Brazil Company Registration

Brazil is divided geographically into five different regions: North, Northeast, Southeast, South and Midwest. The southeast is the most prosperous and the most industrialized region, where most of the large cities are located. Due to its natural characteristics, the Northeast is relatively underdeveloped. In addition, because the South and Southeast have a strong industrial and processing base, it is easier to attract business and trade, leaving the Northeast short of investment. This situation is expected to change as the South and Southeast continue to saturate. Investment in tourism in the Northeast is growing steadily.

As a former Portuguese colony, the official language of Brazil is Portuguese, which is spoken by 97% of the population, while 2% of the population speaks Indian and 1% speaks other languages. Brazil is a federal republic, and the 1988 Federal Constitution provides for three separate branches of government: the Executive, the Legislature, and the Ministry of Justice. The Brazilian legal system is based on a codified legal system, and the Federal Constitution establishes the legal system, the fundamental rights of citizens, the political and administrative institutions of Brazil, defines the roles of these ministries, and establishes laws and economic policies related to taxation, social and economic matters, civil and commercial law, labor law, and criminal law.

Many enterprises need to start business in Brazil to facilitate business dealings and need to register Brazilian companies. Brazilian company registration can be authorized to appoint a registered agent to handle related matters, which does not require much time and effort from the investor except for the preparation of relevant information. After the registration of a Brazilian company, it is necessary to make arrangements for tax filing, to hire or entrust an agent to do bookkeeping, and to file tax returns on time according to the requirements of the Brazilian tax authorities.

Advantages of establishing a company in Brazil

▶ Development Opportunity

1. Brazil’s high value-added consumer market is a strong attraction for multinational companies. Brazil is the sixth largest economy in the world and ranks among the top 10 fastest growing economies in the world. Since 2006, Brazil’s economy has grown at a rate of 6%, which has allowed it to maintain its position as the largest economy in Latin America.

Brazil has the largest renewable energy program in the world, with 25% of the world’s ethanol production, and a growing number of biomass and wind power plants in the country. Brazil now produces 70% of the total wind energy in Latin America.

3. In Brazil, up to 60% of the workforce is computer literate. However, this percentage varies from region to region, and depends greatly on the region in which you intend to operate.

▶ Tax Benefits

There are five free trade zones in Brazil: Manaus, Satana, Tabatinga, Boa Vista and Guayaramirin, which offer tax exemptions and more lenient trade laws to foreign companies.

2. Brazil is a member of the Southern Common Market (MERCOSUR). Therefore, in trade cooperation with members of this common market, such as with Argentina, Uruguay, Bolivia and Venezuela, Brazil can enjoy tariff exemptions, reduced restrictions and increased government business protection.

3. Foreign investors can purchase shares directly on the BM&FBOVESPA, Brazil’s main stock exchange, without paying local capital gains tax.

4. Brazil has signed international double taxation agreements with 28 countries or territories, so the withholding tax required for limited liability companies incorporated in Brazil has been significantly reduced.

5. Companies and individuals who are not residents of Brazil are not required to pay withholding tax to the Brazilian government on the dividends they receive.

6. Non-residents and companies are not subject to withholding tax on interest income received from Brazilian registered companies.

7. It is very easy to withdraw from Brazil if the client’s earnings in Brazil are not as good as expected. In fact, there are no capital controls in Brazil. All withdrawals are free of capital gains tax and withholding tax if the company’s initial capital is authorized and recognized by the Central Bank of Brazil at the time of incorporation.

1、Limited liability company

A limited liability company is a private limited company that is considered by the Brazilian authorities to be a separate legal entity. The owner of the business is not personally liable for the debts and liabilities of the company. A limited liability company is usually the common choice for foreign investors to complete the incorporation process in Brazil, as the liability is limited to the share capital.

(1) At least 2 shareholders of any nationality with full foreign ownership of the Company’s share capital. Each shareholder must be represented by a proxy commonly known as a representative.

(2) At least one local resident director is required.

3) A resident manager is needed in Brazil. If needed, we can provide this service and will find a trustworthy local manager on your behalf.

4) Although there is no paid-up equity requirement, we strongly recommend that a minimum of $20,000 be set aside to fund future basic operations and business activities.

(5) The company must have a local registered address or lease agreement prior to business registration.

2、Branching organizations

A branch office is a viable option for international companies when they wish to expand their business in Brazil. International business owners can expand their parent company by establishing a branch office in Brazil. The purpose of a branch office is to facilitate operations and generate revenue in Brazil on behalf of the foreign parent entity.

1) A resident manager in Brazil is needed.

(2) There is no minimum number of directors as the branch is considered part of the overseas headquarters.

3、Representative Office (RO)

Foreign investors interested in learning more about doing business in Brazil and exploring investment opportunities may choose to establish a representative office (RO) in the jurisdiction. The RO can help foreign investors fully assess the feasibility of doing business in Brazil before making a final decision to establish a company there. As such, the RO can only perform limited non-commercial activities for its parent company, such as market research and marketing. Foreign investors interested in promoting the company’s image in Brazil are encouraged to set up an RO.

1) A resident manager in Brazil is needed.

Before a company can be formed, it is necessary to choose the correct type of company. In general, the most common type of company in Brazil is the Limited Liability Company, also known in Brazil as Sociedade Limitada (LTDA).

Step 2: Keep your company name

We will search and reserve your company name at the Junta Comerciais (Trade Commission) in Brazil.

Step 3: Preparation and submission of related files

If your company has foreign directors or shareholders, you will need to prepare the necessary documents for foreigner incorporation. This includes notarized copies of passports and proof of address of individual directors and shareholders.

1) Novotel Business Travel will assist in the preparation of company documents required for company registration, such as business plans and Contrato Social (Articles of Incorporation).

(2) If you intend to appoint a corporate shareholder, we will also require a certificate of incorporation, memorandum and articles of association, minutes of relevant board meetings, a power of attorney to appoint a corporate shareholder representative, personal information of directors and other relevant documents.

3) Once all necessary documents are prepared, we will submit them to the Trade Commission for company formation.

4) Upon successful registration of your company, you will receive a Certificate of Incorporation and a NIRE (Company Identification Number).

Step 4: Corporate Banking Account Opening

After registering your company, we will assist you in opening a corporate bank account.

1) We will assist in consolidating files and opening a corporate bank account with your preferred creditworthy bank.

2) Usually directors and shareholders do not need to travel to Brazil. If travel is required, we will send a representative to accompany you to the bank meeting. Alternatively, our team will negotiate with the bank to hold a conference call or request a waiver.

3) After successfully opening a business banking account, we will courier the online banking token and access code to your preferred address.

Step 5: Tax Registration

Upon successful registration of your company, we will file a CNPJ number with the Federal Tax Administration.

(1) NuTu will assist your company in meeting its annual accounting and tax obligations.

(2) In general, Brazilian companies pay 34% net corporate tax per year. Brazilian resident companies are taxed based on worldwide income.

Step 6: Business License Application

Depending on the department and location where your business operates, you may need to apply for a business license. If necessary, we will assist in applying for a business license from your local municipality. Once your business license has been issued, you may also need to apply for a health permit to demonstrate that your company’s health requirements have been met.