Many foreign companies are now investing in Brazil because of its economic growth.
Normative Instruction 76/98 of the National Registry of Commerce Department (Departamento Nacional do Registro do Comércio) explains how both foreigners and Brazilians residing abroad can open their businesses in Brazil.
For a foreign businessman who is an individual resident in Brazil, a permanent visa will be required, whereas for other individuals, be they Brazilian or foreign, residents or with their corporate headquarters abroad, managers of a commercial company or a cooperative, these have to submit a specific procuration at the Board of Trade (Junta Comercial), granting powers to their representative in Brazil.
When a national mercantile society is composed only of persons residing abroad or of foreign legal entities, an administrator residing in Brazil has to be appointed.
As a general rule, the main steps to be followed and planned by individual investors and companies interested in opening branches in Brazil are the following:
1) Identification of the partners, whether individuals or companies;
2) Constitution of both the company and its records in public institutions. There is no minimum company capital. However, if an individual investor needs a permanent visa, he or she must have a minimum capital of R$ 150,000. For companies that wish to indicate foreign administrators or directors, there must be a minimum investment capital of R$ 600,000;
3) Opening a bank account and capitalization of the company with the remittance of funds in foreign currency to Brazil through a bank institution;
4) Accreditation of the company at the Central Bank, registration of the foreign investor as well as the capital that will be remitted to the country.
The average time for the completion of these steps is approximately 60 days. After this phase, you can request the residence visa as investor, administrator and their dependents through Brazilian Immigration, which takes about 45 days to be approved.
Generally speaking, the process of setting up a business is identical in all sorts of activities, differing only as to categories of existing companies. A company that is established with the social objective of providing services will have to register its social contract at the Civil Registry of Legal Entities (Cartório de Registro Civil de Pessoas Jurídicas), whereas a commercial company, established for the purpose of exercising commercial or industrial activities, or trade and industry, will have to register its social contract at the Board of Trade (Junta Comercial) and may as well be established as an Individual Firm.
A company may be incorporated as:
1) a Civil Society;
2) a Mercantile Society;
3) an Individual Firm.
A Civil Society is established with the purpose of providing social services and must be composed of at least two partners. Registration is to be done at the Civil Registry of Legal Entities (Cartório de Registro Civil de Pessoas Jurídicas).
A Mercantile Society is constituted by two or more persons, its activity being commercial or industrial, or commercial and industrial. Registration is done at the Board of Trade (Junta Comercial).
Those interested in obtaining legal personality as an individual firm should follow the same steps listed in the process of setting up a commercial company, except for the social contract, in place of which a Declaration of Individual Firm (Declaração de Firma Individual) must be submitted. Moreover, the standard application should be appropriate for the constitution of an individual firm.
(Vanessa C. Bueno, Patricia Braga)
* Translation of:
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