Checklist: Setting Up a Company in Brazil

Company registration in Brazil has become considerably faster in recent years. That said, the ongoing compliance burden remains significant, and several decisions must be made correctly from day one: they are costly to undo. Below are the key issues to consider before you begin.

1. Have you decided on the type of company you would like to register?

The two main corporate structures in Brazil are the limited liability company (sociedade limitada) and the corporation (sociedade anônima).

A sociedade limitada can have one or more shareholders and is the structure most commonly used by foreign investors establishing a Brazilian subsidiary, particularly where a single entity will hold all the equity. Sociedades anônimas require at least two shareholders, are subject to more prescriptive governance rules, and typically involve both an executive board and a non-executive board. Sociedades limitadas are faster and less expensive to register.

The best choice depends on governance needs, investor profile, capital-raising plans, regulatory exposure and intended exit. Other structures may be appropriate in specific cases.

2. Have you selected a person to make executive decisions in Brazil, and agreed on the terms of their appointment?

Non-residents (including foreign nationals) can be appointed as executive directors of Brazilian companies. There is therefore no requirement to appoint a permanent resident of Brazil to this role.

That said, there are many situations in which a physical presence is required or simply practical. This can be addressed by granting an individual a power of attorney with specific, limited executive powers. For practical purposes, a power of attorney issued before a Brazilian notary public tends to be the most effective form.

Once a candidate has been identified, it is strongly recommended that you obtain a background search on them. Brazil is a highly litigious country, and court searches and public databases can reveal valuable information about an individual’s litigation history and financial standing.

It is equally important to have a detailed agreement in place governing the terms of the individual’s appointment.

3. Have you chosen the shareholders for the Brazilian company, and considered the tax consequences of the holding structure?

None of the shareholders of Brazilian companies need to reside in Brazil or hold Brazilian citizenship, except in certain regulated sectors.

The choice of holding entities deserves careful analysis. Brazil does not have many double tax agreements in force. Furthermore, since 1 January 2026, Brazil has imposed a 10% withholding tax on dividends (Law 15,270/2025), a significant change that makes upfront structuring considerably more important than it was previously. The right holding structure can materially affect repatriation, treaty access, foreign tax credit treatment, controlled foreign company (“CFC”) analysis and transfer pricing outcomes.

There are Brazilian laws that hold shareholders liable for the company’s liabilities. However, since the Law of Economic Freedom came into force, shareholders have greater protection from liability. Registering one or more legal entities abroad that do not hold substantial assets to serve as vehicles for holding Brazilian shares is often a valid strategy to reduce the risks of operating a business in Brazil.

4. Have you selected a trustworthy resident of Brazil to hold a power of attorney for the foreign shareholders?

Non-resident shareholders of companies registered in Brazil must appoint a person to hold their power of attorney. The individual must permanently reside in Brazil and have at least the powers to:

• be served on behalf of the foreign shareholder; and
• “manage the entity’s assets and rights in Brazil” and represent it before the Federal Revenue Department.

While not mandatory by law, the attorney invariably needs the authority to act before the Central Bank, tax authorities and the Companies Registries (Boards of Trade). This is often a difficult issue from a corporate governance perspective, as the person has almost absolute power over the company. Strategies to manage this risk include:

• appointing a third party (often a lawyer) who is not involved in the day-to-day activities of the Brazilian company;
• appointing two individuals who can only exercise their powers jointly; and
• making it clear in the power of attorney document that the powers granted are the minimum required for compliance with Brazilian law.

A practical point that is frequently underestimated: any power of attorney signed abroad must be apostilled (for countries party to the Hague Convention) or legalised at a Brazilian consulate, and then translated by a sworn translator (tradutor juramentado) in Brazil before it can be used. This is often the longest step in the entire process and should be started as early as possible.

At times, foreign companies appoint their accountants to hold powers of attorney for non-resident shareholders. This is far from ideal, as it gives rise to obvious conflicts of interest, for instance where the shareholders are notified of tax non-compliance caused by those same accountants.

5. Have you selected the tax regime?

A Brazilian company must elect its tax regime either at incorporation or at the start of each tax year. The three main options, Simples Nacional, Lucro Presumido and Lucro Real, have fundamentally different rates, calculation bases and implications for the company’s overall tax burden. Electing the wrong regime can result in a materially higher tax burden for the entire year, with no ability to correct it mid-year. This decision is inseparable from the incorporation process and requires specialist advice before the company is registered.

6. Have you selected accountants registered in Brazil?

Complying with Brazilian law is time-consuming. All Brazilian companies with foreign shareholders must appoint a registered Brazilian accountant to prepare their books and make all required filings. Brazilian entities face recurring accounting, bookkeeping, tax, payroll and ancillary filing obligations from an early stage.

Finding an accountant who is technically sound, experienced in dealing with foreign-owned businesses, and genuinely fluent in English can be a challenge. It is recommended that you put in place an agreement properly drafted under Brazilian law with the chosen firm.

7. Have you decided on where the company will be registered and operate?

State Sales Tax (“ICMS”) and Municipal Services Tax (“ISS”) rules and calculation bases vary by state and municipality (click here for further information on Brazilian taxes). For businesses that sell goods from multiple locations, a branch office must be registered for each location.

The type of premises available to the company also depends on its activities. Service companies can generally use a virtual office, and municipal licensing is ordinarily straightforward. Trading or product companies that sell physical goods typically need a physical warehouse or commercial premises: some State Tax Authorities will refuse to issue a State Tax Registration (Inscrição Estadual) to a virtual address, which blocks the ability to issue invoices for goods entirely.

8. Have you considered the tax consequences in your home country?

Investing in Brazil involves more than analysing the country of destination; you will also need to review how Brazil’s rules interact with your home jurisdiction. These issues are likely to include:

• how the profits of the Brazilian entity will be treated at home, including whether there are deeming rules for controlled foreign companies (“CFCs”);
• how transfer pricing rules will affect your profits at home and in Brazil;
• whether the Brazilian operation will be treated as a permanent establishment;
• whether income from the Brazilian operations will be considered active or passive; and
• how Brazil’s taxes and contributions will be treated in your home country and the extent to which they can be used as tax credits, including the interaction of the new dividend withholding tax with any available treaty protections.

9. Have you registered the foreign capital with the Central Bank?

Any foreign capital used to capitalise a Brazilian company must be registered in the Central Bank’s electronic system (RDE-IED) through the BACEN platform. This step is not optional. Without proper registration of the foreign investment, the company will be unable to legally remit dividends or repatriate capital to investors abroad in the future. This registration should be addressed before any funds are transferred to Brazil.

10. Have you selected a physical address for the company’s registered office?

Brazilian companies generally need to have a registered office with a unique address. As noted above, the type of premises available depends on the company’s activities. Service companies can generally use a virtual office. Companies that sell goods typically need a dedicated physical address, and this affects both the availability of a State Tax Registration and the ability to issue goods invoices.

Companies that sell goods may lease their own warehouses or hold a lease with a third-party warehouse. The premises may be inspected by tax authorities to confirm they are suitable for the declared business activities.

11. Are you willing to disclose the full chain of control to the Brazilian authorities and banks?

Brazilian law requires foreign shareholders to disclose their ultimate beneficial owners (“UBOs”) to the Federal Revenue Department through the e-BEF system. Filing is required within 30 days of CNPJ registration and must be updated annually. Non-compliance can result in CNPJ suspension. See further here.

Brazilian banks will also conduct their own KYC and source-of-funds reviews when opening a corporate account, and will typically require full documentation of the ownership chain up to the ultimate individual beneficial owner. Banking strategy should be considered early and planned in conjunction with the BACEN RDE-IED registration.

12. Have you selected a suitable name for the Brazilian company?

Company names must include at least one word or expression indicating the company’s main activity. Foreign words can be used, but obscene or offensive expressions are not permitted. The selected legal structure must also appear in the company name, for instance “Ltda” or “Sociedade Limitada” for limited liability companies, and “Companhia”, “S.A.” or “Sociedade Anônima” for corporations.

13. Have you conducted a trademark search and considered filing a trademark application in Brazil?

Company-name clearance at the corporate registry and trademark protection are separate issues in Brazil. A name may be freely registrable at the Junta Comercial and still carry significant trademark risk. Both analyses should be completed before incorporation.

The National Institute for Industrial Property (“INPI”) maintains a unified, freely searchable database of all trademark applications and registrations. Brazilian law follows the first-to-file principle. It is therefore strongly recommended that you file trademark applications as soon as you determine that you may sell products or services in Brazil under your trade names. For further information, click here.

14. Have you obtained advice on what licences and permits will be required?

Different businesses and activities require different licences and permits to operate. Pharmaceuticals, chemicals, foodstuffs, agriculture and mining are well known for requiring multiple approvals from different authorities. Some licences can take several months to be granted. The licensing map should be completed at the structuring stage, not after incorporation.

15. Are you planning for the Brazilian company to import goods?

Not all Brazilian companies are authorised to import. Before importing, a company must register on the Foreign Trade Integrated System (“Siscomex”) / Radar system. Two tiers of registration are available:

• limited, which allows for a total of US$150,000 worth of goods to be imported every six months; and
• unlimited.

The Federal Revenue Department (“RFB”) analyses the company’s “financial capacity” to determine the applicable tier, based on the sum of corporate income tax (“IRPJ”), the Social Contribution on Net Profits (“CSLL”), PIS, COFINS and social security contributions paid in the previous five years. A new company may apply for an unlimited registration if it can establish that it has sufficient net assets to meet its import-related obligations.

In addition, different product-specific licences may be required, potentially from bodies including ANVISA, the Ministry of Agriculture (“MAPA”), the Ministry of Defence and the Foreign Trade Chamber (“Camex”). These requirements should be mapped before incorporation.

16. Have you decided on the bank that will hold the company’s account?

Opening a corporate bank account in Brazil can be the most document-heavy part of the process. Timelines vary significantly depending on the bank, ownership structure, industry, KYC profile and source-of-funds documentation, and can range from a few weeks to several months. This should be planned early and in conjunction with the BACEN RDE-IED registration, to ensure capital can flow into and out of Brazil correctly once the account is open.

Banks generally have separate registration processes for foreign exchange transactions. It is not unusual for companies to hold an account with a foreign exchange specialist bank, as larger banks tend to be very compliance-intensive for small and medium-sized enterprises.

Final words of warning

Seeking advice before proceeding with company registration will avoid many pitfalls and significantly greater costs down the track. The issues above are some of the most important, but every set-up is different. The right approach depends on your specific industry, home country, business model and commercial objectives.

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Last modified: 4 April 2026