Launching and Developing American Businesses in Brazil

In order to start and operate a business in Brazil businesses need to understand that it can be complex and require an in-depth understanding and approach of all the rules and regulations. Veritas Management Group can assist you and your company throughout the process. Our assistance will guide your business throughout the legal and accountancy requirements while providing you with the insight and strategic diversification into a new market. We assist you with a proper legal presence and partner with businesses to develop an effective international strategy that creates value throughout a firm’s activity across borders thus implementing an effective corporate strategy beyond borders and cultural limitations.

Legal Process

In order to operate locally, companies must navigate a long process of incorporation through five major steps with smaller tasks involved during each step. The entire process of incorporating a new entity in Brazil can take 60-90 days, plus the time needed to open a bank account.

1. Planning to Ensure Preparedness

The first step to incorporate your business in Brazil is planning and gathering all of the necessary information you will need to provide to authorities through the rest of the processes.  You must first define the type of entity you want your business to operate under in Brazil. There are a few options: corporation, LLC or a branch. Another  option is called an Eireli. This is a corporation with one shareholder and a minimum capital requirement. About 90% of the businesses in Brazil choose to become limited liability companies. The type of entity you chose is based on the activities and the future plans for the company in Brazil.  These plans must be defined ahead of time, including the specific activities and where they will be performed in the country.  This is imperative as each municipality has different tax codes and rules depending on type of activities and will become relevant when registering with municipality authorities.

During the planning stage, businesses must also choose an address for their business to operate from that is compatible with the activity of the business.An industry cannot operate in a commercial or residential area.  In order to register the articles of incorporation, an address must be listed.

Another requirement in Brazil is to pick a corporate name for your business which contains the type of activity that your business will conduct. If you will start a construction firm, the word building or construction needs to be present in the name. It is important to note, when registering, you will be able to indicate a brand name that will be used commercially that does not need to describe the activity.

The articles of incorporation must also include the amount of corporate capital that will be used to start the company and when the capital will be paid. This means the company must decide these amounts of money and time during the planning phase.

2. Articles of Incorporation

Documentation for the articles of incorporation must be submitted to the Board of Trade. Depending on the state, there are varying costs associated with the registration.  The articles of incorporation must include the:

• name of the entity

• address of the business

• shareholders

• capital

• activity

• company name

• administrator of the company (must be a legal Brazilian resident).

3. Registration with public authorities

The next step in the incorporation process requires registration with many different authorities and their mandatory registrations at the Federal Revenue Bureau, the municipal authority and the state authority. Depending on the activities of the employees, the company must also be registered with individual unions. Specific types of businesses also require other registrations at different public authorities, like lawyers, accountants, pharmaceutical companies, etc. There are varying fees and procedures for registrations at every authority.

4. Brazilian Central Bank

Companies will be issued a CNPJ (Taxpayer ID Number). This process can be completed online but all of the information about the Ultimate Beneficial Owner (UBO ) must be provided. Monthly accounting will  be needed and an annual municipal tax as well as various applicable taxes.

5. Bank Account

While this is the last step in the process of incorporation, it can be an extensive  procedure and require anywhere from a few days to up to three months depending on the bank, paperwork and financial situation.

The documents needed to open a bank account are:

• documents from the shareholders

• articles of incorporation

• taxpayer ID. (CNPJ)

We can help

Veritas Management Group can guide your business through the tedious process of incorporation.  We understand the importance of time and efficiency. Our team of experts excel at navigating through each step of the process and make sure all documentation is correct for all the relevant authorities leading to a much faster turnaround for your business. Instead of the usual 60-90 days to incorporate a business in Brazil, our experts can cut the time down to 15-20 days. Our local knowledge makes us the perfect partner for your business needs in Brazil.