Company Registration in Brazil in 2023-24
Brazil is strategically located between North and South America, making it a natural hub for trade and investment in the region. It is home to over 209 million people and has a Gross national income per capita of USD$ 9,140.
Brazil has signed a number of free trade agreements, including with the EU, Mercosur, and
China, providing additional opportunities for businesses to access international markets. The Brazilian government has implemented policies to support foreign investment and promote economic growth, including tax incentives and streamlined business registration processes.
In this article, we will be going to discuss more briefly the process to register a company in Brazil and the various documents that are required for company registration in Brazil. So, without any more delay, let’s dive deep into Brazilian company registration.
Procedure for Brazil Company Registration
The procedure for registering a company in Brazil involves several steps and can take several weeks to complete.
Choose a company name
The initial phase is to select a firm name and ensure that it is not already in use by another business.
Obtain a CNPJ number
A CNPJ number is required for all companies in Brazil. This number is issued by the Brazilian Federal Revenue Service and can be obtained by submitting an application online.
Register the articles of incorporation
Next, the articles of incorporation must be registered with the Brazilian Federal Revenue Service and the Commercial Board of the state where the company will be headquartered.
Obtain a business licence
A business licence is required for all companies in Brazil. The application process for this licence typically includes a visit to the municipal government office where the company will be headquartered.
Register for taxes
All companies in Brazil are required to register for taxes and obtain a tax ID number. This typically involves submitting an application to the Brazilian Federal Revenue Service.
Obtain other licences and permits
Relying on the kind of firm, additional licences and permits may be required. For example, companies engaged in certain industries such as food and beverage may need to obtain additional licences from the Ministry of Health.
Documents Required for Company Registration in Brazil
The documents expected for company registration in Brazil may vary depending on the type of company, location, and industry.
However, generally, the following documents are required:
- Articles of incorporation: These are the legal documents that establish the company and include details such as the company name, address, and authorised capital.
- CNPJ registration form: This is the form that is used to obtain a CNPJ number, which is required for all companies in Brazil.
- ID documents of the firm’s shareholders and directors: These may include passport copies, identity cards, and proof of address.
- Business licence application: This is the form that is used to apply for a business licence, which is required for all companies in Brazil.
- Tax registration form: This is the form that is used to register the company for taxes and obtain a tax ID number.
- Proof of address: This may include a lease agreement or utility bill for the company’s registered address.
- Other licences and permits: Depending on the type of company, additional licences and permits may be required.
- Bank statement and proof of funds: Some municipalities require proof of availability of funds to start the company operations.
It is important to note that additional documents may be required depending on the type of company.
Types of Business Entities for Company Registration in Brazil
There are several types of business entities that you can think of to register a company in Brazil, each with its own unusual factors and requirements.
The most common types of entities for company registration in Brazil include:
Limited Liability Company (LTDA)
This is the most popular type of business entity in Brazil, it has a minimum of one and a maximum of 20 shareholders, and the shareholders are not liable for the company’s debts beyond the capital they have invested.
Corporation (SA)
This type of entity is suitable for larger companies with multiple shareholders, the minimum share capital is R$ 1.000.000,00, and the shareholders have limited liability.
Individual Proprietorship (MEI)
This type of entity is suitable for small businesses, it is a one-person company, and the owner is personally liable for the company’s debts.
Branch office
Foreign companies can register a branch office in Brazil, which is an extension of the parent company, it is required to have a legal representative living in Brazil and the company will be subject to Brazilian laws and regulations.
Joint venture
A Joint Venture can be established between two or more companies in order to share risks, costs, and profits associated with a specific project or venture.
Each type of entity has its own specific requirements and advantages. You may learn more about the requirements by speaking with our team of professionals at Odint Consulting.
Eligibility for Brazil Company Registration
In order to register a company in Brazil, certain requirements must be met.
These requirements include:
- The firm name should be unique and not already in use by another company.
- The company’s shareholders and directors must have the legitimate capability to enter into a contract.
- There is a minimum share capital requirement for different types of companies, for example for a limited liability company, the minimum share capital is R$ 100,00.
- Relying on the business in which the firm operates, additional licenses and authorizations may be expected.
- The firm should possess a registered address within Brazil.
- All legal documents, such as the articles of incorporation, must be in Portuguese and in compliance with Brazilian laws and regulations.
- The company must be in compliance with all tax and accounting regulations.
It’s important to note that foreign nationals who wish to register for a company registration in Brazil need to have a valid visa, in order to be able to register the company.
Various Taxes on Brazil Company Registration
Companies registered in Brazil are subject to a variety of taxes, including:
- Corporate Income Tax (IRPJ): This is a federal tax on the firm’s net income. The basic corporate income tax rate is 15%
- Social Contribution on Net Profit (CSLL): This is a federal tax on the company’s net profit, the rate is 9%
- Value Added Tax (VAT) or ICMS: This is a state tax on the sale of goods and services. The standard rate is 18%.
- Payroll Tax (INSS): This is a federal tax on employee salaries, the rate is 20%.
- Property Tax (IPTU): This is a municipal tax on the value of the real estate, the rate varies by municipality.
- Social security tax (FGTS): This is a federal tax on employee salaries, the rate is 8%
Additionally, there are also taxes on imports and exports, taxes on financial operations, taxes on the registration of legal acts, etc.
It is important to note that these taxes may vary depending on the type of company, location, and industry, and some of them may have exemptions or reductions.
Cost to Register a Company in Brazil
The cost to register a company in Brazil can vary depending on several factors, such as the type of company, location, and industry.
However, generally, the costs for Brazil company registration include:
- Legal fees: These include the fees charged by a lawyer or accountant for preparing and filing the necessary documents and registrations.
- Government fees: These include the fees charged by the government for registering the company and obtaining licenses and permits.
- Share capital: There is a minimum share capital requirement for different types of companies, and you need to deposit this capital in a bank account to register the company.
- Notary fees: These include the fees charged by a notary public for preparing and registering legal documents.
The total cost of registering a company in Brazil can range from several thousand to tens of thousands of reais, depending on the type of company and location.
Advantages of Brazil Company Registration
There are several benefits of company registration in Brazil, including:
Large market
Brazil has a large domestic market with over 210 million consumers, making it an attractive destination for businesses looking to expand into Latin America.
Access to the regional market
Brazil is a member of the Mercosur, which is a trading bloc that includes Argentina, Uruguay, Paraguay, and Chile, this means that companies registered in Brazil can easily access this regional market.
Economic stability
Brazil has a stable economy, with a growing middle class and increasing consumer spending, providing opportunities for businesses in various sectors.
Strategic location
Brazil is strategically placed between North and South America, making it a natural hub for trade and investment in the region.
Natural resources
Brazil is rich in natural resources, including oil, minerals, and agricultural products, providing opportunities for businesses in the extractive industries and agribusiness.
Government support
The Brazilian government has implemented policies to support foreign investment and promote economic growth, including tax incentives and streamlined business registration processes.
Free trade agreements
Brazil has signed a number of free trade agreements, including with the EU, Mercosur, and China, providing additional opportunities for businesses to access international markets.
Legal and regulatory framework
Brazil has a legal and regulatory framework that is based on the civil law system, which provides a stable and predictable environment for businesses to operate in.
Conclusion
Brazil is a member of the Mercosur, which is a trading bloc that includes Argentina, Uruguay, Paraguay, and Chile, this means that companies registered in Brazil can easily access this regional market.
Eventually, registering a company in Brazil could be a time taking and expensive process. It’s recommended to hire a professional from Odint Consultancy to guide you through the process of company registration in Brazil.
FAQ’s
There are generally two options for foreigners who like to begin a business in Brazil. You can enter Brazil through a subsidiary or branch or by contacting third parties.
Tax fees in Bahia and Roraima can be as high as 2000-2500 BRl. It can cost around 3000-3500 BRL to start a business in Santa Catarina and Minas Gerais.
Brazil LLCs can be set up with at least 2 shareholders and one director. Directors can be of any nationality.
Brazil can also be considered a tax haven when the laws prohibit access to information regarding corporate ownership.
Brazilian citizens are accountable to tax on their global income. Non-residents are subject to tax exclusively at source on the Brazilian-sourced income.
