Brazil being the fifth largest country of the world is also the biggest economy in the South American continent. Brazil has the fifth largest population in the world making it a big consumer market. Having a base in Brazil provides access to the entire South American market.

What are the types of companies that can be opened by a foreigner in Brazil?
There are three types of companies that a foreigner can set-up in Brazil. They are:
1. Limited Liability Company (LLC)
2. Joint Stock Company or Business Corporation
3. Single person LLC (Eire Li)
Procedure to #setup a #company in #brazil
Let us now discuss the step-by-step procedure to set-up a company in Brazil
1. Choosing the type of legal entity
The promoters must choose the type of legal entity which would be most suitable according to their business objectives. The promoters can choose a business entity such as an LLC, a Corporation and a single member LLC.

2. Performing a viability study
Once the type of business entity has been decided by the promoters, the next thing that is supposed to be done is performing a viability study in the municipal departments of the city in whose jurisdiction the promoters wish to set up their business.

The promoters must be aware of the following restrictions in terms of the business purposes imposed on the foreigners:
• Acquisition or renting of rural property;
• Financial institutions;
• Air transport companies;
• Media including television networks, magazines, newspapers, radio broadcasting stations and
• Mining sector
Further, the following sectors have been prohibited from foreign investment:
• Nuclear energy;
• Healthcare services;
• Mail and telegraph services and
• Aerospace

3. Registration of the Articles of Incorporation
Having selected the type of business entity and performing the viability study, the next process is the registration of articles of Incorporation with the local commercial board of the state where the promoters want their company to be located.
They include:
• The personal Identification details each shareholder viz. Their nationality, Identification documents, address and Brazilian tax identification number (which must be obtained by the promoters beforehand);
• The business purpose of the company in accordance with Brazil’s CNAE system, where every business has a corresponding code;
• The share capital of the company and the percentage of each shareholder in the share capital of the company and
• The administrator of the entity (who is a Brazilian resident and answerable to all the business activities taking place in Brazil)
It must be noted that before submission of these documents, they are required to be translated into Portuguese by a translator and submitted to the Bureau of Deeds and Documents.

4. Registration with relevant state and federal authorities
The company needs to be registered with several other state and federal authorities before starting its business operations in Brazil. Every company is required to be registered with the Federal Revenue Bureau and the respective state and municipal authorities depending on the type of business operations the company wants to carry out in Brazil. Further, depending on the number of employees hired by the company, registration should be done with the individual unions as well.

5. Registration with the Brazilian Central Bank
Once the legal formalities with the respective departments are completed, the processing of investment of the capital by the foreign entity into the Brazilian company begins. The remittances sent by the foreign entity will be sent in the form of monetary resources or through assets, machines, equipment etc. In order to receive the foreign remittances, the Brazilian company needs to be registered with the Brazilian Central Bank, which issues a taxpayer ID or CNPJ number to the company that is used for receiving remittances in Brazil.
Failure to comply with this provision may lead to the imposition of a heavy penalty on the Brazilian company and may even affect the potential investor visa. Registration with the Brazilian Central Bank is also important in order to repatriate funds to another country.
6. Opening of a bank account in the company’s name
The final step to set up a company in Brazil is the opening of a bank account in the name of the company. During the opening of an account in the company’s name, the bank carries out extensive KYC procedures. The documents that are required to open the account include:
• Shareholders’ documents;
• CNPJ number and
• Articles of Incorporation.

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