Checklist – How to incorporate a Brazilian subsidiary

To successfully incorporate a Brazilian subsidiary, a foreign entrepreneur has to comply with a list of strategic and, mostly, bureaucratic obligations. In this article we summarized the main To DOs.

Part 1 – Strategy & Foreign partners

1. Business Structure

In the beginning, it is important to define an effective tax plan for the new Brazilian subsidiary as well as its main business goals. These issues are relevant for the legal structure that shall govern the subsidiary.

2. Designation of a legal representative resident in Brazil of the foreign partner

Foreign companies and entrepreneurs wishing to incorporate a Brazilian company or acquiring equity participation in Brazilian companies or a consortium, must necessarily nominate a legal representative resident in Brazil with some specific powers.

3. Enrollment of the foreign partner before the Brazilian Federal Revenue and/or the Brazilian Central Bank

Also, as required by the Brazilian law, the foreign partner/investor must be enrolled before the Corporate Taxpayers’ Registry (CNPJ) or the Individuals Taxpayers’ Registry (CPF) of the Brazilian Federal Revenue, the revenue service of the Brazilian federal government.

4. Legalization, sworn translation and registration of foreign partner documents before the Civil Registry of Titles and Documents

Some documents of the foreign partner/investor will be required by the Brazilian authorities. They shall observe the formalities of validity.

Part 2 – Articles of Association

5. Drafting of the subsidiary’s articles of association

The articles of association, known as Contrato Social in Brazil, a document that defines the rights and responsibilities of each of the company’s partners shall be drafted.  In this regard, it is important to note that the Brazilian law imposes some legal requirements that must be observed.

6. Registration of the articles of association before the Board of Trade or the Civil Registry of Legal Entities

Once the articles of association are duly drafted and executed, so that the Brazilian company to become legally existent, such articles of association shall be registered before the appropriate authority, which varies according to the corporate purposes of the company.

7. Enrollment before the social security and, eventually, other local authorities (depends on the business)

Also, depending of the corporate purpose and the employees of the Brazilian company, the enrollment before the social security and other local authorities may be required. In case of healthcare companies, for example, the registration with the National Council of Medicine is required.

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