On 9 March 2017 the Central Bank of Brazil (“BACEN”) published Circular DC/BACEN 3,883/2018. This regulation amends two key BACEN regulations: Circular 3,689/2013 (which regulates foreign investments in Brazil and Brazilian investments abroad) and Circular 3,690/2013, (which regulates the classification of international forex transactions).
These changes are in line with a series of BACEN’s system updates aimed to modernise and simplify registrations. BACEN’s system for the registration of foreign capital in Brazil (Registro Declaratório Eletrônico, “RDE”) comprises four modules: (i) direct foreign investment (RDE-IED); (ii) portfolio (RDE-Portfolio); (iii) financial operations (RDE-ROF) and (iv) company registration (CADEMP). In 2017 a new system for RDE-IED was implemented together with new rules regarding the registration of foreign direct investment.
BACEN now is doing the same with RDE-ROF and the main changes brought about by the amending regulation are as follows:
- Novations of international loan contracts that do not amount to changes to the due dates for payments of the loans or the incurring of additional liability no longer need to be registered;
- Upon the Brazilian borrower filing for registration and receiving confirmation that the RDE-ROF application has been deemed as “prepared”, the party may commence receiving funds and making payments and service fees relating to the loan;
- The regulations expressly state that foreign loans will be registered automatically in the currency of the funds received by the borrower in Brazil (or in Brazilian reals, if the funds are received in Brazilian currency), and the currency of the loan will need to be registered on the system;
- For transactions other than the loans, the regulations now provide that they must be registered in the currency and with the terms set out in the contract, but separate registrations being made for deals with different currencies or on different terms, and these must be linked on the BACEN system;
- The fees charged by lenders are no longer required to be registered with the Central Bank (the Federal Revenue Department considers these to be services which must be registered in the SISCOSERV system and taxes on services will apply to them);
- The provisions of Circular 3,689/2013 with previously only applied to loans obtained directly, or via the issuing of debt securities, abroad by Brazilian residents (chapter III, section II, subsection I) now extend to debentures privately distributed within Brazil;
- Payments made towards the amortisation of the loan and for the fees charged by the lender may be made prior to the full registration on the Central Bank database;
- The registration status will be changed to “effected” once the funds are received from abroad. After that, changes to the registration will only be allowed in relation to the payment schedule, changes to the debtor by succession, corporate restructure or pursuant to a court order, changes to the creditor through the negotiation of credits between non-resident parties, contact details and “complimentary information”;
- New codes have also being introduced for the purposes of effecting the registrations. These are set out in the new Annex IX to Circular 3,690/2013.
It is positive to see BACEN modernising its systems. After many years of little regard being paid to BACEN’s systems, it appears that resources are finally being allocated to make the lives of those looking to do business in Brazil a little easier.
Last modified: March 19, 2018