subject: Waseem Saddique Provides An Essential Guide For Foreign Nationals Starting A Business In Brazil [print this page] Key Factors to Consider From the Outset Key Factors to Consider From the Outset
In contrast to other countries, its not viable for foreign nationals to acquire an existing business in Brazil and neither can a company be formed over the internet. Incorporating a company in Brazil needs to follow a due diligence process that will take up to 30 days to complete.
In keeping with Brazilian law the services of a Brazilian lawyer will be needed in order to incorporate a Brazilian company and in order to be named as a Director or Administrator of such a company, foreign nationals will require a permanent resident visa for Brazil.
Setting Up a Business in Brazil
Whether youre a sole trader or a large-scale business employing a high volume of staff, it is possible to start a business in Brazil. However, depending on the industry sector that your business falls into, certain restrictions may apply (one such example where restrictions apply is the publishing industry).
Restrictions are also applied depending on where you wish to set up your business which may affect issues surrounding Brazilian national security. Waseem Saddique advises that necessary checks be carried out to ensure no such restrictions apply to the business you wish to set up.
Visa Requirements for Business Start-Ups
A foreign national of Brazil does not require a Brazilian visa should they wish to become a shareholder within a Brazilian company. However, should a business investor employ a Brazilian resident to manage a company, but the investor would like to come to Brazil on occasion to monitor their investment, then a tourist or business visa will be a necessity.
If a foreign national wants to come to Brazil on a permanent basis in order to operate a business personally, then a permanent visa will be required. In order to be eligible for a permanent visa, a foreign investor will need to have finances in place totalling R$150,000 before being considered for permanent residency.
Company Types
Waseem Saddique comments: There are two basic company types in Brazil known as the Sociedade Limitada (LTDA) and the Sociedade Anonima (SA).
The Sociedade Limitada is the most common type of company in Brazil. It also has the distinct advantage of being simple, flexible and cost effective to operate. They are often governed by Contrato Social (Articles of Organisation) and business revenues are usually divided into quotas (shares). No minimum restrictions apply on capital requirements and these types of organisations are often managed by a Brazilian resident who has been appointed by shareholders. However, in order for a shareholder to maintain majority control of the company, they must own at least 75% of the shares.
The Sociedade Anonima type of company offers less flexibility and is considerably more expensive to run than the Limitada type. Business operations are required to be much more transparent, with yearly financial reports having to be released to the public. This type of company is governed by Estatutos (By-laws) and managed by a Board of Directors and a Fiscal Council.
