Business in Brazil
Brazil is a country of samba, football, beautiful beaches, and a dense jungle. It belongs to the group of economic tycoons of the G20, and its economy is based on large oil deposits and the world’s largest coffee crop. Is setting up a company in Brazil a brave idea or a risk worth taking?
Establishing a company in Brazil and the available legal forms of doing business
Several types of legal forms are available in Brazil, but La Sociedade a responsabilidade limitada (LTDA), a limited liability company in Brazil, is the most frequently chosen and recommended.
The opening of a company of this type involves several stages, which in some respects resembles the procedure used for opening a company in Spain.
In Brazil, there is generally no legal requirement for minimum capital for limited liability companies. In practice, only authorised capital of USD 1 is required to establish a company in Brazil. This capital is divided into capital units, called amounts (and not shares as in Poland) and is registered. Ownership and number of amounts are defined in the statutes.
The LTDA company must have at least two members (partners) who may be natural or legal persons and may live anywhere in the world. However, in the case of non-residents, they will have to ensure adequate representation before institutions and offices in Brazil on various matters related to the establishment of the company. Such services are usually provided for a fee, by local officials. The bodies of the Brazilian limited liability company are the Management Board and the Administrative Board.
At least one of the members of the board must be appointed as director general. There is an obligation to include this in the articles of association. In addition, he must hold a permanent visa or be resident in Brazil. His tasks will primarily be to represent the interests of the board member who appointed him, while the members of the Administrative Board may be foreigners and not necessarily resident in Brazil.
Another form of conducting business activity in Brazil is Sociedade Anonima (SA) – the equivalent of a Polish joint stock company.
The SA, like LTDA, must be established before at least two entities, and if none of them is resident in Brazil, a Brazilian representative will be required. Opening a company in Brazil in the form of an SA requires that at least 10% of the founding fund is deposited in the appropriate deposit. However, this can be facilitated by the fact that this sum can take the form of monetary or non-monetary assets that can be converted into money, and such an operation is always carried out by authorised local authorities. Similarly, to analogous legal forms found in Europe, SA has bodies – General Meeting, Management Board and Supervisory Board.
Company formation in Brazil and registration time
The company registration in Brazil involves completing the relevant corporate documents and obtaining the relevant identification numbers.
The first step is to choose a name for the company, which must be unique and include the words ‘Ltda’ or ‘SA’. This name is registered and approved at state level. The verification process involves checking that the name is not like any other existing name. The verifications shall be carried out by the relevant state authorities.
The local tax identifier for foreign shareholders – CPF – is then obtained. This is the identification number of the taxpayer, which is given to a person living in Brazil as well as to residents of foreign countries by the Federal Income Office. The CPF number is necessary because without it you cannot open a bank account or create a company. It is required for all transactions except those involving the purchase of basic products. The waiting time for the number is about 7 days.
During the registration of a company in Brazil, it will be necessary to obtain a CNPJ number, which is also the identification number of the taxpayer, but is used for companies and not individuals. All companies established in Brazil must apply for a CNPJ number at the time of establishment, including foreign companies wishing to invest or hold assets in Brazil. You also must wait about 7 days for such a number.
Furthermore, any new investment that is the subject of the company’s activity must be registered in a register kept by the Central Bank in Brazil, the registration time is 5 days.
Once the necessary numbers have been obtained and the documentation has been prepared and submitted to the relevant register, the company can be registered, which usually takes 4 weeks.
Open company in Brazil at a distance
Open business in Brazil do not need a personal presence, that can be done at a distance. A company in Brazil may be registered by a local representative. However, please note that the company must have its registered office in Brazil, from which official business correspondence will come and legal documents will be kept. Such an address is entered in the commercial register, and the company will be registered before the tax authorities. For this purpose, it is possible to use virtual offices that operate on site.
Taxes in Brazil
The system of income taxes in Brazil is far different from that known in Poland. The local equivalent of the CIT or Imposto de Renda Pessoa Juridica (IRPJ) is a federal tax. Its amount depends on the amount of income that a given company achieves in Brazil – if its total annual income does not exceed 240 thousand Brazilian realities, the tax is 15 percent. If this amount is exceeded, the tax increases by an additional 10 percent. Local taxes on social security and on the State Social Investment Fund should also be included in these amounts.
As far as the personal income tax – Imposto de Renda Pessoa Fisica (IRPF) is concerned, it is 0%, 15% or 27%, depending on the income achieved. This is a separate tax category from the Imposto de Renda Retido da Fonte (IRRF), an income tax on non-residents in Brazil, which ranges from 15% to 25%.
Companies starting up in Brazil as well as existing companies must submit and report annual accounts and an annual tax return.
In Brazil, a limited liability company does not have an audit requirement unless it qualifies as a “Super Limitada”, i.e. a large company/large company.
Ready made company Brazil
Buying a company in Brazil can be an interesting alternative to the traditional procedure of registering a company in Brazil. This will allow you to bypass several procedures traditionally required. It should be borne in mind that the purchase of a company in Brazil bears the risk of its history and the need to verify commitments and all documents. Therefore, it is important to consider all aspects of such a process before taking any steps culminating in the purchase of a company in Brazil.
Gotowa spółka w Brazylii / gotowa firma w Brazylii / zakup spółki w Brazylii
Kupno spółki w Brazylii może być ciekawą alternatywą dla tradycyjnej procedury, jaką jest rejestracja firmy w Brazylii za pośrednictwem specjalistów w tym zakresie. Pozwoli to na ominięcie szeregu procedur tradycyjnie wymaganych na drodze do własnego biznesu. Należy mieć na uwadze, że zakup firmy w Brazylii obarczony jest ryzykiem dotyczącym jej historii i konieczności weryfikacji zobowiązań i wszystkich dokumentów. Dlatego zanim podjęte zostaną kroki, których zwieńczeniem będzie kupno firmy w Brazylii, istotnym jest aby rozważyć wszystkie aspekty takiego procesu.