Before starting a business in Brazil, there are multiple factors you must keep in mind as a business owner. In this article, we elaborate on the reasons you should incorporate your business in Brazil, the Brazil company registration, and any additional compliance obligations.
Why should I register company in Brazil?
Setting up a business in Brazil would provide the following benefits to businesses:
- Brazil has the 7th largest population in 2021 as per the United States Census Bureau and therefore, businesses would have access to a large consumer market.
- Brazil has established strong diplomatic relationships with various countries and organisations. In fact, Brazil is a member of the World Trade Organisation (WTO), the Union of South American Nations, BRICS, and more.
- The Brazilian government has issued various business-friendly policies such as tax benefits, complete foreign ownership permitted, and additional incentives in order to attract foreign investment to the country. The Corporate tax rate in Brazil is 15% which is lower than the worldwide average corporate tax rate of 23.85% measured across 177 countries.
- The country has undertaken various initiatives to develop the Financial Technology (FinTech) industry.
- Brazil has a well-developed infrastructure in terms of transportation facilities, basic amenities, and more. According to the World Bank’s Logistics Perception Index of 2018, Brazil has a ranking of 56th out of 160 countries in terms of the quality of its infrastructure. The Brazil Ministry of Infrastructure has been developing the infrastructure even further.
How to register company in Brazil?
Understanding the incorporation process is imperative to ensure a smooth and hassle-free process.
Step 1: Planning and Strategising:
- Prior to the incorporation process, you must first decide on a suitable legal entity for your business.
- There are different types of companies in Brazil including:
- Limited Liability Company (Sociedada Limitada)
- Public Limited Company (Sociedade por Ações- SA)
- Individual Limited Liability Company (Eireli)
- Branch Office
- Representative Office
- Free Trade Zone Company
- Tetra Consultants will understand your business activities, requirements, and long-term business goals before recommending a suitable business entity for you.
- We will also inform you have the regulatory requirements of the chosen business entity, minimum paid-up share capital you must invest, and more.
Step 2: Meet the pre-registration requirements:
- You will need to have a registered office address for your business. Tetra Consultants will assist you in obtaining a suitable address as per the government regulations.
- Tetra Consultants will check for the availability of your preferred business name and reserve the same with the Brazil Junta Commercial (Board of Trade). The chosen trade name must meet additional regulations including displaying the core activity of the business.
- You are also required to appoint a local resident director for your business. You can use the nominee director service offered by Tetra Consultants.
Step 3: Prepare all the necessary documents:
- Tetra Consultants will then proceed to prepare all the required incorporation documents for you, including the Article of Incorporation (Contrato Social) and Business Plan.
- We will then get these documents notarised.
Step 4: Register your business:
- Once the documents are prepared, Tetra Consultants will proceed to register your business with either the Junta Commercial (Board of Trade) or the Registry of Civil Companies, which depends on the business activities.
- Once registration is completed, we will obtain a NIRE which is the Company Registration Identification Number that is required to conduct business in Brazil.
- Throughout this whole process, you will not be required to travel to Brazil.
- Tetra Consultants will courier all the incorporation documents including the Certificate of Incorporation, NIRE, and more to your preferred address.
Step 5: Register for Tax:
- Tetra Consultants will assist you in registering for tax with the Brazil Federal Revenue Service (Receita Federal) to obtain the CNPJ Certificate, which recognises the business as a taxpayer.
- You will also be required to register for tax at the Regional and State level. Tetra Consultants will assist you with the same by registering for tax with the Municipal Taxpayers’ Registry and the State Department of Finance.
Step 6: Obtain relevant business licenses:
- Depending on your business activities, you will be required to obtain necessary business licenses and permits from the Local Municipality or Regional Administration office.
- Tetra Consultants will advise on the licenses you will require to conduct the business activities in Brazil and apply for the same on your behalf.
Step 7: Register for Social Security
- The business must register for Social Security with the Brazilian Social Security (Programa de Integração Social- PIS). Tetra Consultants will assist you with this.
Step 8: Inform the Ministry of Labour
- Businesses are required to notify the Ministry of Labour about any additional hires or any employees who were let go. Tetra Consultants will help you in this endeavour.
Step 9: Open a corporate bank account
- It is compulsory for businesses set up in Brazil to open a corporate bank account.
- Tetra Consultants will take advantage of its extensive banking network and assist the business in opening a corporate bank account with a reputable bank.
- Some of the banks we have previously worked with include Banco do Brasil, Itaú Unibanco Holding, and more.
Step 10: Staying compliant with government regulations
- Once your business has been set up and your business is operational, you need to continue to ensure that you abide by the Brazilian government policies.
- Therefore, even after registration is completed, Tetra Consultants will continue to ensure your business’s compliance with the government regulations.
- If you wish to travel to Brazil and work there, we will also obtain a suitable work visa for you.
Now that you have understood the incorporation process in Brazil, you need to understand the timeline and cost. Tetra Consultants can complete the setting up of your business in Brazil within 12 weeks upon engagement and receipt of all the due diligence documents required by our team. We will then open your corporate bank account within 4 weeks of registration. All in all, your business will become operational within 16 weeks of engagement.
The total engagement fee that will be charged will depend on various factors including your business activities, choice of business entity, the services you require from us, and more. Our total fee will include the fees that must be paid to the government during the registration process. We will discuss the costs further in detail prior to the incorporation process.
Accounting and Tax Obligations
- The business must prepare its financial statements in a timely manner, file for annual corporate tax returns, and more with the relevant authorities. This is to ensure that businesses do not need to pay any additional penalties and fines.
- Businesses are also required to have their books audited by a certified auditor registered with the Brazilian Securities and Exchange Commission.
- Businesses must also make timely tax payments in order to avoid penalties and fines.
With Tetra Consultants by your side, the incorporation process will be quick and straightforward. You can leave the registration of your business to us and focus your time and energy on conducting your business. Our comprehensive service package includes planning and strategizing with our clients to select a suitable business entity, completing the incorporation process, opening a corporate bank account, ensuring the business’s compliance with the government regulations, and more as per the requirements of the business.
Contact us now to know more about the Brazil incorporation process and our dedicated and experienced team will revert within 24 hours.