age with no commercial transactions and no prior liabilities, it is always recommended to verify this. Our team specializing in company incorporation in Brazil can assist you if you have already selected the company you wish to purchase.

Shelf company FAQ

Investors usually have many questions before deciding to purchase a ready-made company. Caution is recommended, however, part of the concerns that may appear are unfounded. With the right assistance during verification and purchase, available under the services provided by our team of company formation experts in Brazil, you will be able to safely buy an existing company and start trading as soon as possible.

Are shelf companies illegal?

No, shelf companies are not illegal. You will simply be purchasing a legal entity that has been lawfully incorporated in Brazil, registered with the Commercial Registry, and has a company registration number assigned to it. It is advisable to verify the company in order to make sure that the package you are purchasing is sold at its true value. The price can differ according to the longevity of the company and verifying the true registration date with the Register will help you make sure that the age of the company is the one that has been indicated. Our team can help you verify the public information available for the chosen legal entity.

What will I receive after I purchase the company?

A formal ownership transfer is performed. This means that the company’s Articles of Association are changed to reflect the name of the new owner (or owners). Moreover, the changes to the ownership structure will also be reflected. You will receive the company’s constitutive documents in the original copy.

Are you able to change the company details?

Yes. You can make the desired changes at any time, with the mention that any change to the company’s particulars is registered with the Brazilian authorities within a prescribed time limit. For example, if you wish to do so, you can change the company name, however, you will need to verify if the chosen name is available for use. Shelf companies are typically assigned generic names or ones that are available, and investors may wish to change the name to reflect the company’s identity. However, the registered name (the one included in the formal documents as well as the one that is mentioned in formal communications and on invoices, the one that appears when searching for the company’s particulars in the Register) can be different from the brand name. 

How are shelf companies taxed in Brazil?

Shelf companies are resident companies in Brazil and are subject to the full spectrum of taxation. The main taxes applicable to limited liability companies and joint-stock companies are the following:

  • 15% corporate income tax rate, effectively 34% including surtax;
  • 0%: withholding tax in dividends; this tax does not apply on dividend distributions to a resident company, nor when these distributions are made to a nonresident and they are paid out of retained IFRS profits;
  • 15%: the general withholding tax on interest, royalties, technical services fees;
  • 1.5%: withholding tax applicable in case of some domestic professional service payments.

Other taxes apply and our team can give you more details.

In addition to the information above, we remind that our team of company formation representatives in Brazil may answer all your questions related to the shelf companies in Brazil. Please feel free to contact us for further details or a personalized offer.

For investors who wish to open a company in Brazil, our team offers ongoing assistance, from the first stages, as early as the pre-incorporation phase (focusing on choosing a suitable business form), during the registration of the business (for newly incorporated legal entities), and after the company is registered (with the applications for various permits and licenses, as needed).

Our team also assists investors who wish to open a branch in Brazil. This is one of the ways in which a foreign company can establish its presence on the market, however, parent companies abroad should be well aware that special authorizations for functioning are required. Our team can give you detailed information, depending on the industry in which the branch will activate.