By Joe Naab
September 19, 2012
The Brazil Business Investor Permanent Visa is one of the best and most available permanent visas for those who have the money to invest, right now R$150,000. This is also a great visa for those who don‘t actually need to open a serious business, but rather need a vehicle to get permission to live here. As an example, I came here mostly to avoid work for several years, to relax, and to recover from having worked too much. I wanted to buy a house and I wanted to get my money out of the U.S. banking system. This was in 2003.
The investment requirement was much higher at the time. What I did was to create a business that invests in real estate (but not a realtor, an investor). My business bought my house. I lived in it and made it my office. I spent money on home improvements. I later sold it for a nice profit. At no time was my business ever audited, at no time did I have employees, and the renewal process was a breeze.
Myth #1: You Have to Have Employees to Get the Visa
Though there is some truth to this, it is technically not true. To understand this, we must first understand a very important distinction.
The Difference Between A Business Plan and an Actual Business
Most people who get Brazil’s Business Investor Permanent Visa do so by creating a new business from scratch, so we‘ll focus on this.
In most cases, when you are applying for the investor permanent visa, your business is not yet open and functional. For most people, they only want to open and invest in the business if they get a permanent visa that allows them to live in Brazil all year. This makes sense, right? So, when you are applying for the permanent visa, there is no requirement to already have employees because it is assumed that you haven‘t yet opened your business. What is required of you is a short and simple business plan, and this business plan will make mention of the employees you plan to have in the future.
I know this may sound obvious, but it’s a critical distinction to make and one of the great myths associated with this visa. You can be as creative and optimistic as you want in your business plan and your business, once running, is under no obligation whatsoever to execute the business plan in it’s exact form. It’s a plan, right? Things can change. There is almost no chance that your business will even be audited during the three year probation” period of the first issue of the visa. If it is audited, and you are making a sincere effort to run the business, you don‘t have to have even a single employee (yet). You simply explain why you don‘t have one yet, that you expect to grow and that you will add one soon.
Granted, it would help if you have at least one employee at some point. One way to keep the cost of this low is to hire a housekeeper or maybe an executive assistant on a minimum wage salary, about R$450 per month plus 31% social security taxes, called INSS. No one will work for you 40 hours per week at this salary, but they don‘t have to. They might give you 15-20 hours per week for this and you can have them do useful things for you and as long as they are a registered worker for your business this counts as having an employee for the purpose of maintaining your visa.
Myth #2: You Have to Start Conducting Business Right Away
Why the hurry? Sure, if you need to start making money right away then get started. Many foreigners who get this visa really don‘t need the money, it’s just that this is the only visa available to them to get permission to stay year after year. They may have their own money in savings or an online job of some kind. If this is the case, you can wait a year or two after the visa is issued to start your business. It will be open, legally, and maybe you are “working out of your home” in the beginning, but in terms of renting an office space to open a caf, or small language school, or Pilates Studio, or whatever it may be, you can take your time and simply say that you are having a difficult time finding the ideal space to lease. In the meantime, the R$150,000 you have sitting in your business bank account is earning you about R$900 per month after taxes in simple bank interest.
Myth #3: You Can Use the Money You Invested for Personal Expenses
No. Definitely not, and this could get you into trouble. You can not take out capital and add back capital freely as you can do with an LLC or Corporation in the U.S. If you take money out it can only be by paying yourself a taxable wage. If it’s low enough you won‘t pay income taxes, but 100% of it will be subject to the 31% social security tax, called INSS. If you do this steadily for 15 years you will qualify to receive social security payments when you reach retirement age.
Further, you can‘t simply gather receipts from things you spend money on that you can creatively call a “business expense”. And, even if it is a legitimate business expense, you still have to get a receipt in the name of your business, with your business‘ tax ID number, and in a form that makes the expense deductible for your business. This means that the issuing party provide their business tax ID number on the receipt, the date, and their signature. Otherwise, you cannot deduct these types of expenses.
Myth #4: The Ministry of Labor will Review my Permanent Visa Application with a Great Deal of Scrutiny
No, not true, or partially true only to one extent, – they demand that the application process be complete and application forms filled out correctly. What I mean is that they care nothing at all about the type of business you plan to create, whether or not it’s “good for Brazil”, etc. Though you may read this on an official site somewhere, it’s not legally true.
Let me give you some background. I flew up to the Ministry of Labor in Braslia and interviewed, at length, the National Director of Immigration and her three person staff who have the responsibility of reviewing and approving these visas. Without exception, they each made it very clear that they are under legal obligation to approve every single business investor permanent visa application that is submitted property. They can make no subjective judgment whatsoever (nor do they care to!).
Think of the trouble and expense you‘ve gone through to have reached the point of application for the visa. You‘ve already created a business in Brazil, opened a bank account for the business, and wired in at least R$150,000 of your own money. They aren‘t going to say, “well, we don‘t think Brazil needs another English teacher”. Nor can they legally do this.
It’s very simple. Open and fund the business property, send in a complete, error-free application, and your visa will be approved within 30 days, by law.
Myth #5: I Need an Attorney to Get the Business Investor Permanent Visa
You in no way need an attorney to get this visa. You can use one, certainly. All of them are happy for the business and if you don‘t want to do any of this yourself, and you are a keen negotiator and know how much to pay for this service, then go for it. 99% of them will never have done this before, though they will claim that they know it all. To do the entire process for you, from beginning to end, you will receive quotes of R$10,000 to R$20,000. Or, you might get a quote for R$5,000 in the beginning and then find that this was only to take you to a certain point, and not to the end.
Be very careful engaging Brazilian Attorneys in Brazil. The best and most ethical ones, who hopefully came to your through a strong referral, plan to earn about R$250 per hour when they make a bid to help you. Some won‘t provide a fixed bid, they‘ll charge by the hour and you are in grave danger of sticker shock at the end of the process.
If you choose to pay someone to do it all for you, a reasonable price might be R$5,000 to R$7,000, and expect to pay about R$1500 in other costs. If you do it entirely alone, expect to pay only the R$1500 in other costs. You can employ someone like me, who won‘t do the work for you, but will provide you a detailed checklist, will coach you through through the process, occasionally make phone calls for you in Portuguese, for about R$4,000, give or take a bit depending on complexity. And, by the way, I do this process much faster and more efficiently than any attorney. Without exception, the people I‘ve helped through this visa all started with attorneys and the process was done completely wrong at great expense and I came in to clean it up.
Bonus Myth #6: I am Required to Have a Brazilian Business Partner
You are not required to have a Brazilian business partner. This type of business does require two owners and an Administrator who is not an owner, but can be one of the owners. The only thing required here is that the Administrator, not either of the owners, be either a Brazilian or a Foreigner with a permanent visa. This is required because until you have your permanent visa, you are not allowed to sign legal documents on behalf of your business.
Be careful who you choose. The administrator is the only person who can manage the business bank account, and you‘ve just wired R$150,000 into it! Once you have your permanent visa the first thing you can do is have the articles of incorporation (called “Contrato Social”) amended to make you the Administrator and to remove the original person. Then, make sure to pass this information on to the bank.
I hope this helps clarify and dispel some of the more common myths surrounding Brazil’s Business Investor Permanent Visa. Good luck to you!
DISCLOSURE: All information herein given is merely for elucidative purposes. It reflects current legislation, which can be modified in the future. In case of questions regarding a particular case/issue, always consult with your own attorney.
Joe Naab is the author of Brazil for Life!, a how-to living guide for those who want to start a new life or have a second home in Brazil. He is presently working on a near-coastal, countryside real estate subdivision project outside the city of Florianpolis, Santa Catarina. He can be found at http://brazilforlife.com and reached by email at email@example.com. His Youtube channel is called BrazilforLifeTV.
Previous articles by Joe:
Forro – Getting Started with Brazilian Partner Dancing
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Add Thousands of Brazilian Portuguese Words to Your Vocabulary Right Now
How to Work and Support Yourself in Brazil