To incorporate in Brazil, start by choosing the right business structure and hiring knowledgeable liaisons.
Brazil is a lucrative market, where industrial production recorded its fastest growth in two years. That’s just one of many reasons it may be a smart move to do business in the country.
As it stands, creating a business in Brazil can be tricky. But with the right knowledge and expert help, you can incorporate to legally operate in South America’s largest economy.
What kind of entity makes sense?
There are four common entities for foreign investors who want to do business in Brazil: limited liability company, business corporation, joint venture, partnership enterprise and representative office.
Limited liability company (LLC)
This is a company entirely controlled by you. You might not be able to set up an LLC in certain industries, and you may need government approval in other industries.
It’s not quick or easy to set up an LLC. However, it’s often considered an effective entity for foreign investors because it affords complete control over business activities.
A corporations is considered a personality separate and distinct from that of its stockholders. For a public corporation, the shareholders’ liability is limited to the amount of their share in the capital. All other corporations are closed corporation.
Joint venture (JV)
In a joint venture, you partner with a Brazilian citizen to start a business entity or contractual arrangement. This is a limited liability entity.
Experts warn that a joint venture is unwieldy because partners rarely hold the same business vision. Even still, many individuals choose to enter into joint ventures because they can’t start a WFOE.
Partnership enterprise (PE)
Unlike an LLC or a JV, you don’t create a legal entity by entering into a partnership. Instead, you simply create a contract between one or more partners to conduct business.
There are other major differences. For example, a PE is an unlimited liability company, so you could be on the hook for full costs incurred through your business. PEs are also excluded from many Brazilian industries.
Creating a representative office is the easiest way to build a business entity in Brazil. It’s also an inexpensive option. However, a representative office excludes you from performing many operations in the country. For example, you can’t sign contracts or even earn money. Essentially, a representative office gives you a presence in Brazil, and not much more.
Should I hire a professional?
It’s an excellent idea to hire a liaison to navigate tricky incorporation waters. Work with someone from Brazil who speaks fluent Portuguese. They’ll interact with officials on your behalf, and they’ll tell you the appropriate places to register your business entity.
What kind of documentation will I need?
Here are a few documents you’ll need to register your business:
- Certificates of incorporation
- Bank reference letters
- Passport copies
- Resume and photo
- Description of the scope of your business
- Lease contracts of Brazilian office address
- Business license
You may need different documentation depending on where you’re registering and which officials you meet with. Strongly consider working with a company that helps foreign investors create businesses in Brazil.
Laws & Legal Docs for International Money Transfers to Brazil
Where do I file my information?
You’ll submit documentation and any amendments to the Board of Trade with jurisdiction over the place of your company’s head office. You’ll also need to register with Brazil’s Federal Taxpayers’ Registry of Legal Entities if you have shareholders. Your business may also need to be approved by other authorities.
Doing business in the Brazil: economic snapshot
Other factors to consider
- You’ll need a visa before you can register. The process takes at least 45 days and, depending on your business purpose, could require you to register foreign investment and commit to hiring 10 Brazilians within two years.
- Register your corporate name. Two companies of the same name cannot exist within the same state, so you’ll want to search and register as soon as possible.
International billing and payments
Your new business will require you to make and receive international payments, which means you’ll make transactions between currencies and across borders.
You can safely and affordably manage your business payments — with lower fees and stronger exchange rates — by comparing the services of a money transfer specialist.
Use a money transfer to manage your international business payments
It’s important to choose the right business entity to operate in Brazil. Consider working with an organization that specializes in helping foreign businesses incorporate in the country — this will streamline your progress and help you avoid pitfalls along the way.