Requirements For Doing Business In Brazil

Business rules in Brazil are complex and require that anyone thinking of doing business there have a clear understanding of the local rules and regulations.

As the world's seventh largest economy, with 200 million inhabitants and a GDP of US$2.25 trillion, Brazil attracts companies from all over the world interested in establishing a presence in the country.

Brazil's economy open for expansion

In 2014, Brazil had an economic crisis, where the foreign direct investment fell 22.9% from US$96.9 bils to US$ 74.7 bils in 2015. After a recovery in 2016, the foreign direct investment is expected to stabilize around US$ 75 bils in 2017 and 2018, resuming its growth in 2019. Brazil is now ready and open for business expansion opportunities.

Foreign investment in Brazil

The Brazilian Central Bank (BACEN) oversees the monitoring and regulating of all foreign exchange transactions that bring money in or out of Brazil. For all operations with the BACEN, a Corporate Taxpayer Identification Number (CNPJ) is required from non-residents that own certain properties or rights in Brazil.

There are penalties for the failure to comply with this requirement. Foreign direct investments must register with the Brazilian Central Bank and if the investment is in capital markets they must register with the Brazilian Securities Commission. They must also have a representative who is a Brazilian resident.

While Brazil is open to foreign investment, there are certain sectors that are restricted to nationals or need to be overseen by the government. The sectors are financial institutions, press and broadcasting services, airlines with domestic flight concessions, postal services, private security and transport, nuclear energy, property of rural land and activities near international borders.

Anti-Corruption legislation in Brazil

The largest legal development that will affect businesses in Brazil is the adoption of anti-corruption laws and regulations. These laws were created in response to protests over the growing amount of corruption in Brazil. The new regulations will hold companies liable for acts of corruption and forces them to create complicate programmes.

eSocial Brazil

The Brazilian government's project to unify the sending of employer and employee data is called eSocial, a digital bookkeeping tax, social security and labor obligations tool. eSocial puts all of the labor and social security obligations into one document. Reporting on eSocial becomes mandatory for...