International companies in Brazil

Do you have questions about opening an international company in Brazil and want to know if it’s worth hiring a lawyer to help you? See this article.

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Author: Bianca Noronha

Opening an international company in Brazil is undoubtedly a very important step for those who want to expand their business.

If you are having trouble choosing the best type of company for your case, the subsidiary company can be a great choice!

At first sight, it may seem like an unfeasible procedure because it seems to be easier to start a company from scratch in Brazil, however, opening a branch can be much more beneficial depending on the case.

The possibility of:

• Moving capital between Brazil and abroad in an easier way;
• Have administrative autonomy and greater freedom of action to carry out the company’s activities, without neglecting subordination – even if on a smaller scale;
• Ease of carrying out some procedures, like as transferring resources and goods;
• Have the quality of being a commercial representation of the main company;

There are some advantages that should be observed.

Therefore, if you are interested in opening a branch of an international company and don’t know where to start, continue reading this article.

How to open a subsidiary company in Brazil?

Initially, you should know that opening a branch in Brazil is not that complicated.

The opening procedure has become much more practical and easier even for people who are not present in Brazilian territory.

Not needing to come to Brazil or having a Brazilian partner to open the branch are some of the advantages of this procedure.

In addition, part of the documents can be obtained via the Internet, such as registration with the Federal Revenue Service to obtain the CPF and registration with the Central Bank of Brazil (BACEN).

Therefore, see in the next topics what you need to have to open a branch.

Need to have an address

 First, know that to open a branch in Brazil you need to have an address.

After choosing the best city to open the branch (such as São Paulo, Florianópolis, Recife, Fortaleza, Natal, Brasília, Rio de Janeiro, Porto Alegre, and Belo Horizonte), you must choose the location of the commercial establishment.

In this case, it’s important to analyze which activities will be carried out by the branch in order to choose the appropriate location for the company.

If the activities involve face-to-face assistance or the production of products and merchandise, it’s recommended that a feasibility study be carried out to verify whether the chosen location is in accordance with the municipality’s master plan.

And, if the activity carried out does not require a physical space, you can opt for virtual offices to reduce costs.

Finally, regardless of the format of the office, whether physical or digital, the ideal thing is that this matter be treated with some care, as it’s one of the feasibility criteria for opening a company.

Need to appoint a representative with tax residency

 If you are a non-resident and intend to open a subsidiary in Brazil, you will need to appoint a representative with tax residency (attorney) to represent the company in Brazilian territory.

As a representative of the company, the representative will act as a director or administrator of the company, being responsible for signing and supervising all acts during the opening process.

In addition, he is also jointly and severally liable for the company’s debts, making it an onerous function, since, to get around this situation, they require the company to take out civil liability insurance.

Therefore, this person must be someone professional and trustworthy, both to avoid unnecessary lengthening of the opening process and the responsibility of being a company representative.

Need to register with the competent authorities

As soon as you name the representative and choose the address of the branch, you must register the bylaws and other documents.

In summary, in the first phase, authorization must be requested from the Federal Government by the National Department of Business Registration and Integration (DREI) for the branch to operate in Brazilian territory.

Subsequently, the authorization and bylaws must be registered with the competent Board of Trade.

Finally, the bylaws must be registered with the City Hall and, if necessary for the company’s activity, the branch must obtain state registration.

In all, this process can be completed within 60 to 90 days if there are no requirements.

What is the difference between opening a company for foreigners and a company for Brazilians?

 The procedure for both cases is similar, however, what differentiates them are the limitations imposed by the legislation and the step-by-step procedure for carrying out the opening.

A Brazilian will be able to open a company in an easy way, just gather the necessary documentation and go to the Board of Trade, Federal Revenue, and City Hall.

Non-resident foreigners, in addition to those already mentioned, must appoint an attorney with tax residence, register with the RFB to obtain the CPF, and, finally, must register with BACEN in order to carry out the Electronic Declaratory Registration (RDE).

In addition, there are activities that foreigners cannot develop without the presence of a Brazilian in the business society, namely:

• Foreign Capital Companies in the Health Care Segment;
• Cabotage and Navigation Company;
• Journalistic, Sound and Image Broadcasting Company;
• Cable TV company;
• Cargo Road Transport Company;
• Mining Company;

For these reasons, the need for an experienced professional to analyze your case and verify compliance with the law is indisputable, in order to provide legal security for your procedure.

Is it advisable to open an international company with an accountant or a lawyer?

 The opening process is an important milestone for the start of the company’s activities in Brazil, as it will define its structure and relationship with the Brazilian authorities.

At first glance, it may seem feasible to open an international company with an accountant for the low cost they offer, since you only need to register the company.

However, as this service only offers the basics, you may have to pay high amounts for lack of proper fiscal and tax guidance.

The company’s lack of tax planning, guidance on the best tax regime, and even verification of immigration legislation are examples of situations that can be avoided when opening a company is well-planned.

For these reasons, it’s recommended that you open the company with a specialized and experienced lawyer to have proper guidance and agility in the opening process.

Look for a specialist of your choice to assist you in opening an international company.

And know that, if you want legal assistance from our team of lawyers, you can contact us through our service area.