ABC / INCORPORATING IN BRAZIL

For this matter, Brazilian law sets forth that for the incorporation in Brazil, considering the existence of a foreign shareholder, the first step is the registration of such shareholder before the National Tax Payer Register, whether it is an individual or a legal entity.

Foreign companies or individual foreign shareholders of Brazilian companies must maintain a representative (attorney-in-fact) in Brazil with powers to receive service of process not only regarding Brazilian Courts, but also to represent before Brazilian Tax Authorities. The foreign company shall be required to present a Certificate of Incorporation of its country of origin or passport and a power of attorney. Note that any and all foreign documents to be valid in Brazil must be legalized by a Brazilian Consulate abroad and translated in Brazil by a sworn translator.

Therefore, the incorporation of a company in Brazil necessarily involves at least five phases: (i) the registration of the foreign shareholder before the Federal Tax Payer, (ii) the registration of the company's Articles of Association or By-laws before the State Board of Trade or Public Notary, (iii) the enrolment and registration of the company before the Federal Tax Payer Register, (iv) the enrolment and registration of the company before the local municipality, and (v) the enrolment and registration of the company before the State Tax Payer Register (only for commercial companies).

Further registrations before other public agencies may also be required according to the company’s purposes and activities.

The most common types of corporate forms that companies are organized under are: Limited Liability Company (Sociedade Limitada) and Joint Stock Corporation (Sociedade An?nima)

Main requirements applicable to both types of companies:

(i) shareholders (in principle, both of them can be non residents, provided that a Brazilian resident representative is appointed);
(ii) there is no minimum capital (except for bank, insurance and others);
(iii) officers must be Brazilian residents;
(iv) directors may be non Brazilian residents;
(v) mandatory annual shareholders? meeting;
(vi) mandatory publication of some of its corporate acts;
(vii) mandatory bookkeeping.


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