Discover the different business structures and how to get your venture started in Brazil
Any foreign individual or company is entitled to open a business in Brazil. Generally speaking, foreign entities can engage in any commercial activity, as long as it’s legal and compliant. That said, foreigners may come across certain restrictions in specific business areas (for example, publishing), or if the company intends to operate within geographical areas considered sensitive to national security (for example, near international borders).
Some factors to be aware of:
- It takes at least 30 days to set up a company in Brazil
- The services of a Brazilian lawyer are legally required to set up a Brazilian company
- There is a difference between establishing a Brazilian company and being named as its director or administrator. To be appointed as a director or administrator, a foreigner must obtain a permanent resident visa for Brazil
A foreigner does not require a Brazilian visa to become a shareholder in a Brazilian company. If they intend to appoint a Brazilian resident as manager of the company and only visit Brazil occasionally to oversee their investment, they can do so on a tourist or limited business visa. However, if a foreigner intends to relocate to Brazil and personally run the company, then a permanent visa is required. In order to apply for a permanent visa, foreigners need to provide evidence that they have invested at least R$150,000 in their Brazilian company.
Types of Companies
In Brazil there are two basic types of Limited Liability Company:
- Sociedade Limitada(LTDA): This is the most common type of company in Brazil. It is also the simplest, most flexible and cost effective structure to operate. LTDAs are bound by a Contrato Social(Social Contract) and the company’s capital is divided into quotas (shares). There is no minimum capital requirement and the company should be managed by at least one resident administrator, appointed by the shareholders. To maintain majority control of the company, any one shareholder must hold 75% of its shares.
- Sociedade Anônima(SA): This type of company is not as flexible as a LTDA. They are considerably more expensive to operate and demand greater transparency, since all significant corporate information, including its annual financial statements, must be made public, details of which may be published in the press. It is governed byEstatutos (common statutes) and its capital is divided into various classes of shares. A Management Board and Fiscal Council, each of which requires two or more appointed Brazilian residents, are required to manage a SA. If a SA is listed on the stock exchange, or has authorized capital, it must also have a Board of Directors, composed of shareholders.
LTDAs and SAs are subject to the same taxation laws in Brazil.
The Brazilian Chamber of Commerce in Great Britain can provide comprehensive information about doing business in Brazil. www.brazilianchamber.org.uk