Latin America’s largest economy, Brazil is the ideal business playground for entrepreneurs, investors, and innovators seeking access to a massive consumer market.
If you’re considering starting a business in Brazil, it’s essential to understand the legal requirements, company structures, documentation, and regulatory bodies that govern the process to navigate this in a smart manner.
Below is your complete, foreigner-focused guide to everything involved in starting a business in Brazil as a foreigner, including company types, tax regimes, legal requirements, timelines, costs, and business visa considerations.
Can foreigners start a business in Brazil?
Yes, foreigners can start a business in Brazil. You simply need to obtain a CPF, an 11-digit tax identification number issued by the Brazilian Federal Revenue, and meet the basic registration requirements.
You do not need a Brazilian business partner to do so, except in a few restricted sectors such as the media, nuclear energy, and aviation.
What are the requirements for foreigners to start and own a business in Brazil?
The following requirements are a must-have if you want to be the legal owner of a Brazilian entity:
Obtain a CPF (Cadastro de Pessoas Físicas) number
A CPF is the taxpayer identification number that links you to the Brazilian federal revenue service. It’s a requirement for all shareholders, partners, administrators, and directors, regardless of nationality or residence.
Appoint a legal representative
Non-residents must appoint a Brazil-based legal representative with a CPF and local address, ensuring compliance with Brazilian law.
This legal representative will sign documents and fulfill obligations on behalf of the foreign investor.
Provide a Power of Attorney (POA)
Foreign shareholders must issue a notarized, apostilled Power of Attorney, authorizing the above-mentioned Brazilian representative to act on their behalf.
Prepare notarized and apostilled documents
Foreign corporate documents, passports, and legal agreements must be translated by a sworn translator (tradutor juramentado) and filed with the Commercial Board or other appropriate Brazilian authorities to facilitate smooth financial operations.
Foreigners can own 100% of a company and be the sole shareholder through an SLU, Brazil’s single-member limited liability company that allows a foreign shareholder to open and operate any type of limited liability company without needing a partner, as long as all requirements have been met.
How to Register a Company in Brazil: Step-by-Step Guide
1. Choose your business structure and get CNAE code
Before filing anything, to streamline the entire process you must decide which legal entity suits your needs.
- Ltda.: Limited liability company (LLC-style).
- S.A.: Corporation/stock company.
- EI: Sole proprietorship.
- MEI: Micro-entrepreneur structure.
- SCP: Silent partnership.
- Consórcio: Consortium for joint projects.
You also need the correct CNAE code (Classificação Nacional de Atividades Econômicas), which serves as your official business activity classification and is used to categorize companies and self-employed individuals based on their primary economic activity.
Choosing the correct CNAE code affects operational aspects like:
- Tax obligations and tax compliance.
- Operating and municipal licensing requirements.
- Eligibility for simplified tax structures.
2. Gather required documentation
Foreign shareholders and owners will need to diligently need to meet foreign direct investment requirements before applying:
- Passport (notarized and apostilled).
- Proof of local address for the company’s headquarters.
- CPF number for all partners/shareholders.
- Notarized Power of Attorney for the legal representative.
- Corporate documents (if the shareholder is a foreign company).
- Sworn Portuguese translations of all foreign documents.
Brazil’s documentation process is detailed, and you must comply with the Brazilian Civil Code (the primary legal structure for starting a Brazilian business), notary requirements (Cartório), and state regulations, as well as with Brazilian business law.
3. Draft the company’s governing documents
Depending on the entity chosen, you will need to prepare:
- Contrato Social (Social Contract): Used for Ltda and SLU companies. It outlines the business activity, who owns the company, how it is managed, each partner’s responsibilities, and how capital is divided.
- Estatuto Social: Often referred to as Corporate Bylaws in English. It is used for S.A. (Sociedade Anônima) corporations. It sets the rules for shareholder meetings, the board structure, capital organization, and the reporting obligations required under Brazil’s Corporations Law (Lei das S.A.).
All documents must be signed, notarized, translated (if applicable), and filed with the appropriate state Junta Comercial (Board of Trade).
4. Register your company with the Junta Comercial
This creates the legal existence of the company. Upon approval, the business is officially incorporated.
The Board of Trade may require:
- Signed and notarized incorporation documents.
- Identification and CPF numbers of partners.
- POA and representative documents.
- Proof of address.
- Sworn translations.
5. Obtain the CNPJ from Receita Federal
The CNPJ (Cadastro Nacional da Pessoa Jurídica) is your company’s federal taxpayer ID, part of the national register issued by the Receita Federal do Brasil (RFB).
Without a valid CNPJ, you cannot:
- Open a business bank account.
- Hire employees.
- Invoice clients.
- Register foreign capital.
The RFB also records shareholder information through the QSA (Quadro de Sócios e Administradores).
6. Complete state and municipal registrations
Depending on your business activities:
- Inscrição Estadual (State Registration): Required for companies that sell goods, trade products, or engage in manufacturing. This registration links the business to ICMS, the state-level value-added tax.
- Inscrição Municipal (Municipal Registration): Required for businesses that provide services. This registration is needed to pay ISS, the municipal services tax. These registrations may be automatic in some states but often require separate filings.
7. Apply for the Alvará de Funcionamento (operating license)
This municipal license is issued where your company is headquartered.
The process may involve:
- Zoning approval.
- Health and safety inspections.
- Fire department regulation.
- Sector-specific approvals. For example, inspections by ANVISA (the Brazilian health regulatory agency) for health, pharmaceuticals, cosmetics and food related businesses.
8. Register foreign capital with the Central Bank (if applicable)
If foreign investment is made in the company, you must register it via:
- SISBACEN (Brazilian Central Bank Information System).
- RDE-IED (Electronic Declaratory Registration for Foreign Direct Investment).
This is overseen by the Banco Central do Brasil (BACEN) and ensures compliance with:
- Foreign exchange controls.
- Repatriation of profits.
- Capital inflows reporting.
- Taxation of dividends, royalties, and interest.
Failure to register foreign capital can lead to fines and the limitation of profit distribution.
9. Open a business bank account (Conta Corrente Pessoa Jurídica)
<insert link to “banks in Brazil” article – to be published>Banks in Brazil</link> require:
- CNPJ.
- Contrato Social / Estatuto Social.
- CPF of shareholders/administrators.
- Power of Attorney (POA) for foreign owners.
- Proof of company address.
- Sworn translations of foreign documents.
- Digital Certificate (Certificado Digital) to access tax systems.
Foreign-owned companies may face longer compliance checks (such as KYC), but banking is mandatory for payroll, invoicing, and capital deposits.
10. Register with labor and social security authorities (if hiring employees)
If your company plans to employ staff in Brazil, you must complete three key registrations:
- INSS (Instituto Nacional do Seguro Social): The national social security system. Employers must register to make mandatory social security contributions for employees.
- FGTS (Fundo de Garantia do Tempo de Serviço): The employee severance fund. Employers pay a monthly contribution into each employee’s FGTS account.
- eSocial: Brazil’s unified digital platform for reporting payroll, tax, social security, and labor information. All employers must integrate their payroll system with eSocial.
Company Types in Brazil
1. Ltda (Sociedade Limitada)
The Ltda is Brazil’s most common business structure, widely used by both local and foreign entrepreneurs. It functions similarly to an LLC and offers a high degree of flexibility.
Advantages include:
- Flexible governance is suitable for small and medium-sized businesses.
- Limited liability (protects partners’ personal assets).
- No minimum capital requirement.
- 100% foreign ownership permitted.
An Ltda is governed by its Contrato Social, which defines the partners, their capital contributions, management rules, and the company’s business activities.
2. Sociedade Limitada Unipessoal (SLU)
The SLU is a single-member Limited Liability Company. It allows one individual, Brazilian or foreign, to form a limited liability business without needing additional partners.
Advantages include:
- Single shareholder permitted.
- No minimum capital requirement.
- Full limited liability protection.
This structure is ideal for foreign founders who want sole ownership of their Brazilian business.
3. S.A. (Sociedade Anônima)
An S.A. is a corporation or stock company, commonly used for larger businesses or companies intending to raise capital.
It is used for:
- Large enterprises.
- Raising investment through shares.
- Public listings.
- Joint ventures or complex corporate structures.
S.A.s are governed by Lei das S.A. (Corporations Law) and must follow strict regulatory standards, including:
- Having a board of directors.
- Undergoing financial auditing.
- Publishing annual financial statements.
This structure offers higher credibility for investors but involves more compliance.
4. MEI (Microempreendedor Individual)
MEI is a simplified business structure for micro-entrepreneurs with low revenue (annual cap applies).
It is important to note that foreigners cannot register as MEI unless they hold permanent residency in Brazil. Temporary residents and non-residents are not eligible.
5. Branch office or subsidiary
An international company may operate in Brazil by registering a branch (filial), but:
- The approval process is lengthy.
- Authorization must be granted by the Ministry of Development, Industry, and Commerce.
- Additional compliance requirements apply.
Because of this complexity, most foreign companies choose to open a Brazilian subsidiary, typically structured as an Ltda, which is faster, simpler, and widely accepted by Brazilian authorities and banks.
How long does it take to open a company in Brazil?
- Document preparation: 1 – 4 weeks
- Junta Comercial registration: 2 – 8 weeks.
- Obtaining CNPJ: within days after Junta approval.
- Bank account approval: 2 – 10 weeks
- Municipal/state permits: 2 – 8 weeks
Total wait time until full operational capability should be between 2 to 4 months
What is the cost of opening a bank account in Brazil?
The costs of opening a bank account in Brazil vary by state and business type, but can include:
- Notarization and apostille of foreign documents.
- Sworn translations (you pay per page).
- Legal fees.
- Junta Comercial registration fees.
- Municipal and state registrations.
- Digital certificate issuance.
Expect a total initial cost ranging from R$5,000 to R$ 25,000 (US $920 – US $4,600), depending on the complexity of your application.
Visa Options for Entrepreneurs in Brazil
The Brazil Investor Visa is a residency program that grants temporary (and later permanent) residency to foreigners who make a qualifying investment in Brazil.
You can obtain residency through this visa by:
- Investing in a Brazilian company (new or existing).
- Creating jobs for locals.
- Establishing a new or innovative business.
This visa is ideal for entrepreneurs who want long-term residence in Brazil and not just want to occasionally visit the country for business purposes.
Taxation and Obligations for New Brazilian Entities
Brazil offers three primary tax structures. The one your company falls under will depend on its size, revenue, and business activity (CNAE code).
Each structure determines how your taxes are calculated and what your overall tax burden will look like:
1. Simples Nacional (National Simple Tax Regime)
Simples Nacional is a simplified tax system designed for micro and small businesses.
It consolidates up to eight different federal, state, and municipal taxes into a single monthly payment, greatly reducing administrative complexity.
How it works:
- Available only to businesses under a specific revenue threshold (updated annually).
- Not all business activities qualify.
- Tax rate varies depending on revenue and sector.
- Ideal for very small companies that want simplified compliance.
2. Lucro Presumido (Presumed Profit Regime)
Lucro Presumido is one of the most common tax structures for small and medium-sized companies.
Instead of tax being calculated on actual profit, the government applies a presumed profit margin based on your CNAE business activity.
How it works:
- The government assumes a standard profit percentage (for example, 8% for trade and 32% for services).
- Taxes are calculated on this presumed amount, regardless of your true profit.
- Easier to manage than Lucro Real (see below).
- Can be tax-efficient for businesses with high revenue but relatively low actual profit margins.
This tax structure is attractive for SMEs looking for predictable tax calculations and fewer reporting obligations.
3. Lucro Real (Actual Profit Regime)
Lucro Real is required for large companies, regulated entities, and any business with annual revenue above a certain threshold.
It is also mandatory for companies in sectors such as finance and those receiving significant foreign investment.
How it works:
- Taxes are calculated on the company’s real net profit.
- Requires extensive bookkeeping and regular reporting.
- Can be beneficial for companies with thin margins or fluctuating profitability.
- More complex but allows deductions that are not available in other tax structures.
Since it reflects actual profit, this tax structure is considered the most accurate as well as the most compliance-heavy.
What are the regulatory considerations for opening a business in Brazil?
What are the regulatory considerations for opening a business in Brazil?
- Central Bank Registration (BACEN): Any foreign capital invested in a Brazilian company must be registered with the Central Bank of Brazil (BACEN) through the RDE-IED system. This is essential for recording foreign ownership, repatriating profits or returning capital, and ensuring compliance with Brazil’s foreign exchange rules.
- LGPD (Lei Geral de Proteção de Dados): Brazil’s data protection law is applicable to any business that handles personal data, including that of customers, employees, or partners. Companies must collect and store data lawfully, protect personal information, be transparent about their data processing practices, and implement security measures.
- Sector-specific licensing requirements: Depending on your company’s business activity, additional approvals may be required from regulatory agencies, such as ANVISA (health, pharmaceuticals, cosmetics, food production, and medical products), environmental agencies, and financial regulators.
- Custo Brasil (Brazil cost): Custo Brasil refers to the bureaucratic, administrative, and operational complexity that businesses often face in Brazil.
For foreign investors, working with experienced local accountants, legal counsel, and compliance specialists is essential to navigate the challenges associated with all of the above efficiently and avoid costly delays.
How Can Global Citizen Solutions Help You?
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