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Incorporation

Setting up a company in Brazil

When setting up a company you may want to consider these factors:

  1. Business factors:

    Such as:

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. Language:

    Most authorities such as the Board of Trade have websites only in Portuguese and all processes must be done in Portuguese. There are no significant local dialects or other deviations from the official language, but a number of words and phrases differ from those used in Portugal. English is the foreign language most used by the business community.

  3. Location:

    Location is generally determined by key business factors. Regulations concerning various aspects of business (e.g., indirect tax rates and incentives) vary from state to state. Special federal programs reward investments in the poorer North and Northeast regions. Discussions with state development agencies are recommended.

  4. Business licenses:

    In addition to the business steps listed in this guide, the business may require additional permits, approvals, etc depending on sector and the location of the business.   In general companies should consult with the local municipality (e.g. city hall) to determine and obtain any respective operation permits.

  5. Bureaucracy and Lack of Centralisation:

    Although improvements have been made over recent years, some areas still lack connection with federal authorities, making centralised registering processes lacking in some parts. This means that registration processes and requirements may vary, and require additional legwork depending upon the region established. In general, these problems are compounded by bureaucratic issues.

    Excessive delays and the multitudes of various documents required by different bodies can cause days spent on the registering process to begin numbering over 100 days. As a result, while Brazil has been seen as an attractive investment for many companies, starting a company in Brazil is a demanding process that requires extra focus, money and patience.

  6. Complex Tax System:

    Brazil is known for charging a high tax burden for citizens and companies. There are numerous different kinds of taxes, such as this round-up of the 16 most common taxes in Brazil. To complicate matters further, they are governed at federal, state and municipal levels. As mentioned before, these systems are not always centralised and this will increase complexity of doing business in Brazil.

Your Options

The Federative Republic of Brazil is Latin America’s largest economy. It counts for almost half of the entire South American continent, being only slightly smaller than the landmass of the USA, and borders nearly all South American countries except Chile and Ecuador. Brazil’s largest state is São Paulo, with roughly 42 million inhabitants, and the city is considered the financial capital of Brazil.

Population                           202,000,000

Capital                                   Brasilia

Official Language                Portuguese

Time Zone                            UTC-5

Calling Code                         +55

Currency                               Real (R$) (International code: BRL)

USD$1 = approximately 3.28 BRL

Nominal GDP                        $2,247 trillion ($11,281 per capita)

Internet Domain                 .br

Despite economic growth slowing during recent year due to reduced demand for Brazilian exports in Europe and Asia and modest consumer demand from Brazil’s large middle class. By 2020, Brazil is still projected to be the fifth-largest consumer market in the world, ahead of France and the United Kingdom.

There are several market challenges to consider when doing business in Brazil. Doing business in Brazil requires intimate knowledge of the local environment, including both the direct as well as the indirect costs of doing business in Brazil (referred to as “Custo Brasil”). Such costs are often related to distribution, government procedures, employee benefits, environmental laws, and a complex tax structure. Logistics pose a particular challenge, given the lack of sufficient infrastructure to keep up with nearly a decade of economic expansion.

There are three types of business forms available to foreign companies in Brazil.  Each of these business forms has distinct advantages and disadvantages, as well as a differing scope of business activities, registration requirements and minimum capital requirements.  In most cases it will depend on the degree of commitment a company has to Brazil and the planned business activity.

A foreign company may establish itself in Brazil either through a branch, representative office or a subsidiary. Corporations are similar in form to both US and European corporations. Limitadas are similar in form to European limited liability companies (such as French SARLs and German GmbHs).

Subsidiary Company

Subsidiaries, which are Brazilian companies established under Brazilian law, represent a more straightforward approach to establishing a presence in Brazil. Although various types of companies exist under Brazilian law, the two most frequently used are the Limited Liability Company (Sociedade Limitada) and the Corporation (Sociedade por Ações – SA). A new type of company having a single member and known as the single-member or individual limited liability company (EIRELI) also became available for individuals since January 2012.[1]

A.  Requirements/Restrictions

A Limitada requires at least two shareholders, also known as “quotaholders”, whether or not Brazilian resident individuals or corporate entities. The quotaholders may incorporate a Limitada by executing a “Contrato Social” (Articles of Association) and comply with registration requirements of the local applicable registry in which the registered office of the company is to be located (either the Commercial Registry – or Junta Comercial – for business companies, and the Registry for Corporate Entities – Registro de Pessoas Jurídicas- for non-business companies).[2]

The Limitada must be managed by at least one member resident in Brazil (whether quotaholder or not), appointed by the quotaholders in the Articles of Association or in a separate corporate document. Decisions are taken as set out in the Articles of Association.

The Limitada is required to produce annual accounts which must be approved by its quotaholders at an Annual Quotaholders’ Meeting. The Minutes as well as the company’s Articles of Association are required to be publicly filed at the Commercial Registry.

B.  Advantages/Disadvantages

Limitada is the most common form of company in Brazil. It is also the simplest, most flexible and inexpensive type of company to operate, while the Sociedade Anônima (SA) is not as flexible and is considerably more expensive to operate.[3] A limitada is a useful corporate form for businesses with few owners and no intention to raise public funds.[4]

In the Limitada company form, members are liable only up to the value of the quotas for which they have subscribed. However, until the capital of the company is fully paid up, their liability extends to the entire capital of the company.[5]

While nonresidents can be members, there are a few additional obligations for them. A nonresident quota holder must still obtain a tax identification number from the Brazilian Internal Revenue Services (called CNPJ or CPF), and also grant a power of attorney to a Brazilian citizen or resident (likely an appointed accountant or lawyer).[6] Until the full capital is paid in, the quota holders are jointly and severally liable for the total capital subscribed.

The Limited Liability Companies with assets greater than BRL 240 million or turnover greater than BRL 300 million are called “large companies” and must follow the rules of the Corporations regarding to the preparation of their financial statements. Also, large companies shall have their financial statements audited by independent auditors.[7]

C.  Registration Steps

In general, entities that perform business activities are considered ‘sociedades empresárias’.  Regardless of the type of legal entity adopted or their type of activity (services, sales or manufacturing), sociedades empresárias must be registered with Trade Boards (‘Juntas Comerciais’), federal tax authorities, state tax authorities (depending on the activities to be performed), municipal tax authorities and the social security system.

If the subsidiary company later opens more branches elsewhere in Brazil, separate registrations are required for each branch established.

In Brazil, companies must be registered at the federal, municipal, and state levels. There is evidence of synchronization between these different levels, but it will depend on the particular region and some cases will require separate and independently performed registrations at each level. While generally areas conform to standards set out by federal law, requirements and procedures may vary from state to state. Registration can be time-consuming and bureaucratic process.

1.  Appoint a Representative

A company requires at least one manager to be a permanent resident of Brazil (they do not have to be a citizen), who has express power to act on behalf of the company. The representative must have the power to deal with all matters, and receive legal and official documents, including judicial summonses, on behalf of the parent company. This must be formally decided upon before the company can apply for approval for a branch office.

Time: n/a

Cost: n/a

2.  Check Company Name

It is not required for a company to reserve a name before incorporating in Brazil. However it is recommended to check first if the company name exists in the state(s) to avoid problems.

Most states provide this service online, and it generally takes one hour and is free. For a federal check, a “request for extension” must be submitted to the Board of Trade (Junta Commercial). It is recommended to have search for three potential names which can then all be proposed when registering the company.

Note: A company name must make reference to the core business of the company. For example, this means that the company name may not be simply “XYZ do Brasil Ltda”, but must be “XYZ do Brasil Information Technology Equipment Ltda”.

In Sao Paulo, the company name can be checked with JUCERJA at http://www.jucerja.rj.gov.br/.

Time: instant (online)

Cost: BRL 0 (if wanting a printed copy, a fee of BRL9 per state, or BRL10 for a Federal check)

3.  Establish an Office

Similar to other steps, there is some convolution over the order and prerequisite requirements of registration steps. For offices, in some cases it is said a company address is needed to incorporate, suggesting the office should be established first, but in other cases the company must incorporate first to obtain a tax number before it is allowed to establish an office. Apparently a common practice is to initially register a virtual office on the Articles of Association, incorporate, and establish an office and change the address after incorporating.

There is no specific office registration process required at this point, and instead it will depend on finding and establishing a lease agreement, virtual office agreement, etc before filing the incorporation documents.

Time: n/a

Cost: n/a

4.  Register Company at Board of Trade

After preparing and notarising incorporating documents, the first main step of incorporating a subsidiary is to register the incorporation documents at the federal level. This involves filing the company’s corporate documents (articles of association) with either the Board of Trade (Junta Comercial) or with the Registry of Civil Companies, depending on the company activities. This process will supply the business with an identification number (NIRE). In most cases, federal tax (CNPJ) and social security (INSS) registration can also be done within the Board of Trade, as these are also federal bodies.

The Board of Trade is the governmental body responsible for the registration of all business activities, and can usually handle a number of different registrations in one place. There is a Board of Trade for each of state and are governed by the National Department of Business Registration (DNRC), and the Brazilian Ministry of Development, Industry and Foreign Trade. Prices and terms of the registration at Junta Comercial vary from state to state. For this, the company will need to consult the Board of Trade of the state where the company is located.

For example, in the State of São Paulo the company can fill in the forms online at www.jucesp.fazenda.sp.gov.br, to be registered directly with the Board of Trade. In addition to the corporate documents, identification documents of the directors will be required. Nonresident directors may need to acquire a Brazilian personal tax number as well.

Special companies can be used that provide expedited filing and approval services. For example, in São Paulo you can register with either the Sindicato da Micro e Pequena Indústria de São Paulo (SIMPI) at www.simpi.com.br or Associação Comercial de São Paulo (ACSP) at www.jucespacsp.com.br to take advantage of expedited registration with the Board of Trade of the State of São Paulo. For this service, an extra charge of BRL50 is applicable, and registration will be finished within 24 hours.

As part of this process, the company should obtain a company number identification (NIRE), and can also usually process its registration for a tax number (CNPJ) and social security number (INSS) at the same time.

Time: 1-7 days (1 day for express service, 7 days otherwise)

Cost: BRL75 company registration fee (plus BRL50 expediting fee)

5.  Publish Financial Statements

To maintain its operating authorisation, the branch and foreign company must publish financial statements in an Official Gazette (Diário Oficial ) and a widely circulated newspaper.

The Diario Oficial usually charges per letter or word, a fee which is determined at the time of publication.

Time: 1 day

Cost: Varies

6.  Register for Federal Tax

A company must register as a taxpayer with the Federal Revenue Services (Receita Federal) in the National Register of Corporate Taxpayers (Cadastro Nacional da Pessoa Jurídica, CNPJ) and obtain a CNPJ Certificate. When placing the order with the CNPJ, you must specify the activities the company will be operating. This information will be used not only in taxation, but also in monitoring the activities of the company.[8]

In most major cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. For example, in São Paulo, federal registration of businesses to obtain a CNPJ number and registration with the state tax authorities is done simultaneously. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.

State tax authorities may schedule an official inspection of the company’s local head office before approving its registration into the CNPJ.

Time: 1 day

Cost: No charge

7.  Register for Social Security

The Brazilian government provides social security insurance (the INSS) to workers to cover circumstances such as unemployment and retirement. The scheme is funded by workers having contributions taken from part of their salaries.

In most cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.

A company must register with INSS even if it has no employees. To do so the company representative must contact a Social Security Agency to request registration within 30 days from commencement of trading.

Time: 1 day

Cost: No charge

8.  Approve Office Address

Depending on the company’s location, the office address must be approved by the municipality and the fire department. This may be required before being able to register for tax or business permits.  There is little information available on this topic (at least in English). The company’s representative or attorney will need to contact the municipal office (generally the town hall) and the fire department directly, and apply for approvals.

As stated before, it may be required to appoint a temporary or virtual office before incorporating, then locate and establish a proper office then update the address.

Time: 1-7 days (estimate)

Cost: No known charges

9.  Check and Apply for Municipal Business License/Permit

After obtaining a CNPJ, the company may need to apply for a business license (Alvará de Funcionamento) or operations permit (auto de licença de funcionamento) at the local municipality or regional administration office.

Historically a permit was required before the commencement of any business activities. However, since the application process can take a long time, and with introduction of new tax systems and the TFE (discussed later), the business can generally begin operating before officially receiving the permit.

Despite this, the process is still potentially convoluted. When and how this step is required in the overall process varies. For example in some the states, tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and tax registrations may be done simultaneously.

Generally the following documentation is required:

  • Completed municipality’s application form for permit
  • Company’s address (previously approved by the municipality and the fire department)
  • Copy of the CNPJ
  • Copy of the Articles of Association 

Time: 90 days

Cost: No charge

10.  Register for Municipal Tax(es)

Municipal tax registration is performed at the Municipal Taxpayers’ Registry (Secretaria Municipal de Finanças). Often when registering for federal tax, the municipal tax authorities are automatically notified, which suggests that in most cases this step can be performed automatically and simultaneously with the previous step.

An enrolment form CCM named the Cadastro de Contribuintes Mobiliários must be delivered to the municipality. In general the following documentation is requested:

  • DUC form, in triplicate
  • DCC form, one copy
  • Proof of address of the holders, certified copy or original
  • Certified copy of a document proving the right to use the business property, such as a leasing contract or deed of property
  • Number of the tax accountant’s registration
  • Proof of the ISS contributor to the service providers
  • Articles of Incorporation, one copy
  • Copy of the CNPJ
  • Copy of the business license (alvará de funcionamento)
  • ID and CPF of the holders

Although there is generally no ‘registration fee’, once the company has been registered it must pay an annual fee (taxa de fiscalização de estabelecimento taxa de fiscalização de estabelecimento, TFE) for the control and fiscalization of the compliance with municipal laws. The rate of the TFE is based on the company’s corporate purpose, which varies from BRL 141,82 to BRL 17.018,51.

In Sao Paulo, the municipal taxpayer enrollment is made through an electronic form that filled online on the website of the City Hall (www.prefeitura.sp.gov.br)

Note:  Additional registrations or requirements may be mandatory for companies in the certain sectors: trade, industry and transport services intercity and interstate, communication services and energy. There may be some bureaucratic burdens or complexities: for example industrial and pharmaceutical companies are required to obtain a license from the CETESB before applying with the CNPJ, however the CETESB requires the company to obtain the CNPJ certificate first.

Time: 5 days

Cost: BRL 425 (e.g for retailing business in Sao Paulo, will vary on company’s activities and per state)

11.  Register for State Tax(es)

State registration appears to be the final level of tax registration required. Although it is not clear and as with the previous steps it may be handled automatically in combination with the federal and/or municipal tax; some states may have an agreement with the Federal tax office (Receita Federal). However this may vary between state, and other factors. In addition to this complication, in some the states, state tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and state tax registration may be done simultaneously.

State registration is handled by the state Department of Finance (Secretaria Municipal de Finanças). The procedure varies from state to state, and may not be able to be done over the Internet.

There are various taxes in Brazil, and for state tax the major ones are ICMS and ISS.

ICMS is a state-based value-added tax levied on the import of products and certain transactions involving goods (including electricity), inter-municipal and inter-state transportation services and communication services. In general transactions between different states have a rate of 7% (when the purchaser is located in the states of the North, North-east and Center-west regions or in Espírito Santo state) or 12% (for purchases located in the Southeast and South regions). 18% is the standard rate in the state of São Paulo.

ISS (Imposto sobre Serviços) is a tax applied to services provided to a third party by a company or professional, and is paid by the service provider. The usual rate is around 5%.

There are many other forms of tax and consultation with the state tax and municipal authorities would be recommended.

Time: 1 day

Cost: No charge

12.  Apply for digital certification for e-invoice

The company will need to request permission to print invoices and authenticate the tax books. This can be done in the municipality of each city (Secretaria da Fazenda Estadual), by filing a specific form known as the AIDF, along with Book No. 51 and Book No. 57. However, some companies such as those in industry and trade may also need to register with the State Department of Finance (Secretaria Municipal de Finanças).

The company will then need to order official receipts/invoices (notas fiscais) with its CNPJ numbers from authorised printing companies.

Once the tax apparatus is registered, the company can start operating legally.

Time: 2-5 days

Cost: No charge for registration, R$450-600 for invoices

13.  Register Employees in Social Integration Program

The company must register with Brazilian Social Security (Programa de Integração Social, PIS), even before employing/if the company has no employees.

Time: 1 day (simultaneous with previous procedures)

Cost: No charge

14.  Open Retirement/Unemployment Fund

The company must open a special fund to make its unemployment contribution payments to a retirement fund (Fundo de Garantia por Tempo de Serviço, FGTS), with the Federal Saving Bank (Caixa Economica Federal).

To open the account, the company’s representative or attorney-in-fact must go to any local branch of the federal savings bank (Caixa Economica Federal) with information including:

  • A copy of the company’s taxpayer registry number (CNPJ certificate),
  • The adhesion form issued by the bank,
  • The list of employees,
  • The company’s articles of association or bylaws.

When registering an employee, the employer must complete a PIS/PASEP registry form (documento de cadastramento do trabalhador, DCT), to be delivered to the nominated bank responsible for the FGTS account.

Time: 1 day, (simultaneous with previous procedures)

Cost: No charge

15.  Notify the Ministry of Labor

The employer must inform the Ministry of Labor of any new hires or employees dismissals.  Such information shall be given to the local department of the Ministry of Labor (Delegacia Regional do Trabalho) by the seventh day of the month subsequent to the month of the event, by a written notice sent by postal mail or the Internet.

In addition, the company must submit annually to the Ministry of Labor the “annual report of social information” (relação annual de informações sociais, RAIS), which contains information on company employees (eg. name, salary and date of hiring).

Time: 1 day, (simultaneous with previous procedure)

Cost: no charge

16.  Registration with the Patronal Union and Employees Union

Companies are also required to register with an employees union.

These documents can generally be submitted to the unions through their websites. However, how to register may vary on the municipality and state, and the unions themselves. Each municipality and state has unions that represent the activities performed by the company.

Generally the documents required include:

  • Company registration form, Federal Register of Corporate Taxpayers,
  • Articles of association,
  • List of employees

Once a year, employees and employers must contribute to their representative employee unions and employer associations an amount equivalent to one day’s salary (regardless of whether they are affiliated to the union or association). The first payment is due in the month of the company’s registration, though the time may vary for each union.

Time: 5 days (simultaneous with previous procedures)

Cost: no charge

17.  Open Company Bank Account

There are several major national banks in Brazil, as well as various regional banks and a handful of international banks.   The requirements and procedure to open an account of course vary. However, in general, to open of a company bank account, documents required include:

  • Incorporation documents and registration certificate
  • Power of attorney document if applicable
  • CNPJ certificate 

Time: 1 day

Cost: No charge (may require minimum deposit)

Branch Office

Branches are subject to prior approval being obtained from the Federal Executive Branch of Brazil and are most commonly used by foreign banks and airline companies. Due to the extremely complex procedure involved, the opening of a branch in Brazil is not generally recommended.

A.  Requirements/Restrictions

The formation of a branch requires approval from the federal government and any amendments to the branch’s articles of incorporation must also be approved. The company must then develop its activities within twelve months of the authorisation. If not, the authorisation will automatically expire. Setting the business activities clearly in its articles of association is paramount – the government can cancel the authorisation if the company acts outside its established corporate purpose. The authorisations may be delegated such as through the ministry of development, industry and commerce.

The parent company must allocate capital to the branch office unless it is a company type such as an NGO.   The branch must share the same shareholders as its parent company and adopt the same corporate structure.

B.  Advantages/Disadvantages

The requirement for prior approval from the federal government by means of a presidential decree is a very lengthy process. In addition, as the federal government must also authorise any amendments to the branch’s articles of incorporation, this can delay things significantly. If the articles are not properly covering the intended business activities, there is theoretically a risk the branch will be shut down by the government for acting outside its established purpose.

Also, unlike a subsidiary, a branch is considered an extension of the foreign entity, as such the branch’s foreign parent company may have unlimited liability for the branch’s debts and obligations.

C.  Registration Steps

In general, entities that perform business activities are considered ‘sociedades empresárias’.  Regardless of the type of legal entity or type of activity (services, sales or manufacturing), sociedades empresárias must be registered with Trade Boards (‘Juntas Comerciais’), federal tax authorities, state tax authorities (depending on the activities to be performed), municipal tax authorities and the social security system

If the foreign parent later opens more branches elsewhere in Brazil, separate approvals and registrations are required for each branch established.

In Brazil, tax must be registered at the federal, municipal, and state levels. There is evidence of syncronisation between these different levels, but it will depend on the particular region and some cases will require separate and independently performed registrations at each level. While generally areas conform to standards set out by federal law, requirements and procedures may vary from state to state. Registration can be time-consuming and bureaucratic process.

1.  Appoint a Representative

The branch office will require a representative who is a resident of Brazil who has express power to act on behalf of the company. The representative must have the power to deal with all matters, and receive legal and official documents, including judicial summonses, on behalf of the parent company.  This must be formally decided upon before the company can apply for approval for a branch office.

Time: n/a

Cost: n/a

2.  Check Company Name

It is not required for a company to reserve a name before doing business in Brazil. However it is recommended to check first if the company name exists in the state(s) to avoid problems.

Most states provide this service online, and it generally takes one hour and is free. For a federal check, a “request for extension” must be submitted to the Board of Trade (Junta Commercial). It is recommended to have search for three potential names which can then all be proposed when registering the company.

Note:  A company name must make reference to the core business of the company. For example, this means that the company name may not be simply “XYZ do Brasil Ltda”, but must be “XYZ do Brasil Information Technology Equipment Ltda”.

In Sao Paulo, the company name can be checked with JUCERJA at http://www.jucerja.rj.gov.br/.

Time: instant (online)

Cost: BRL 0 (if wanting a printed copy, a fee of BRL9 per state, or BRL10 for a Federal check)

3.  Establish an Office

Similar to other steps, there is some convolution over the order and prerequisite requirements of registration steps. For offices, in some cases it is said a company address is needed to incorporate, suggesting the office should be established first, but in other cases the company must incorporate first to obtain a tax number before it is allowed to establish an office. Apparently a common practice is to initially register a virtual office on the Articles of Association, incorporate, and establish an office and change the address after incorporating.

There is no specific office registration process required at this point, and instead will depend on finding and establishing a lease agreement, virtual office agreement, etc before filing the incorporation documents.

Time: n/a

Cost: n/a

4.  Apply for Governmental Approval

In order to set up a branch in Brazil, foreign parent companies must first apply for governmental approval. This is usually done via the Federal Department of Trade Boards. If successful the company can receive a Presidential decree to give governmental approval for incorporation.

When applying the company should send documents including:

  • Evidence of its regular incorporation in its country of origin
  • The company’s articles of association or bylaws
  • List of members of all administrative bodies
  • The company decision which approves the opening of a branch in Brazil
  • The company decision which defines the share capital in Brazilian currency which the parent company assigns to its Brazilian operations, unless the parent company is not a business company
  • Proof that the company has appointed a representative in Brazil
  • Latest financial statements.

Time: 30-90 days (estimate)

Cost: No known charge

5.  File Company Documents with Department of Trade

Once approval has been given, the company must then file all documents with the Federal Department of Trade Boards and the tax authorities.  This involves filing the company’s corporate documents (articles of association) with either the Board of Trade (Junta Comercial) or with the Registry of Civil Companies, depending on the company activities. While not explicitly specified, it is presumed that these documents will need to be notarised by the appropriate notary office of the home country. This process will supply the business with an identification number (NIRE). In most cases, federal tax (CNPJ) and social security (INSS) registration can also be done within the Board of Trade, as these are also federal bodies.

The Board of Trade is the governmental body responsible for the registration of all business activities, and can usually handle a number of different registrations in one place. There is a Board of Trade for each of state and are governed by the National Department of Business Registration (DNRC), and the Brazilian Ministry of Development, Industry and Foreign Trade. Prices and terms of the registration at Junta Comercial vary from state to state. For this, the company will need to consult the Board of Trade of the state where the company is located.

For example, in the State of São Paulo the company can fill in the forms online at www.jucesp.fazenda.sp.gov.br, to be registered directly with the Board of Trade. In addition to the corporate documents, identification documents of the directors will be required. Nonresident directors may need to acquire a Brazilian personal tax number as well.

Special companies can be used that provide expedited filing and approval services. For example, in São Paulo you can register with either the Sindicato da Micro e Pequena Indústria de São Paulo (SIMPI) at www.simpi.com.br or Associação Comercial de São Paulo (ACSP) at www.jucespacsp.com.br to take advantage of expedited registration with the Board of Trade of the State of São Paulo. For this service, an extra charge of BRL50 is applicable, and registration will be finished within 24 hours.

As part of this process, the company should obtain a company number identification (NIRE), and can also usually process its registration for a tax number (CNPJ) and social security number (INSS) at the same time.

Time: 1/7 days (1 day for express service, 7 days otherwise)

Cost: BRL75 company registration fee (plus BRL50 expediting fee)

6.  Publish Financial Statements

To maintain its operating authorisation, the branch and foreign company must publish financial statements in an Official Gazette (Diário Oficial ) and a widely circulated newspaper.   The Diario Oficial usually charges per letter or word, a fee which is determined at the time of publication.

Time: 1 day

Cost: Varies

7.  Register for Federal Tax

In most cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. For example, in São Paulo, federal registration of businesses to obtain a CNPJ number and registration with the state tax authorities is done simultaneously. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.

A company must register as a taxpayer with the Federal Revenue Services (Receita Federal) in the National Register of Corporate Taxpayers (Cadastro Nacional da Pessoa Jurídica, CNPJ) and obtain a CNPJ Certificate. When placing the order with the CNPJ, you must specify the activities the company will be operating. This information will be used not only in taxation, but also in monitoring the activities of the company.[9]

State tax authorities may schedule an official inspection of the company’s local head office before approving its registration into the CNPJ.

Time: 1 day

Cost: No charge

8.  Register for Social Security

In most cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.  A company must register for social security (INSS) even if it has no employees.

Time: 1 day

Cost: No charge

9.  Approve Office Address

Depending on the company’s location, the office address must be approved by the municipality and the fire department. This may be required before being able to register for tax or business permits.

There is little information available on this topic (at least in English). The company’s representative or attorney will need to contact the municipal office (generally the town hall) and the fire department directly, and apply for approvals.

As stated before, it may be required to appoint a temporary or virtual office before incorporating, then locate and establish a proper office then update the address.

Time: 1-7 days (estimate)

Cost: No known charges

10.  Apply to Municipal Business License/Permit

After obtaining a CNPJ, you will need to apply for a business license (Alvará de Funcionamento) or operations permit (auto de licença de funcionamento) at the local municipality or regional administration office.

Historically a permit was required before the commencement of any business activities. However, since the application process can take a long time, and with introduction of new tax systems and the TFE (discussed later), the business can generally begin operating before officially receiving the permit. Despite this, the process is still potentially convoluted. When and how this step is required in the overall process varies. For example in some the states, tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and tax registrations may be done simultaneously.

Generally the following documentation is required:

  • Completed municipality’s application form for permit
  • Company’s address (previously approved by the municipality and the fire department)
  • Copy of the CNPJ
  • Copy of the Articles of Association

Time: 90 days

Cost: No charge

11.  Register for Municipal Tax

Municipal tax registration is performed at the Municipal Taxpayers’ Registry (Secretaria Municipal de Finanças). Often when registering for federal tax, the municipal tax authorities are automatically notified, which suggests that in most cases this step can be performed automatically and simultaneously with the previous step.

An enrollment form CCM named the Cadastro de Contribuintes Mobiliários must be delivered to the municipality. In general the following documentation is requested:

  • DUC form, in triplicate
  • DCC form, one copy
  • Proof of address of the holders, certified copy or original
  • Certified copy of a document proving the right to use the business property, such as a leasing contract or deed of property
  • Number of the tax accountant’s registration
  • Proof of the ISS contributor to the service providers
  • Articles of Incorporation, one copy
  • Copy of the CNPJ
  • Copy of the business license (alvará de funcionamento)
  • ID and CPF of the holders

Although there is generally no ‘registration fee’, once the company has been registered it must pay an annual fee (taxa de fiscalização de estabelecimento taxa de fiscalização de estabelecimento, TFE) for the control and fiscal compliance with municipal laws. The rate of the TFE is based on the company’s corporate purpose, which varies from BRL 141,82 to BRL 17.018,51.

In Sao Paulo, the municipal taxpayer enrollment is made through an electronic form that filled online on the website of the City Hall (www.prefeitura.sp.gov.br)

Note:  Additional registrations or requirements may be mandatory for companies in the certain sectors: trade, industry and transport services intercity and interstate, communication services and energy. There may be some bureaucratic burdens or complexities: for example industrial and pharmaceutical companies are required to obtain a license from the CETESB before applying with the CNPJ, however the CETESB requires the company to obtain the CNPJ certificate first.

Time: 5 days

Cost: BRL 425 (e.g for retailing business in Sao Paulo, will vary on company’s activities and per state)

12.  Register for State Tax

State registration is the final level of tax registration required. As with the previous steps it may be handled automatically in combination with the federal and/or municipal tax; some states may have an agreement with the Receita Federal. However, this may vary between states. In addition to this complication, in some the states, state tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and state tax registration may be done simultaneously.

There are various taxes in Brazil, and for state tax the major ones are ICMS and ISS.

ICMS is a state-based value-added tax levied on the import of products and certain transactions involving goods (including electricity), inter-municipal and inter-state transportation services and communication services. In general transactions between different states have a rate of 7% (when the purchaser is located in the states of the North, North-east and Center-west regions or in Espírito Santo state) or 12% (for purchases located in the Southeast and South regions). 18% is the standard rate in the state of São Paulo.

ISS (Imposto sobre Serviços) is a tax applied to services provided to a third party by a company or professional, and is paid by the service provider. The rate is usually around 5%.  However there are many other forms of tax and consultation with the state tax and municipal authorities would be recommended.

State registration is handled by the state Department of Finance (Secretaria Municipal de Finanças). The procedure varies from state to state, and may not be able to be done over the Internet.

Time: 1 day

Cost: No Charge

13.  Apply for digital certification for e-invoice

The company will need to request permission to print invoices and authenticate the tax books. This can be done in the municipality of each city (Secretaria da Fazenda Estadual), by filing a specific form known as the AIDF, along with Book No. 51 and Book No. 57. However, some companies such as those in industry and trade may also need to register with the State Department of Finance (Secretaria Municipal de Finanças).

The company will then need to order official receipts/invoices (notas fiscais) with its CNPJ numbers from authorised printing companies.   Once the tax apparatus is registered, the company can start operating legally.

Time: 2-5 days

Cost: No charge for registration, R$450-600 for invoices

14.  Register Employees in Social Integration Program

The company must register with Brazilian Social Security (Programa de Integração Social, PIS), even before employing/if the company has no employees.

Time: 1 day (simultaneous with previous procedures)

Cost: No charge

15.  Open Retirement/Unemployment Fund

The company must open a special fund to make its unemployment contribution payments to a retirement fund (Fundo de Garantia por Tempo de Serviço, FGTS), with the Federal Saving Bank (Caixa Economica Federal).

To open the account, the company’s representative or attorney-in-fact must go to any local branch of the federal savings bank (Caixa Economica Federal) with information including:

  • A copy of the company’s taxpayer registry number (CNPJ certificate),
  • The adhesion form issued by the bank,
  • The list of employees,
  • The company’s articles of association or bylaws.

When registering an employee, the employer must complete a PIS/PASEP registry form (documento de cadastramento do trabalhador, DCT), to be delivered to the nominated bank responsible for the FGTS account.

Time: 1 day, (simultaneous with previous procedures)

Cost: No charge

16.  Notify the Ministry of Labor

The employer must inform the Ministry of Labor of any new hires or employees dismissals.

Such information shall be given to the local department of the Ministry of Labor (Delegacia Regional do Trabalho) by the seventh day of the month subsequent to the month of the event, by a written notice sent by postal mail or the Internet.

In addition, the company must submit annually to the Ministry of Labor the “annual report of social information” (relação annual de informações sociais, RAIS), which contains information on company employees (eg. name, salary and date of hiring).

Time: 1 day, (simultaneous with procedure 7)

Cost: no charge

17.  Registration with the Patronal Union and Employees Union

If employing people the company branch is also required to register with an employees union.   These documents can generally be submitted to the unions through their websites. However, how to register may vary on the municipality and state, and the unions themselves. Each municipality and state has unions that represent the activities performed by the company.

Generally the documents required include:

  • Company registration form, Federal Register of Corporate Taxpayers,
  • Articles of association,
  • List of employees

Once a year, employees and employers must contribute to their representative employee unions and employer associations an amount equivalent to one day’s salary (regardless of whether they are affiliated to the union or association). The first payment is due in the month of the company’s registration, though the time may vary for each union.

Time: 5 days (simultaneous with previous procedures)

Cost: no charge

18.  Open Company Bank Account

There are several major national banks in Brazil, as well as various regional banks and a handful of international banks.  The requirements and procedure to open an account of course vary. However, in general, to open of a company bank account, documents required include:

  • Incorporation documents and registration certificate
  • Power of attorney document if applicable
  • CNPJ certificate

Time: 1 day

Cost: No charge (may require minimum deposit)

Representative Office

A representative office allows a foreign company to carry out a limited range of activities. Representative offices are generally used to carry out market research, establish relationships and formalise agreements potential customers and partners.

Despite the limitation there appears to be little difference between a branch office and a

A.  Requirements/Restrictions

Representative offices in Brazil of companies domiciled abroad are subject to Brazilian corporate taxation as independent entities.

B.  Advantages/Disadvantages

A representative office is limited in the activities it can do and generally is prohibited from commercial taxable activities.

Like a branch, a representative office is not a separate legal entity and seen as an extension of its parent company. This means that the parent company is liable for debts and obligations of the representative office.

A Brazilian representative office of a foreign company is subject to Brazilian tax on its worldwide income. Losses incurred on foreign transactions may not be used to offset income generated in Brazil; however, a foreign tax credit is available for corporate taxes paid abroad.

C.  Registration Steps

There is very little information available on the specifics of establishing a foreign representative office in Brazil. They do exist, as various companies have opened them. However there is no formal documentation on the registration process specific to branches. Rather, it is bundled with the process for a Branch, and despite the differences the steps appear to be the same, aside from additional taxes such as sales tax.

1.  Appoint a Representative

The branch office will require a representative who is a resident of Brazil who has express power to act on behalf of the company. The representative must have the power to deal with all matters, and receive legal and official documents, including judicial summonses, on behalf of the parent company.  This must be formally decided upon before the company can apply for approval for a branch office.

Time: n/a

Cost: n/a

2.  Establish an Office

If the representative office is establishing a physical location, this will need to be designated before applying for government approval. A common practice is to initially register a temporary office with the law firm or accounting firm, or hiring a virtual office service and changing it later.

There is no specific office registration process required at this point, and instead will depend on finding and establishing a lease agreement, virtual office agreement, etc before filing the incorporation documents.

Time: n/a

Cost: n/a

3.  Apply for Governmental Approval

In order to set up a representative office, as it is bundled with branch requirements, the foreign parent companies must first apply for governmental approval. This is usually done via the Federal Department of Trade Boards. If successful the company can receive a Presidential decree to give governmental approval for incorporation.

When applying the company should send documents including:

  • Evidence of its regular incorporation in its country of origin
  • The company’s articles of association or bylaws
  • List of members of all administrative bodies
  • The company decision which approves the opening of a branch in Brazil
  • The company decision which defines the share capital in Brazilian currency which the parent company assigns to its Brazilian operations, unless the parent company is not a business company
  • Proof that the company has appointed a representative in Brazil
  • Latest financial statements.

Time: 30-90 days (estimate)

Cost: No known charge

4.  File Company Documents with Department of Trade

Once approval has been given, the company must then file all documents with the Federal Department of Trade Boards and the tax authorities.  This involves filing the company’s corporate documents (articles of association) with either the Board of Trade (Junta Comercial) or with the Registry of Civil Companies, depending on the company activities. While not explicitly specified, it is presumed that these documents will need to be notarised by the appropriate notary office of the home country. This process will supply the business with an identification number (NIRE). In most cases, federal tax (CNPJ) and social security (INSS) registration can also be done within the Board of Trade, as these are also federal bodies.

The Board of Trade is the governmental body responsible for the registration of all business activities, and can usually handle a number of different registrations in one place. There is a Board of Trade for each of state and are governed by the National Department of Business Registration (DNRC), and the Brazilian Ministry of Development, Industry and Foreign Trade. Prices and terms of the registration at Junta Comercial vary from state to state. For this, the company will need to consult the Board of Trade of the state where the company is located.

For example, in the State of São Paulo the company can fill in the forms online at www.jucesp.fazenda.sp.gov.br, to be registered directly with the Board of Trade. In addition to the corporate documents, identification documents of the directors will be required. Nonresident directors may need to acquire a Brazilian personal tax number as well.

Special companies can be used that provide expedited filing and approval services. For example, in São Paulo you can register with either the Sindicato da Micro e Pequena Indústria de São Paulo (SIMPI) at www.simpi.com.br or Associação Comercial de São Paulo (ACSP) at www.jucespacsp.com.br to take advantage of expedited registration with the Board of Trade of the State of São Paulo. For this service, an extra charge of BRL50 is applicable, and registration will be finished within 24 hours.

As part of this process, the company should obtain a company number identification (NIRE), and can also usually process its registration for a tax number (CNPJ) and social security number (INSS) at the same time.

Time: 1-7 days (1 day for express service, 7 days otherwise)

Cost: BRL75 company registration fee (plus BRL50 expediting fee)

5.  Publish Financial Statements

To maintain its operating authorisation, the branch and foreign company must publish financial statements in an Official Gazette (Diário Oficial ) and a widely circulated newspaper.  The Diario Oficial usually charges per letter or word, a fee which is determined at the time of publication.

Time: 1 day

Cost:  Varies

6.  Register for Federal Tax

In most cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. For example, in São Paulo, federal registration of businesses to obtain a corporate tax (CNPJ) number and registration with the state tax authorities is done simultaneously. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.

A branch or subsidiary must register as a taxpayer with the Federal Revenue Services (Receita Federal) in the National Register of Corporate Taxpayers (Cadastro Nacional da Pessoa Jurídica, CNPJ) and obtain a CNPJ Certificate. Although a representative office does not engage in taxable activates in Brazil, a Brazilian representative office of a foreign company is subject to Brazilian tax on its worldwide income. Additionally, when registering with CNPJ, the company must specify the function of the office, information will be used not in monitoring the activities of the company.[10] Thus it is likely the representative office will still need to register for CNPJ.

State tax authorities may schedule an official inspection of the representative office before approving its CNPJ registration.

Time: 1 day

Cost: No charge

7.  Register for Social Security

In most cities, the registration process for tax and social security has been synchronised across federal and state authorities. This means that, as mentioned above, it generally will be covered simultaneously with the previous step. However, it may be different in some states. It is mainly listed here as a separate “step” for clarity purposes.  A company must register for social security (INSS) even if it has no employees.

Time: 1 day

Cost: No charge

8.  Approve Office Address

Depending on the company’s location, the office address must be approved by the municipality and the fire department. This may be required before being able to register for tax or business permits.

There is little information available on this topic (at least in English). The company’s representative or attorney will need to contact the municipal office (generally the town hall) and the fire department directly, and apply for approvals.

As stated before, it may be required to appoint a temporary or virtual office before incorporating, then locate and establish a proper office then update the address.

Time: 1-7 days (estimate)

Cost: No known charges

9.  Apply to Municipal Business License/Permit

After obtaining a CNPJ, you will need to apply for an business license (Alvará de Funcionamento) or operations permit (auto de licença de funcionamento) at the local municipality or regional administration office.

Historically a permit was required before the commencement of any business activities. However, since the application process can take a long time, and with introduction of new tax systems and the TFE (discussed later), the business can generally begin operating before officially receiving the permit. Despite this, the process is still potentially convoluted. When and how this step is required in the overall process varies. For example in some the states, tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and tax registrations may be done simultaneously.

Generally the following documentation is required:

  • Completed municipality’s application form for permit
  • Company’s address (previously approved by the municipality and the fire department)
  • Copy of the CNPJ
  • Copy of the Articles of Association

Time: 90 days

Cost: No charge

10.  Register for Municipal Tax

Municipal tax registration is performed at the Municipal Taxpayers’ Registry (Secretaria Municipal de Finanças). Often when registering for federal tax, the municipal tax authorities are automatically notified, which suggests that in most cases this step can be performed automatically and simultaneously with the previous step.

Although a representative office does not engage in taxable activates in Brazil, a Brazilian representative office of a foreign company is subject to Brazilian tax on its worldwide income. Thus it is likely the representative office will still need to register for CNPJ.

An enrollment form CCM named the Cadastro de Contribuintes Mobiliários must be delivered to the municipality. In general the following documentation is requested:

  • DUC form, in triplicate
  • DCC form, one copy
  • Proof of address of the holders, certified copy or original
  • Certified copy of a document proving the right to use the business property, such as a leasing contract or deed of property
  • Number of the tax accountant’s registration
  • Proof of the ISS contributor to the service providers
  • Articles of Incorporation, one copy
  • Copy of the CNPJ
  • Copy of the business license (alvará de funcionamento)
  • ID and CPF of the holders

Although there is generally no ‘registration fee’, once the company has been registered it must pay an annual fee (taxa de fiscalização de estabelecimento taxa de fiscalização de estabelecimento, TFE) for the control and fiscalization of the compliance with municipal laws. The rate of the TFE is based on the company’s corporate purpose, which varies from BRL 141,82 to BRL 17.018,51.

In Sao Paulo, the municipal taxpayer enrollment is made through an electronic form that filled online on the website of the City Hall (www.prefeitura.sp.gov.br)

Note:  Additional registrations or requirements may be mandatory for companies in the certain sectors: trade, industry and transport services intercity and interstate, communication services and energy. There may be some bureaucratic burdens or complexities: for example industrial and pharmaceutical companies are required to obtain a license from the CETESB before applying with the CNPJ, however the CETESB requires the company to obtain the CNPJ certificate first.

Time: 5 days

Cost: BRL 425 (e.g for retailing business in Sao Paulo, will vary on company’s activities and per state)

11.  Register for State Tax

State registration is the final level of tax registration required. As with the previous steps it may be handled automatically in combination with the federal and/or municipal tax; and some states may have an agreement with the Receita Federal. However, this may vary between states. In addition to this complication, in some the states, state tax registration may be required before obtaining a business license, in others it may be the other way around, and in others the business license and state tax registration may be done simultaneously.

There are various taxes in Brazil, and for state tax the major ones are ICMS and ISS.

ICMS is a state-based value-added tax levied on the import of products and certain transactions involving goods, and ISS (Imposto sobre Serviços) is a tax applied to services provided to a third party by a company or professional, and is paid by the service provider. The rate is usually around 5%. As a representative office would be limited from doing any such activities it is not clear if registration is still required. However as mentioned before, a Brazilian representative office of a foreign company is subject to Brazilian tax on its worldwide income. Whether this would extend to state-based goods and services taxes is unclear, and consultation with the state tax and municipal authorities would be recommended. It is possible the state tax office would still want the company to register for bureaucratic and monitoring purposes.

State registration is handled by the state Department of Finance (Secretaria Municipal de Finanças). The procedure varies from state to state, and may not be able to be done over the Internet.

Time: 1 day

Cost: No Charge

12.  Register Employees in Social Integration Program

The company must register with Brazilian Social Security (Programa de Integração Social, PIS), even before employing/if the company has no employees.

Time: 1 day (simultaneous with previous procedures)

Cost: No charge

13.  Open Retirement/Unemployment Fund

The company must open a special fund to make its unemployment contribution payments to a retirement fund (Fundo de Garantia por Tempo de Serviço, FGTS), with the Federal Saving Bank (Caixa Economica Federal).

To open the account, the company’s representative or attorney-in-fact must go to any local branch of the federal savings bank (Caixa Economica Federal) with information including:

  • A copy of the company’s taxpayer registry number (CNPJ certificate),
  • The adhesion form issued by the bank,
  • The list of employees,
  • The company’s articles of association or bylaws.

When registering an employee, the employer must complete a PIS/PASEP registry form (documento de cadastramento do trabalhador, DCT), to be delivered to the nominated bank responsible for the FGTS account.

Time: 1 day, (simultaneous with previous procedures)

Cost: No charge

14.  Notify the Ministry of Labor

The employer must inform the Ministry of Labor of any new hires or employees dismissals.  Such information shall be given to the local department of the Ministry of Labor (Delegacia Regional do Trabalho) by the seventh day of the month subsequent to the month of the event, by a written notice sent by postal mail or the Internet.

In addition, the company must submit annually to the Ministry of Labor the “annual report of social information” (relação annual de informações sociais, RAIS), which contains information on company employees (eg. name, salary and date of hiring).

Time: 1 day, (simultaneous with procedure 7)

Cost: no charge

15.  Registration with the Patronal Union and Employees Union

If employing people the company branch is also required to register with an employees union.   These documents can generally be submitted to the unions through their websites. However, how to register may vary on the municipality and state, and the unions themselves. Each municipality and state has unions that represent the activities performed by the company.

Generally the documents required include:

  • Company registration form, Federal Register of Corporate Taxpayers,
  • Articles of association,
  • List of employees

Once a year, employees and employers must contribute to their representative employee unions and employer associations an amount equivalent to one day’s salary (regardless of whether they are affiliated to the union or association). The first payment is due in the month of the company’s registration, though the time may vary for each union.

Time: 5 days (simultaneous with previous procedures)

Cost: no charge

16.  Open Company Bank Account

There are several major national banks in Brazil, as well as various regional banks and a handful of international banks.

The requirements and procedure to open an account of course vary. However, in general, to open of a company bank account, documents required include:

  • Incorporation documents and registration certificate
  • Power of attorney document if applicable
  • CNPJ certificate

Time: 1 day

Cost: No charge (may require minimum deposit)

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Brazil, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Brazil they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities.  A GEO Employer of Record solution is an attractive alternative where

– the company is looking to setup an office quickly

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Brazil

– the company needs help with tax, employment, immigration and payroll compliance in Brazil

The complexity of employment regulations in Brazil makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Brazil allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Brazil.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Brazil. Read more about outsourced employment through Shield GEO.

Summary of Setup Steps

Subsidiary Company Branch

Office

Representative

Office

Time Cost

(BRL)

Appoint Representative Yes Yes Yes n/a n/a
Check Company Name Yes Yes Yes instant 0-19
Establish an Office Yes Yes Yes n/a n/a
Apply for Government Approval Yes Yes 30-90 days 0
Register Company Yes Yes Yes 1-7 days 75-125
Publish Financial Statements Yes Yes Yes 1 day Varies
Register for Federal Tax Yes Yes Yes 1 day 0
Register for Social Security Yes Yes Yes 1 day 0
Approve Office Address Yes Yes Yes 1-7 days 0
Apply for Business License(s) Yes Yes Yes 90 days 0
Register for Municipal Tax(es) Yes Yes Yes 5 days 425
Register for State Tax(es) Yes Yes Yes 1 day 0
Certify Invoices Yes Yes 2-5 days 450-600
Register Employees in Social Integration Program Yes Yes Yes 1 day 0
Open Retirement/Unemployment Fund Yes Yes Yes 1 day 0
Notify Ministry of Labor Yes Yes Yes 1 day 0
Register with Unions Yes Yes Yes 5 days 0
Open Company Bank Account Yes Yes Yes 1 day 0
 

TOTALS:

*applications and processing times, not including internal document preparation, etc

 

Subsidiary

116-131

days

 

BRL

950-1100

 

Branch

146-221 days

 

BRL

950-1100

 

Rep. Office

146-221

days

 

BRL

200-500

 

Conclusion

The Limitada is the most common form of company in Brazil. It is also the simplest, most flexible and inexpensive type of company to operate. The opening of a branch in Brazil is not generally recommended due to the extremely complex procedure involved. There is no difference from a tax perspective between a foreign branch and a local subsidiary. Branches are only commonly used by foreign banks and airline companies. The representative office has similar issues to the branch, and is even rarer. It would seem only in special circumstances and otherwise restricted industries (such as banking and finance) would a company consider a representative office in Brazil.

APPENDIX: TERMINOLOGY

English Portuguese
Annual Report of Social Information relação annual de informações sociais
Articles of Association Artigos de Associação
Board of Trade Junta Comercial
Brazilian Federael Internal Revenue Services Receita Federal
Business license Alvará de Funcionamento
corporate revenue tax Imposto de Renda de Pessoa Jurídica, IRPJ
Corporation Sociedade por Ações, SA
Federal and state tax Secretaria da Receita Federal do Ministério da Fazenda, SRF/MF
Federal Official Gazette Diário Oficial da União
Federal Savings Bank Caixa Economica Federal
General Social Security Regime Regime Geral de Previdência Social
Limited Liability Company Sociedade Limitada
Ministry of Labor Cadastro Geral de empregados e desempregados, CAGED
Municipal Taxpayers’ Registry Secretaria Municipal de Finanças
National Institute of Social Security Instituto Nacional do Seguro Social (INSS).
National Register of Corporate Taxpayers Cadastro Nacional da Pessoa Jurídica, CNPJ
operations permit Auto de licença de funcionamento
Retirement Fund Fundo de Garantia por Tempo de Serviço, FGTS
social integration program Programa de Integração Social, PIS
Social welfare Previdência Social
state tax for goods and services. Imposto sobre Operações relativas à Circulação de Mercadorias e Prestação de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação, ICMS
tax applied to the services provided to a third party by a company or professional Imposto sobre Serviços, ISS
TFE Registry Taxa de Fiscalização de Estabelecimentos

 

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