Brazilian laws are already a problem for the natives themselves, let alone for foreigners. This is why it is important to work with good professionals, especially lawyers and accountants, so that the operations are not wrongfully carried out and end up creating future contingency if it happens.
How to deal with the Brazilian laws?
For a foreign company to establish itself in Brazil, it must know the laws of our country, like it is happens with any other country where one wants to open a venture.
As we have already said, both the corporate constitution and the labor laws are quite complex and keep constantly changing, which makes them look like an alphabet soup.
The most assertive and secure solution for achieving your purpose is to quickly and safely look for the services of companies specialized in accounting and legal consulting.
Below are some things that are essentially needed in order to open a foreign company in Brazil:
Step 1 – CNPJ [Corporate Taxpayer Registration Number] and/or CPF [Individual Taxpayer Registration Number] of the foreign partners
In this first moment, it is necessary to obtain the CNPJ number for the foreign corporate partners. The procedure is normally done online, and it is necessary to have a copy of the articles of association/incorporation of the foreign company, as well as personal documents of the foreign company’s administrator.
It will be necessary to be enrolled with Cademp, which, after being approved by the Central Bank of Brazil, is sent to the Brazilian Internal Revenue Service, assigned with a CNPJ number, and returned to the Central Bank of Brazil on the following day.
Cademp is a registry of individuals and legal entities residing or not in the country that participates in foreign capitals at the Central Bank of Brazil.
So that foreign members can obtain the Individual Taxpayer Registration Number (CPF), they must simply fill out the form in English, Spanish or Portuguese available on the Brazilian IRS webpage, print it and deliver it along with copies of personal documents at the Brazilian consulate or embassy with the consular sector, in order to render the request effective.
The Brazilian Consulate will process the application and then provide the requested CPF number. If there is any inconsistency, the application will be forwarded to the Brazilian IRS for analysis. If no problem is found, registration is immediate.
Step 2 – Power of Attorney
At this stage, a power of attorney written in a foreign language is created, nominating a Brazilian that is native, naturalized or with a permanent visa in Brazil, who will have legal and fiscal responsibilities and who will represent the foreign partner before the Brazilian authorities.
Step 3 – Certifying the authenticity of documents in a foreign language
All of the original documents produced abroad must be annotated, for those Hague Apostille member countries, or certified by the Consulate in the country in which they were issued (where there is a Brazilian diplomatic representation).
In this case, it will be necessary to have documents such as the following certified:
- Power of attorney nominating the Brazilian resident to represent the foreign partner
- Articles of association/Incorporation of the corporate partners
- Personal document of the foreign company’s administrator
Step 4 – Sworn translation of all foreign documents
After the annotations or certifications by the Consulate of documents in a foreign language, it will be necessary to provide a sworn translation of said documents, since the government agencies and departments require sworn translations by an official translator registered with the Trade Board, authenticating the originality of the documents in a foreign language.
Step 5 – Registration of sworn translations in a Registry Office
Some sworn translators already provide the registration of the sworn translations with the registry office, but when this is not the case, it is necessary that the translated documents be submitted for registration at the registry office for them to be legally valid.
Step 6 – Articles of Association/Incorporation of the Brazilian company
In this step, as in any corporate constitution, the accounting and legal advice are necessary, so that the wordings of the agreement are on based and in accordance with all the pre-established standards, in this case with more attention, since it is a company with foreign partners.
It is important that, at this stage, the following points have already been defined:
- Company’s name
- Business address to be the Brazilian company’s headquarters.
- Exact description of the company’s corporate purpose, explaining what activities the company will perform in Brazil.
- Total share capital and the participation of each partner in the company.
- Definition and nominee of who will be the company’s administrator, who must necessarily be a Brazilian that is native, naturalized or with a permanent visa in the country.
Step 7 – Registration with the Trade Board and obtention of the CNPJ
After the articles of association/incorporation are finalized and all of the signatures are collected, they must be validated by the Federal, State and Municipal Public Agencies for them to have their corporate purpose legally operating with the proper licenses and obtainment of the CNPJ number. This registration is what allows the collection of taxes and obligations.
The initial registration is done with the Trade Board, in order to open the company and, a few days later, it is possible to obtain the enrollment with the CNPJ. After this stage, there is the state registration with the Treasury Department in order to obtain the state registration number, which is common for companies with commercial and industrial activities, and authorization for issuing the invoice for the sale of products. At last, it is necessary to open the company before the municipality, where the municipal registration number will be obtained and, for service providers, the authorization to issue a service invoice is also needed.
Step 8 – Obtaining the Society’s Digital Certificate
Upon obtaining the CNPJ number, the company’s legal representative administrator will need to acquire the company’s digital e-CNPJ certificate, presenting documents such as:
- Company’s Articles of Association/Incorporation
- Two personal documents of the administrator with photo
- Proof of residence
- CNPJ card issued on the day they went to the certifiers
Step 9 – Opening a Bank Account
The required documentation varies according to each financial institution, but it is common for the bank to request all the documents that were used to establish the company, plus bank forms. It is important to know that before sending funds from abroad to Brazil, the company must have already opened said current account, as well as it must have completed the entire exchange transaction validation process, because all the financial transactions made between the foreign partner and the Brazilian company, be it investments, loans, or capitalization, need to go through the electronic records of the Central Bank of Brazil. These records are regulated by the Electronic Declaratory Registration Module (RDE) and are prepared before the exchange rate is closed with the Brazilian financial institution.
Obviously, after the company is incorporated, there are other steps that need to be observed, mainly for mandatory licenses to perform the company’s activities.
After the corporate constitution part is finished, the attention goes towards to the labor and tax part, because even a company without any type of movement needs to have an accountant to send the tax information to the Tax Authorities, otherwise, they would already have tax contingency and it would be a surprise to know that there are fines to pay if you hire an accounting consultancy only when the company starts its operations.
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