Learn all about business start-up in Brazil
With the largest territory and economy in the Latin America, Brazil is member of the Mercosul, group formed by Argentina, Brazil, Paraguay and Uruguay. Other countries are also collaborating members as Chile, Bolivia, Peru, Colombia and Ecuador.
Brazil’s economy is very diversified with towering companies in the agricultural, commodities, industrial and service segments. Its GDP is the top 9th in the world and it has the 6th largest population. In the individual side, Brazil has one of the biggest middle classes in the world, that trends to continue its expansion based on a solid democracy and regulatory institutions.
Regarding the taxation system, Brazilian tax rules allows independent taxing powers to the federal, state, and municipal governments to impose, regulate and collect taxes. Brazil imposes corporate and personal income tax on its residents, including Brazilian subsidiaries of foreign entities.
We conduct our work in an integrated and individualized way, and are involved in the entire accounting, tax and financial chain.
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How to Incorporate a Business in Brazil?
Despite the bureaucracy involved, to incorporate a business in Brazil you have to follow 3 basic steps summarized below. Count on us to help you and be supported by one of the most experienced companies in Brazil. Tax, Legal, Permits, Accounting, Payroll and Financial support is our business. Lotti e Araújo Law Firm is a collaborating company of Andersen Global in Brazil.
Business incorporation in Brazil in 3 steps:
1. To select the model of commercial entity
In Brazil you can choose between profitable and non-profitable kind of business and among several types of company:
- as Limited (Limitada / Ltda);
- Corporation (S.A.);
- Single Owned Entity (EIRELI);
- Single Entrepreneur (MEI);
- and few others.
So, once you have selected the most suitable for your business, it is time to go to the next step.
2. Register/File the articles of association
The articles of association of your company must be filed at the State commercial trade board in one of the 27 Brazilian States (each one has your own commercial trade board).
This register will trigger another required registration in the Brazilian Internal Revenue Services Department – IRS (RFB – Receita Federal Brasileira).
After that, you will obtain your CNPJ or Federal Tax Identification Number (Federal Tax ID Number), which will allow you to open a bank account and receive foreign investments.
3. Final Registers and Permits
Depending on the sector your company will operate and its nature of business (services, industry, retail, etc) it will be necessary to register your company in the State Revenue Department (Secretaria de Fazenda – SEFAZ) or Municipal ones (Prefeituras Municipais) to obtain its State and/or Municipal Tax Identification Numbers.
Additionally, permits will be needed depending on the goods or services your company will provide (food, healthy, education, financial, etc).
For instance, it is normal to need 4 of 5 different permissions to operate, as from the municipal firefighter, the sanitary regulation department, the environment state department, and so on.
On going operations: after your company is incorporated you will have to comply with the local tax, accounting, and payroll rules, so ongoing support is required.
Count on us to run your tax, accounting and payroll routines.
Note: An intermediate step between 1 and 2 above will be requested if a foreign company is one of the shareholders of the Brazilian company. If so, the registration of the foreign company in the Brazilian Central Bank and IRS is needed. It is a quick step (took less than one week) but need to be considered in your pipe line / timetable.