Consolidated legal update on coronavirus in Brazil

13 April 2020

coronavirus in Brazil

General situation:

As of 13 April 2020, around 22,720 Brazilians and Brazil residents have been infected with the Coronavirus, including 1,269 casualties. On 6 April 2020, 11,516 Brazilians and Brazil residents were infected and 506 had died of the Coronavirus. In order to curb down the disease’s transmission, a range of health measures have been implemented at federal, state and municipality level. In São Paulo state, Rio de Janeiro state and many other states, significant confinement rules were imposed in mid-March and are for now expected to be upheld at least until 22 April 2020. In view of the restrictive measures, many sectors of the Brazilian economy have come to a virtual standstill. The Brazilian government has in recent weeks and days enacted a range of emergency measures in order to assist Brazilian companies through these extraordinary times. This legal update aims to provide a consolidated overview of the most important labor, tax and corporate measures implemented by the Brazilian government in order to protect companies affected by the coronavirus. It also describes restrictions imposed by certain Brazilian authorities important for businesses on processing of files and attendance to the public.  

Labor Law:

On 22 March and 1 April, the Brazilian government published Provisional Measures, which resulted in the following immediately applicable modifications to the current Brazilian labor legislation: 

– Salary and working hour reduction (published on 1 April): Employers may reduce the salary and the working hours of employees by 25%, 50% or 70% for a period of up to 90 days. Employees whose salaries are reduced will be eligible for governmental financial assistance. Subject to exceptions, salary reductions require collective bargaining with the competent trade union.  

– Suspension of employment contracts (published on 1 April): Employers may suspend employment contracts for a period of up to 60 days, but employers with gross revenues that exceeded R$ 4.8 million in 2019 will have to provide monthly financial assistance to the suspended employees in the amount of 30% of their salaries. Employees whose contracts were suspended are also eligible for governmental financial assistance. Subject to exceptions, the suspension of employment contracts requires collective bargaining with the competent trade union.

– Anticipation of employee vacations (published on 22 March): The employer may oblige the employees to anticipate their vacations with 48 hours advance notice. Exceptionally, employees which have not yet acquired full vacation rights may also be asked to anticipate their vacations. Special deferral rules apply for vacation pay.

 Special home office rules (published on 22 March): The employer may oblige the employees (including interns and apprentices) to work from home, giving 48 hours advance notice. An agreement must be signed by the employer and the employee to define rules for the acquisition and maintenance of IT equipment and reimbursement of expenses incurred by the employee to enable him/her to work from home. Displacement related benefits such as transportation vouchers may be suspended during the home office period. Other employee benefits must be maintained, although certain modifications are permitted as long as agreed by, and not prejudicial to, the employees.

On 3 April, a further measure to protect jobs in Brazilian companies was published:

– Emergency Job Support Program: Companies with an annual gross income of more than R$ 360,000 and up to R$ 10,000,000 are eligible for credit lines which may be used exclusively to meet wage and salary costs for a period of 2 months. The credit lines are limited to R$ 2,090 per employee and bear interest at 3.75% per year. The first installment is due after 6 months of contracting the loan, repayment shall be made within 36 months.

Tax Law:

Payment of taxes: On 3 April, the Brazilian government decided to postpone the deadline for payment of the Social Security Contribution (INSS), the Social Integration Program (PIS) and Contribution for Social Security Financing (COFINS) which would be due in April and May 2020 to August and October 2020.

Previously, the government had already established rules to postpone the payment of the Severance Pay Fund (FGTS) contributions, with payment in six monthly installments, if duly notified by the taxpayer to the Federal Revenue Services in accordance with the applicable rules.

The payment of other relevant taxes was not postponed so far. As a consequence, some taxpayers have opted to unilaterally suspend a range of tax payments. This approach will typically result in collection proceedings, except if the taxpayer voluntarily discloses the situation to the tax authorities and pays all outstanding taxes with interest prior to collection proceedings being initiated. Other taxpayers have already filed lawsuits in court requesting the postponement of their tax obligations. Some of them obtained injunctive relief allowing them to postpone, for 90 days on average, the payment of federal, state and/or municipal taxes in view of the current extraordinary situation. The advantages and disadvantages of implementing any of these actions should be analyzed by interested taxpayers on a case-by-case.

Importation of medical products: In order to facilitate the importation of products used in the fight against the coronavirus, the Brazilian government has decided to temporarily eliminate import taxation on several medical products. The reduction applies to:

  • ethyl alcohol with alcohol content equal to or higher than 70%,
  • protective gloves and masks,
  • catheters,
  • needles,
  • thermometers and
  • resuscitation and respiratory therapy devices.

The reduction will remain in force until 30 September 2020. The government also stipulated that the import of these products shall be treated as a priority by the federal public administration agencies.

Corporate Law:

Postponement of ordinary shareholder meetings:

  • Brazilian limited companies and corporations  are required to hold their yearly ordinary shareholder meetings within the first four months of each year. In view of the current situation, the deadline for holding the ordinary shareholder meetings has now been extended to end of July 2020.
  • Any contractual provisions to the contrary (e.g., in shareholders’ agreements) shall be void.
  • Corporate mandates that were due to expire before 31 March 2020 are automatically extended until the new date of the ordinary shareholder meeting.
  • Shareholders may participate and vote remotely in the shareholder meetings.

Public agencies – suspension of services:

Due to the coronavirus pandemic, many public agencies in Brazil have temporarily limited or entirely suspended their operations. For São Paulo based companies, the following principal limitations apply:  

– São Paulo Trade Board (JUCESP): The attendance to the public has been suspended until 30 April 2020. In practical terms, this means that no shareholder resolutions or amendments to articles of associations of São Paulo based companies may be publicly registered in the meantime. However, the incorporation of new legal entities in São Paulo state remains possible through the electronic system of the Trade Board.

– Federal Revenue Services (Receita Federal): Until 29 May 2020, personal meetings are only possible upon appointment and exclusively in respect to “essential” services. Matters of less importance must be solved via virtual attendance. Deadlines for compliance with administrative proceedings are temporarily suspended.

– Brazilian Patent and Trademark Office (INPI): Attendance to the public has been suspended for an indefinite period of time. Deadlines for compliance with administrative proceedings have for now been suspended until 14 April 2020. The filing of applications for the registration of trademarks remains possible via the electronic system of the INPI.

São Paulo state court of justice and Federal court of justice: No personal meetings will be scheduled until 30 April, only remote assistance is granted. All legal proceedings are temporarily suspended.

– Notary Public’s Offices (Cartórios de Titulos e Documentos): Some offices have entirely suspended attendance to the public, others have significantly restricted working hours.

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The ILM Group team remains at your disposal in case of questions.

Fabian Peters (

Christoph Peinbauer (

Tamar Klein (

Tel: + 55 11 3142 9789

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