If you are interested in starting a business in Brazil, you may want to form a branch. Because when you incorporate a branch in Brazil, you retain broad control over the entity from your home base, as well as enjoying the benefits of having your product or service already developed.
To be successful in this endeavor, you will want to have reliable legal and accounting support. Local professionals are very important at the beginning stages of a new business venture to ensure that everything is done according to local law, and especially so that all future complications can be avoided/minimized. Brazilian legislation is very complex and difficult to interpret, especially for foreigners. Currently, there are various legislative changes in relation to commercial and labor law which should be taken into account.
To incorporate a branch office of a foreign company in Brazil, there are some basic requirements that need to be met. Without meeting these requirements, it is impossible for the business to begin commercial activities.
Read on the article to understand how to form a branch in Brazil. Below, we will identify some of the key steps necessary to ensure the incorporation of a branch office of a foreign company. Or go ahead and contact us now to discuss your commercial options.
Incorporate a branch in Brazil in 8 key steps
The process to incorporate a branch office in Brazil is as follows:
Step 1: Request your local tax number
Before beginning the branch formation process, the company shareholders (at least 2) will have to obtain your Brazilian tax ID, known as the CNPJ (for companies) or CPF (for individuals).
Step 2: Register with the Central Bank
Once the shareholders have obtained their identification numbers, they will be registered before the central bank and then before the Federal Revenue of Brazil.
Step 3: Appoint a Brazilian Legal Representative
To form a branch in Brazil, the next step would be to use a Power Of Attorney to appoint a Brazilian Legal Representative.
Step 4: Draft the company bylaws
The company bylaws will need to be drafted.
Step 5: Regsiter the branch
The branch will be registered before the local Trade Board and other local authorities
Step 6: Open a corporate bank account
In order to incorporate a branch in Brazil, the next step would be to open a bank account. The documents needed to open a bank account are:
- documents from the shareholders
- articles of incorporation
- taxpayer ID.
Step 7: Register the social capital
Register the social capital of the branch with the Brazilian Central Bank System
Step 8: Deposit the company captial
The initial company capital (this amount will depend on the Especial Secretary) must be deposited into the Brazilian corporate bank account.
Additional Information to Incorporate a Branch in Brazil
Appointment of a prosecutor
It is required to appoint a corporate and tax prosecutor to represent the foreign firm who will act as the company’s Legal Representative in the country to incorporate a branch in Brazil. This individual must be a Brazilian citizen or have a permanent visa and fixed residence in Brazil.
This individual plays a very important role in the company; having both legal and fiscal responsibilities before the Brazilian authorities.
After the appointment of the prosecutor, someone responsible should be chosen to administrate the company. They must also be a native Brazilian or have a permanent visa and a fixed residence in Brazil.
Legalization of documents of foreign partners
All original documents produced abroad must be approved by a Brazilian Consulate in the country in which they were issued. Whoever performs this step must be Brazilian diplomatic representative.
To form a branch in Brazil, all documents issued are required to be legalized by the Ministry of Foreign Affairs – MRE (Itamaraty).
Please note that some agencies or departments of the Brazilian Government require sworn translations by an officially registered translator.
Company and individual registrations
All companies that are created in Brazil must obtain an identification number (CNPJ), issued by the ‘Secretariat of the Federal Revenue of Brazil (Secretaria da Receita Federal).
It is necessary to register in the PEMP500 Of Cademp Sisbacen, which, after approval by the Central Bank, is sent to the Federal Revenue of Brazil, assigned a number (CNPJ) and returned to the Central Bank.
All foreign partners must obtain the CPF (Registers of Individuals). Without this document, it is impossible to incorporate a branch of a foreign company in Brazil. It must be filled out online on the Federal Revenue of Brazil website (in English, Spanish or Portuguese) and delivered along with copies of personal documents at a Brazilian consulate or embassy.
Statutes of the new company registration
For the branch of a foreign company to be established, it is necessary to write the company statutes based on all the legal standards required by the Brazilian authorities. These statutes shall be determined by social reason/object, registered company address, corporate capital, management/administration and the contractual clauses.
After the statutes of the company are finalized, they should be registered by the public authorities. This record is what allows the collection of taxes and duties by the Federal Revenue of Brazil.
Opening a business bank account in Brazil
For companies or foreign partners to make the financial movements, such as investments, loans or capitalization, a bank account must be opened with the Central Bank of Brazil, which regulates these records through the Electronic Declaratory Record (RDE).
Biz Latin Hub can help you to incorporate a branch in Brazil
For more information and legal guidance to incorporate a branch of a foreign company in Brazil, reach out to Biz Latin Hub. Our team offer tailored business services to support your business plans in Brazil and Latin America. Reach out to our friendly team for personalized assistance.
If you are looking to incorporate a new company in Latin America, it is advisable to partner with a team of local specialists who can assist you with all your accounting and financial needs. Watch this video for further information.
By GAROFALO, Carolina 22/06/2018