How to Open a Company in Brazil as a Foreigner: A Step-by-Step Guide

Brazil allows foreign individuals and companies to establish business operations in the country. A foreign entrepreneur can participate in a Brazilian company, including as a shareholder of a Brazilian Limited Liability Company (LTDA), while an existing foreign company may also seek authorization to establish a branch or similar establishment in Brazil. The procedures, however, are different.

For a foreign individual who wants to establish a Brazilian company, the process generally involves choosing the business structure, defining the company's activities, checking the availability of the proposed business name and address, preparing the corporate documents, registering the company and obtaining its CNPJ.

1. Define the business structure and activity

The first step is to determine what the company will do in Brazil and how it will be structured.

The business activities must be classified according to their respective CNAE (National Classification of Economic Activities) codes. The chosen activities can affect the company's registration, taxation and licensing requirements.

The entrepreneur should also determine whether the company will be structured as an LTDA, Sociedade Anônima (S.A.) or another legally available structure.

For a foreign investor, it is also important to verify whether the intended activity is subject to restrictions on foreign participation. Brazilian corporate registration rules require the competent registry to verify applicable restrictions when foreigners participate in a company.

2. Determine how the foreign shareholder will be represented in Brazil

A foreign individual who resides outside Brazil can participate as a shareholder in a Brazilian company.

The DREI rules provide that a foreign individual residing abroad who is a shareholder or administrator may grant a power of attorney to a representative in Brazil. The same applies to a foreign legal entity that becomes a shareholder of a Brazilian company.

There is also an important practical detail: under the current rules, a shareholder residing abroad may be able to sign the company's articles of association electronically. If electronic signature is not possible, a power of attorney with specific powers may be required.

3. Prepare the foreign documents

Documents issued outside Brazil need to comply with Brazilian requirements before they can be used in the corporate registration process.

Depending on the country where the document was issued, this may involve:

• Apostille under the Hague Apostille Convention, where applicable;

• consular legalization when apostille rules do not apply;

• translation into Portuguese by a sworn translator when required.

The DREI specifically provides that foreign documents must comply with authentication requirements and that documents not written in Portuguese generally require a sworn translation.

This stage is particularly relevant when the shareholder is a foreign company, since documentation proving the company's incorporation and legal existence abroad may also be required.

4. Check the business name and address

Before registering the company, the entrepreneur must conduct the preliminary viability assessment.

The Redesim system uses this stage to verify whether the intended business activities can be carried out at the chosen address and whether the proposed business name is available.

This is an important step because the company's address must be compatible with the activities it intends to perform.

5. Prepare the Articles of Association

Once the structure, activities, shareholders and other corporate details have been defined, the company's Articles of Association (Contrato Social) can be prepared.

For an LTDA, the document establishes information such as the company's activities, capital, shareholders, ownership interests and management structure.

The DREI provides specific requirements and models for the registration of a Brazilian Limited Liability Company.

For a foreign shareholder, the documentation concerning representation and foreign documents must be included according to the applicable rules.

6. Apply for the CNPJ and register the company

After the viability stage, the entrepreneur proceeds with the CNPJ registration and corporate registration through the Redesim system.

The Brazilian government's process is organized around four main stages:

Viability → CNPJ → Company Registration → Tax Registration and Licensing. 

The Federal Revenue Service explains that, after the viability assessment, the applicant provides the company's information through the Redesim system. Depending on the structure and integration of the relevant authorities, the documentation is then submitted to the appropriate registration authority, such as the State Board of Trade.

7. Choose the applicable tax regime

After the company registration is approved, the company must complete the applicable tax regime election.

For an LTDA, the DREI's current guidance indicates that, after the corporate registration is approved, the company accesses the Tax Administration Module (MAT) through the state integrator to make the applicable tax election.

The appropriate tax treatment depends on the company's activities, revenue, structure and applicable legislation.

8. Complete state and municipal registrations

Depending on the company's activities, additional registrations may be required at the state or municipal level.

In many states, tax registrations can be generated automatically through the integrated registration system. Where they are not generated automatically, the company must follow the procedures established by the relevant tax authority.

9. Obtain the necessary licenses

Obtaining a CNPJ does not necessarily mean that the company can immediately begin operating.

The final stage of the business registration process is licensing.

Depending on the activity and location, the company may need authorizations related to areas such as health surveillance, environmental regulation, fire safety or other sector-specific requirements.

The Redesim system is used to process the applicable licensing requirements after the company's registration.

10. Consider immigration requirements separately

Corporate registration and immigration status are separate matters.

A foreigner can participate as a shareholder while residing abroad, subject to the applicable corporate requirements. However, if the person intends to live in Brazil and personally perform management or executive functions, additional immigration rules may apply.

Therefore, establishing a company in Brazil does not automatically grant a foreign shareholder the right to reside or work in Brazil.

What if the company already exists abroad?

The process is different when the investor is not creating a new Brazilian company but instead wants an existing foreign company to operate directly in Brazil.

A foreign company seeking to establish a branch, agency, subsidiary or establishment in Brazil generally needs to obtain prior authorization from the DREI, unless another government authority has specific legal competence over the matter.

The authorization process involves documentation concerning the foreign company's existence, its decision to establish the operation in Brazil, the activities it intends to conduct and its representation in the country.

Sources

• Department of Business Registration and Integration (DREI). Instruction No. 81 — Rules and General Guidelines for the Public Registry of Companies. Official source

• Department of Business Registration and Integration (DREI). How to Open a Limited Liability Company (LTDA). Official source

• Brazilian Federal Revenue Service. First Establishment Registration (CNPJ). Official source

• Department of Business Registration and Integration (DREI). Foreign Companies — Branches of Foreign Companies. Official source