Foreign Investment Law Report

Mandatory Registration of Nonresident Corporations, in the Federal Taxpayer Registry

Brazil's Federal Revenue Service (SRF) issued - on 9/13/02 - Ordinance 200 (Instrução Normativa 200) establishing that nonresident corporations (including inter alia limited liability companies and nonstock corporations) that own certain goods or rights in Brazil, must enroll in the Federal Taxpayer Registry (CNPJ).

Pursuant to said ordinance nonresident corporations that own, in Brazil, goods or rights subject to public records must enroll in the CNPJ. Qualifying goods and rights include1: (a) real estate, (b) vehicles, (c) vessels, (d) aircrafts, (e) shares / member interest of/in any and all kinds of companies organized and incorporated under the laws of Brazil, (f) bank accounts, (g) securities, (h) publicly traded stock. IN 200 expressly exempted trademark and patent owners from registration with the CNPJ.

The deadlines for enrollment are: (i) not later than November 29, 2002, for owners of real estate or the goods referred to in (b) thru (d) above; (ii) not later than December 30, 2002, for owners of shares / member interest in a company, or the goods referred to in (f) thru (h) above.

Enrollment in the CNPJ is accomplished by filing the electronic forms available at the SRF's website www.receita.fazenda.gov.br. Nonresident corporations must appoint an attorney in fact, resident in Brazil, with sufficient powers to represent them before the SRF. The attorney in fact must have powers to receive service of process (including summons) on behalf of the foreign company and to act as administrator of the grantor's qualifying good(s). In order to complete the enrollment the attorney in fact must courier to the local (i.e., attorney's place of residence) SRF office copies of the grantor's: articles of incorporation; shareholder/board resolution appointing the attorney; power of attorney. All the copies must be certified by the Brazilian Consul of the place of domicile of the foreign corporation.

Upon enrollment in the CNPJ the nonresident company must maintain its filing information updated. Changes in the roster of shareholders or company officers, for example, must be communicated within thirty days of the date of the corresponding event. If the corporation ceases to own the qualifying good or right it can cancel its taxpayer registration. To that end the attorney in fact must submit a statement that the company does not have title to the qualifying good...