Opening a Company in Brazil as a Foreigner

In a world ever more connected, with a high amount of people and business mobility, the opportunity of working outside your home country is becoming a reality, no longer unusual. In this sense, the interest in opening a company as a foreigner in Brazil is a very frequent question, especially when it comes to the idea’s feasibility and the requirements to this process.

Regarding this subject, it is important to make it clear from the beginning that a foreigner can open a company in Brazil, being part of the business or the board of partners, and can do it living in Brazilian territory or not. But, to do so, he must meet some requirements and go through some bureaucratic procedures, which may vary according to the type of company.

In recent years, Brazilian regulations have been facilitating the entry of new investments, seeking for attracting investors from abroad to establish businesses in the national territory. However, Brazil still maintains its bureaucratic profile, especially when it comes to the process of opening a company in the country as a foreigner: a Brazilian needs to go through 13 legal steps to set up a business, and a foreigner, 22.

Despite this, many requirements are easily solvable, and opening a company as a foreigner in Brazil to have access to its market benefits is not as difficult as it seems at first glance. In this article, we will look at the main legal requirements for opening a company as a foreigner in the country and how to get the necessary licenses throughout the process. Check it out below!

How does the process of starting a company for foreigners work?

The documentation and steps required to open a company as a foreigner in Brazil will vary, mainly, according to the visa and residence status of the interested party. Regardless of the status, the foreigner must register with the Inland Revenue to obtain the CPF (Individual Taxpayer Registration). Let’s now learn about the different cases:

Foreigners with fixed residence in Brazil or a permanent visa

For foreigners living in the country, the process is quite similar to that of Brazilians residing in their homeland. The difference being that they must present a regular RNE (National Identification Roll for Foreigners), whether permanent or temporary. This is obtained by identifying yourself at the Department of Justice through the Federal Police.
In addition, in order to be a company owner, the Board of Trade (Junta Comercial, in Portuguese) requires a permanent visa, which can be granted by the Department of Foreign Affairs, along with a Work Permit issued by the Department of Labor. This visa applies to researchers or high-level specialists, manager or director of a commercial or civil company, and investors who can prove the investment of at least R$ 150.000 (a hundred and fifty thousand reais) and the employment of Brazilian professionals in his new business. The exception to this rule applies only to citizens from Mercosul and associated countries, which are entitled to exercise activity as businessmen with a temporary visa of at least 2 years.
If the foreigner is not from Mercosul and does not have a permanent visa, he can still be part of the investing partners, but he cannot have a management role in the business.

Foreigners not residing in Brazil, or Brazilians living abroad

Foreigners having no residence in Brazil must present a specific power of attorney to the Board of Trade, appointing an attorney-in-fact with full powers to resolve issues of interest to the grantor – including the responsibility to respond to administrative proceedings or lawsuits related to the company. In addition, he will need to be registered with the Inland Revenue (to obtain a CPF) and with the Central Bank of Brazil (BACEN), through the Electronic Declaratory Registry (RDE).
Another important point is, for those who have no residence in Brazil, being the Director or Administrator per se is not allowed, although it’s authorized to join the board of administration. Finally, there are some legal restrictions on the company’s fields of activity so that the participation of foreign partners is allowed, as we will see below.
Are there restrictions to open a company as a foreigner in Brazil?
Yes, although it is possible to open a company as a foreigner, there are certain branches with legal restrictions on your participation in the partners’ board:

Company with Foreign Capital in the Health Care Segment: foreign participation is forbidden, with rare exceptions;
Cabotage and Shipping Company: in this case, the foreigner can only be part of one company and his participation must be less than 50% of the company’s capital;
Journalistic, Sound and Image Broadcasting Company: only allowed to native Brazilians or foreigners naturalized for more than 10 years;
Cable TV Company: must have a total working force made of 50% of native Brazilians and/or naturalized foreigners for more than 10 years;
Road Cargo Transport Company: four-fifths of the company’s total workers must be Brazilians;
Mining Company: 51% of the company must be Brazilian.

Furthermore, it is worth mentioning that foreigners can be MEI (Microempreendedor Individual: that is, a small entrepreneur). However, it is necessary to have a permanent RNE, with the exception of citizens from Mercosul member countries and Associated States with temporary residence of at least 2 years.

If you need experienced accounting advisory services capable of providing the best strategies to improve your company’s financial performance, contact us. CLM Controller is ready to offer customized solutions that meet your business needs.

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