Company Formation and Consulting Services in Brazil

The structures a foreign investor will realistically consider are: Sociedade Limitada (Ltda): The limited liability company, chosen for the large majority of incorporations. Capital is divided into quotas, liability is limited to the subscribed capital once fully paid in, and there is no statutory minimum. Governance sits in a private document, the contrato social, giving the partners wide freedom over voting, profit splits and management powers. Sociedade Limitada Unipessoal (SLU): Since the 2019 economic freedom reform an Ltda may have a single quotaholder. It replaced the EIRELI, abolished in 2021 — existing EIRELIs were converted into single-member limitadas automatically. Sociedade Anonima (S.A.): The corporation under the 1976 Corporations Act. Capital is divided into shares, at least 10% of subscribed capital must be paid in cash on incorporation, and governance is rigid: statutory officers, shareholder meetings, formal minutes. It suits outside investors, share classes or an eventual listing. MEI: The micro-entrepreneur regime, capped at a low annual turnover (R$81,000 as of 2025) and restricted to residents — not available to foreign investors. For most inbound projects the Ltda wins: no minimum capital, cheap to run and fully recognised by banks, customs and the tax authorities.

Brazil places no restriction on 100% foreign ownership in most sectors, but imposes two personal requirements that surprise investors. Every partner needs a Brazilian tax number. A foreign individual holding quotas must obtain a CPF (Cadastro de Pessoas Fisicas); a foreign company holding quotas must itself be enrolled in the CNPJ as a non-resident investor. A CPF can be obtained without travelling to Brazil, through a consulate or the Receita Federal online channel, and is a prerequisite for any bank account or digital certificate. The company needs a resident administrator. The administrador named in the contrato social — the person who legally binds the company — must reside in Brazil. A non-resident shareholder cannot appoint themselves without first obtaining residency, so you either appoint a trusted local director or apply for an investor visa. Every non-resident partner must also grant a power of attorney to someone resident in Brazil with express powers to receive service of process. That instrument and the foreign shareholder's corporate documents must be notarised, apostilled abroad, translated by a tradutor publico juramentado and registered at a cartorio — the most common cause of delay.

Incorporation is sequential, and each step depends on the one before it. 1. Name clearance and activity codes. The name is checked for availability in the state of the registered seat and the activities mapped to CNAE codes. That choice is not cosmetic: it drives tax regime eligibility, licensing and municipal risk classification. 2. Drafting the contrato social. It states the corporate name, address, purpose, capital and its division into quotas, the identity and powers of the administrator, and the rules for transferring quotas. 3. Registration at the Junta Comercial. The commercial registry of the relevant state — JUCESP in Sao Paulo, JUCERJA in Rio de Janeiro, JUCEMG in Minas Gerais — registers the contrato social and issues the NIRE. Filings are electronic and signed with digital certificates. 4. CNPJ issuance by the Receita Federal. The CNPJ is the federal taxpayer number and the company's real identity document. Through the integrated Redesim network the registry filing and the CNPJ application travel together, so the number usually follows within days of approval. Only once the CNPJ exists can you open a bank account, register foreign capital, hire staff or issue an invoice.

The federal CNPJ is not the end of the road. Brazil taxes goods at state level and services at municipal level, so a company registers wherever it will actually transact. • Inscricao Estadual: Registration with the state finance department (SEFAZ) is required to sell, manufacture, import or transport goods, because those fall under ICMS, the state value-added tax. Without it you cannot issue a valid NF-e or, in practice, clear imports. • Inscricao Municipal: Registration with the city hall (prefeitura) is required for service providers, taxed by ISS, and enables the NFS-e service invoice. A company doing both needs both registrations. • Alvara de funcionamento: The municipal operating licence authorises activity at the premises. The 2019 economic freedom law created a low-risk fast track granting an automatic licence on filing with inspection afterwards; higher-risk activities still need prior clearance from the fire brigade (AVCB), health surveillance or environmental authorities. Because ICMS rates, ISS rates and licensing practice differ sharply between states and municipalities, where you seat the company is a commercial decision, not a formality.

This is the step foreign investors most often overlook, and the one with the most expensive consequences. Money sent from abroad into the equity of a Brazilian company must be declared to the Banco Central do Brasil as foreign direct investment. This historically ran through the RDE-IED module and now sits in the consolidated SCE-IED system. The declaration is filed electronically by the Brazilian company within 30 days of the funds arriving. Why it matters: registration is what creates your legal right to send money back out. The registered amount is the base against which you may: • Repatriate capital — the return of registered principal is not treated as taxable income. • Remit dividends abroad through the formal exchange market. • Register reinvested profits as additional foreign capital, enlarging the repatriable base. Unregistered capital becomes trapped in practice, and amounts repatriated above the registered base are exposed to capital gains tax. Dividends paid abroad were also long exempt from withholding; legislation enacted in late 2025 changed that, so confirm the current treatment before planning distributions. Registered investors file periodic statements with the Banco Central and update the registration whenever capital or ownership changes.

Minimum capital. An Ltda has no statutory minimum. You may incorporate with a nominal amount, though undercapitalisation reads poorly to banks, landlords and public tenders, and capital should be adequate for the activity carried on. An S.A. requires at least 10% of subscribed capital paid in cash at incorporation. The investor visa exception. The picture changes if a shareholder wants Brazilian residency through the investment. Under the rules in force as of 2025, a permanent investor residence permit for an individual generally requires at least R$500,000 invested in a Brazilian company. A reduced threshold of R$150,000 applies to innovation, research, technology and startup activities, subject to conditions, and a separate route exists for the appointed manager of a foreign group. The funds must genuinely be remitted and registered with the Banco Central. Bank account. Opening a corporate account requires the CNPJ card, the registered contrato social, proof of address, identification and CPF of the administrators, and full beneficial ownership disclosure up the chain. Compliance review of foreign-owned structures is thorough and onboarding often takes longer than the incorporation itself, so start it in parallel.

Brazilian companies elect a corporate tax regime, and the election is broadly binding for the calendar year. Simples Nacional. A unified regime for small businesses with revenue up to R$4.8 million a year, settled in one monthly payment (DAS) covering federal taxes, ICMS or ISS and payroll contributions, at progressive rates depending on the annex the activity falls into. Crucially, a company is excluded where a legal entity holds its capital, or where it is the Brazilian arm of a company headquartered abroad — ruling it out for most foreign-owned groups. Lucro Presumido. Available up to R$78 million of annual revenue. Taxable profit is deemed a fixed percentage of revenue — broadly 8% for goods and 32% for most services for IRPJ — with IRPJ at 15% plus a 10% surtax above the statutory threshold and CSLL at 9%. PIS and COFINS are cumulative at 3.65% with no input credits. It suits profitable, low-cost service businesses. Lucro Real. Tax on actual accounting profit, mandatory above R$78 million and for financial institutions. The combined IRPJ and CSLL headline burden is around 34%, but losses carry forward subject to the 30% annual offset cap and PIS and COFINS are non-cumulative at 9.25% with credits. It suits capital-intensive or low-margin operations. Brazil is also mid-way through a constitutional consumption tax reform: CBS and IBS are progressively replacing PIS, COFINS, ICMS and ISS across a multi-year transition. Model your indirect tax position for the transition, not only for today.

e-CNPJ. Almost nothing can be filed in Brazil without an ICP-Brasil digital certificate. The company obtains an e-CNPJ (type A1 as a software file valid one year, or A3 on a token valid up to three years) and the administrator an e-CPF. These sign registry filings, open the Receita Federal e-CAC portal and are required for electronic invoicing, the SPED bookkeeping environment and the eSocial payroll system. Timelines. With documents ready, registry approval and CNPJ issuance typically take one to three weeks; state and municipal registrations and the alvara add one to four weeks depending on municipality and risk class. A realistic end-to-end estimate for a foreign-owned Ltda is 60 to 90 days, with the apostille and sworn translation chain on the critical path. The steps are not individually hard, but they are numerous, state-specific and unforgiving of sequencing errors. Ongoing obligations: monthly bookkeeping, DCTFWeb and EFD-Contribuicoes filings, ICMS or ISS returns, eSocial payroll reporting, the annual ECD and ECF filings via SPED, and the Banco Central updates above. Engaging a Brazilian contador is not optional in practice — we provide that service through our professional team.