By Pedro Souza
August 29th, 2016
Brazil is known as a hard place to operate a company. That being said, it is still a country ripe with opportunity, despite the ongoing crisis. In order to help you with setting up your own business here, we have written this simple guide.
Both foreigners and locals are allowed to open a business here, but foreigners might be subjected to a few restrictions. These restrictions are present in some areas such as publishing, or when the company operates near the country’s borders. A foreigner is also allowed to incorporate a company in Brazil, though a permanent visa is necessary in order to be appointed the company’s administrator or director.
In Brazil, there are two types of limited liability companies, the “Limitada” (limited) and the “Sociedade Anônima” (Anonymous Society). The most common of these two is the Limitada, which is simpler and cheaper than the Sociedade Anônima. There are no minimum capital requirements for opening a Limitada, which is managed by one or more administrators appointed by the shareholders. This type of company is based on Articles of Association known in Brazil as “Contrato Social” (social contract).
The Sociedade Anônima in contrast, is more expensive to operate, and its corporate acts and financial statements need to be published in newspapers. The management of the company is divided into a management Board and a fiscal council, both of which need to have at least two Brazilian residents. It also needs to have a board of directors composed of shareholders if it is listed on the stock exchange or if it has authorized capital. The capital of the Sociedade Anônima can be divided into different classes, and the company is governed by By-Laws known in Brazil as “estatutos”.
During the incorporation process, Brazilian law requires a lawyer to be present. The lawyer needs to be provided with a Power of Attorney in order to carry out the process. If the investor is a foreign company, it needs to provide a copy of its Certificate of Incorporation. Once you have the Power of Attorney and the Certificate of incorporation, they need to be consularized at the Brazilian Consulate or embassy in the investor’s country. Once this is done, the documents have to be translate to Brazilian Portuguese by an official translator.
Now that you have the necessary documents, you should give them to the lawyer that will handle the incorporation. After that, you need to decide certain matters such as the name of the company, the identity of the shareholders and the company’s capital in accordance with Brazilian law. This should be done with the help of Brazilian lawyers. Once these matters are decided, the next step is to finalize the text of the Articles of Association or By-Laws with a lawyer.
When this is done, the company has to be registered with the state Commercial registry or Registry for Corporate Entities. Finally, you have to obtain a Brazilian Federal Tax Number, which is called a CNPJ locally. A lawyer can handle both of these processes. Once you have your CNPJ, your business if finally ready to operate! Now that you are ready, I wish you success in your endeavor.