Nominee Director Service in Brazil

Nominee Director Service in Brazil

Tetra Consultants offers Nominee Director Service in Brazil for our international clients. Our full-service package includes Brazil company registration, nominee director services, provision of local company secretary and registered address, Brazil free trade zones registration, accounting and tax obligations, CNPJ registration number and corporate bank account opening.

Looking to expand your business into the Brazilian market? You may have encountered the terms “Brazil nominee director”, “Brazil representative director” or “Brazil resident director” when reading up on the Brazil incorporation process or requirements. This webpage will explain these concepts in detail in order for you to be able to understand them fully and make an informed decision for your Brazil business. 

What is a Brazil nominee director?

• A nominee director is a third-party qualified individual who is appointed to be a director of a certain company. They tend to be appointed in order to fulfil the requirements for a resident director in certain jurisdictions such as the United States where a local representative is compulsory for incorporation. 

• A resident director in Brazil is necessary for some entities such as the Limited Liability Company in Brazil and the Corporation. The details of the specific requirements for each company will be elaborated on below. 

• A nominee director in Brazil is hence useful in enabling your business to fulfil such requirements. As the search for a suitable candidate to take up the position of nominee director in Brazil is time-consuming and challenging, Tetra Consultants serves to bridge this gap by providing a cost-effective nominee and resident director service in Brazil.

Brazil Resident Director Requirements for Different Entities

Limited liability company (Sociedade Limitada):

• A limited liability company, which private limited company where liability is limited to share capital. Governed under the Law No. 10,406/2002, it is a common pick for foreign owners due to its liability protection. Owners of a Sociedade Limitada are not personally liable for the company’s debts and liabilities. 

• The residency requirements for a Sociedade Limitada are as follows:

• • 1 or more managers, who must all be resident in Brazil. Foreigners or non-citizens will have to be staying in Brazil with a permanent visa in order to be a manager. Tetra Consultants will assist in the appointment of a trusted local manager on your behalf if necessary.

• • A minimum of 1 local resident director, who will be governed under the Brazilian Corporations Law (Rule No. 6404/76).

Corporation (Sociedade Anônima)

• Suitable for larger companies and the only entity that can be a public company, corporations allow for structures that are more sophisticated. Different classes of shares can be issued, including non-voting shares or alternative fundraising structures. As such, they also follow more detailed regulations including disclosure rules and more formalities, in accordance with the principles of Law No. 6,404/1976. Each shareholder in a corporation is subjected to limited liability that is dependent on the issue price of shares held.

• The residency requirements for Corporations are as follows:

• At least 3 directors are needed.

• • Non-Brazilian citizens have to possess an attorney-in-fact and be resident in the country in order to be on the Board of Directors.

• • Only listed corporations and corporations with authorized capital must compulsorily have directors.

• At least 2 officers are needed.

• • Officers must all be Brazil residents.

• • Foreigners or non-citizens will have to be staying in Brazil with a permanent visa to be an officer.

How to qualify to be a Brazil nominee director?

• Individuals who wish to be directors of a Brazil business must be domiciled within the country. Otherwise, an attorney with powers will need to be elected to receive summonses. In addition, only individual persons and not entities can be a Brazil director.

• According to the local Corporations Law, to qualify for appointment as a new director of a Brazil business, a candidate must also fulfil the following criteria:

• • No criminal record of any kind

• • Have not received any legal penalty barring the individual to take up public office at any point in time

• • Must not be declared incapable by the Brazilian Securities Commission (for publicly-held corporations)

• • Hold a positive reputation

• • Does not currently hold an office role in a competitor business, or otherwise hold a conflict of interest, unless approved by shareholders

Advantages of appointing Nominee Director Service in Brazil

• There are several benefits to engaging our Brazil resident director services.

Meet residency requirements

• Firstly, you will be able to fulfil the resident director requirements for limited company and corporation set up, while saving time and energy. Tetra Consultants will source a qualified and trustworthy individual to fill the representative director Brazil role so that you can focus your time and resources on your business instead.

Privacy and confidentiality

• Having a nominee director will also protect the privacy and confidentiality of your business’ information, as having the identity and information of nominee directors and shareholders listed in the registry of companies instead of your own personal information can allow you to keep your own identity as a business owner or shareholder confidential, and maintain anonymity. 

Local representative for corporate bank account opening

• In addition, if you intend to open an account for your business with a Brazil bank, a local will be useful in acting as a Brazil representative director. If you are opening an account with a Brazil bank, Tetra Consultants will send our carefully selected Brazil director to be physically present at the branch on your behalf, at no extra charge. You will then not need to travel at any point, saving time and expenses and avoiding the need to apply for a business visa for entry into Brazil.

Bridge language barrier in Brazil

• Furthermore, having a local director will allow you to bridge the language barrier in Brazil, as many meetings and corporate or legal documents in the jurisdiction will be in the official language of Brazilian Portuguese. The representative will also be able to assist in translating documents to Portuguese or from Portuguese, such that the paperwork process will be greatly sped up.

Tax exemptions

• Members of Brazil entities that do not stay in Brazil nor have any other Brazil-sourced income can qualify for tax exemption or relief from Brazil tax obligations. As such, having a nominee director in Brazil can allow you and your Brazil entity to qualify for tax exemptions, allowing you to save tax costs.

• Tetra Consultants is able to provide the full suite of services for your Brazil company to remain compliant, ensuring you can save overhead costs by having one Brazil director to act as your local representative for all your business’ needs.

What is required in the appointment process of a nominee director in Brazil?

• The appointment of a new Brazil director needs shareholder approval and to follow Brazil Corporation Law. If the business’ shareholder agreement includes terms or conditions pertaining to the appointment of a director, the appointment of the director needs to legally comply with it and have the shareholder’s approval to be legally valid.

• To invest the director with his or her powers, a term of investiture (termo de posse) complying with the Corporation Law must also be signed.

• Furthermore, a non-resident would need an attorney-in-fact to appoint the Brazil resident, with the power-of-attorney based on litigation for businesses in the jurisdiction and must have a legal validity period of 3 years or more after the end of the director’s tenure. A Brazilian accountant or attorney is suitable to grant the power-of-attorney, and a service fee may need to be paid to the local as well as insurance protection or indemnity.

Risks of appointing a Nominee Director in Brazil

• Although there are many benefits to engaging nominee director service in Brazil, there are a few risks involved. 

• A common concern by clients is the possibility of a breach of confidentiality, as the nominee director may be able to sign documents containing information such as annual financial statements. The director may hence have access to your business’ sensitive information.

• In addition, as the nominee director in Brazil will usually have the same legal authority granted to executive directors of the company, there is a potential risk of the nominee interfering with business decisions and acting without the consent of the Ultimate Beneficial Owner.

• However, Tetra Consultants will take steps to mitigate this risk by setting out clear terms for the role and powers of the nominee director we appoint. Unless specifically requested, in the Nominee Director Agreements that we draft at the start of the engagement, the nominee director will only act based on the instructions from the Ultimate Beneficial Owner and will be prohibited from acting in his or her own self-interest or without your consent. He or she will strictly be prohibited from interfering with the day-to-day running of your business and having access to your company’s banking account and funds. 

• Hence, you will be guaranteed to maintain full control over your business at all times without having to worry about your authority or company’s integrity being compromised.

Risks undertaken by a nominee director in Brazil 

• Other than the risks incurred by the hiring company, the nominee director himself or herself may encounter certain risks in agreeing to take on the role. 

• Directors have fiduciary obligations to the Brazil business to fulfil. One of a Brazil director’s key legal duties under local law is that the director’s first duty is to serve the company’s interests instead of any other party’s interests. In the event that the director violates the fiduciary duty at any point, under local law, the director can be held liable to the business and any other parties who are affected. 

• However, rest assured that Tetra Consultants will take steps to mitigate this risk. Tetra Consultants will assist your entity to apply for the relevant Directors & Officers (D&O) insurance under the local authority Superintendência de Seguros Privados in charge of insurance. This will enable the nominee director to receive legal protection from unjust charges of mismanagement or non-compliance during the director’s tenure.

• In addition, Tetra Consultants will ensure that the nominee director appointed for your business will be a qualified and reliable individual who has gone through our stringent KYC checks and due diligence process. He or she will have the necessary expertise needed to monitor your business’ corporate activities closely to ensure strict compliance with all local regulations at all times, avoiding any legal offences. Hence, by engaging Tetra Consultants’ Brazil representative director service, you will be able to minimize such risks.

Why choose Tetra Consultants’ Brazil nominee director services?

• Unlike other firms that may charge hidden costs and deposits. Tetra Consultants highly values transparency. Our policy is to have all payment terms will be stated clearly in the appointment letter prior to the start of the engagement without any information withheld. We do not charge our clients with deposits nor have any hidden costs.

• By engaging Tetra Consultants’ nominee director service Brazil, you will be able to maintain full control over your business without your authority being undermined in any way. As per the terms of our Nominee Director Agreement, the nominee director we appoint will not be able to interfere in the daily operations and running of your business without consent, nor have access to your bank account funds.

• In addition, all our nominee director candidates will be subject to our strict KYC checks as well as possess the relevant qualifications and knowledge of the local Brazil regulations, such that he or she is able to monitor your business activities closely to ensure full compliance with all laws. 

How can Tetra Consultants provide Brazil nominee director service?

• Before the start of the engagement, Tetra Consultants’ compliance team will first shortlist trusted individuals who have relevant experience in corporate governance and annual reporting or filing, and have passed our enhanced due diligence checks. These nominees are usually either our in-house employees or long-term partners and are mostly professionals in the field of accounting or tax or law.

• Once engaged, Tetra Consultants will provide you with the KYC documents of the nominated Brazil director, including his or her updated resume, passport copy, proof of registered address and legal records proving lack of criminal activity.

• Our legal team will also draft a new nominee director agreement and statutory declaration to be signed by all parties involved. This is to guarantee that the company is completely and fully under your management and that you are indemnified as well. Unless requested specifically, the role of the nominee director appointed will not include playing an active part in your business, nor acting as a signatory to the bank.

• After the settlement of the nominee director fee, Tetra Consultants will proceed to register the Brazil company and appoint the Brazil nominee director with the Brazil Junta Comerciais (Board of Trade).

Documents required for Nominee Director Service in Brazil

• Due to the litigation and fiduciary risks that the Brazil resident director will ultimately be subjected to, Tetra Consultants’ compliance team will require certain documents from your business for due diligence checks:

• • Identity documents of the Ultimate Beneficial Owners (UBOs) and non-resident directors.

• • Documents of the parent company (in the event a corporate shareholder is appointed)

• • Nature of intended business activity

• • Dormant or active status of the company

Contact us to find out more about our Nominee Director Service in Brazil. Our team of expert professionals will revert within the next 24 hours.

FAQ

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