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Form a Brazil Corporation

Form a Brazil Corporation Introduction

Brazil is officially known as the “Federative Republic of Brazil” and is the largest country in all of Latin America. It is the fifth largest country in the world in population and land area. Portuguese is the official language after being a Portuguese colony for many years and is the largest Portuguese speaking country in the world. Brazil is bordered by the Atlantic Ocean to its east with a coastline of 4,650 miles (4,490 kilometers). It borders every South American country except for Chile and Ecuador while covering 47% of the South American continent’s land area.

A corporation (Sociedade Anônima) is governed by Law 6.046 of 1976 while a Limited Company is governed by the Civil Code (Articles 1.052 to 1.087) and a Partnership by Civil Code (articles 997 to 1.038).

Benefits

Brazilian corporations receive many benefits including:

Only Two Shareholders: Only a minimum of two shareholders can form a Brazil corporation.

Only One Director: Only one director is required for incorporation in Brazil.

No Share Capital: With only a few exceptions, there is no share capital requirement to form a Brazilian corporation.

Brazil Invites Foreign Investors: Brazil’s business culture is friendly towards foreign investors.

Corporate Name

New corporations must select a unique corporate name which is not similar to other Brazilian corporations. It is recommended to submit three corporate names with top priority being the first one.

Office Address and Local Agent

Brazilian corporations are required to have a local registered agent and a local office address (anywhere in Brazil) for process servers and official notices.

The registered agent must be a resident of Brazil (can be a foreigner with a permanent residency visa and work permit) and acts as an intermediary between the corporation and the Brazilian government. The registered agent is responsible for filing all required documents with the government.

Shareholders

Brazilian corporations are required to have two shareholders.

Directors and Officers

Brazilian corporations are required to have at least one director.

Authorized Capital

Brazil has no share capital minimum for most corporations. However, some issues do arise that might require this option to change—like a non-resident applying for a permanent visa to manage the company. Consult with your registered agent prior to appointing non-residents to manage the corporation.

While Brazil’s corporate laws do not require a minimum capital investment, it is customary by the immigration department that nonresidents pay $50,000 USD in cash or the equivalent in transfers of technology or other capital goods to the Brazilian corporation in addition to the generation of at least ten new jobs within a two-year period.

Alternatively, a minimum investment of $200,000 USD in a Brazilian corporation is required if a nonresident is nominated as the manager of the corporation and in order to obtain the proper immigration residency visa.

Taxes

Corporate tax rates in Brazil usually run between 30% and 34%. Capital gains and stock sales are both taxed at a flat rate of 34%. Sales tax rates are 9.25%.

Annual Fees

Annual renewal fees for corporations in Brazil cost around $12, 000 USD.

Public Records

  • The corporate directors will need to provide their full names, birth dates, nationalities, and addresses.
  • The shareholders need to provide their full names and addresses.
  • Both the directors and shareholders will also be required to provide proofs of their identities. This can be accomplished with drivers’ licenses, national identity cards, or passports.
  • Both directors and shareholders need to submit their proofs of addresses. They can complete this by submitting certain types of utility bills or credit card statements that are less than 90 days old.
  • The corporation’s owner needs to prepare a statement explaining the corporation’s primary objective, and what the corporation plans to be doing in Brazil.
  • The corporation must disclose its capital as well as the corporate shares that have been assigned to each shareholder.
  • Furthermore, any documentation that comes from, or is signed, outside of Brazil has to be notarized by the Brazilian Consulate.

Accounting and Audit Requirements

Brazilian corporations are not required to keep annual records. However, Brazilian corporations are required to publish their annual financial statements, and they must be audited annually by an independent auditor. Filing annual tax returns is required in Brazil.

Annual General Meeting

General meetings must be held annually by Brazilian corporations. Annual general meetings can be held anywhere in the world.

Time Required for Incorporation

The incorporation process may take up to ninety days.  This estimate depends on the turnaround with the corporate name registration, as well as how accurately the corporation completes its registration documents.

Shelf Corporations

Shelf companies are available in Brazil for faster incorporation.