How to Start a Business in Brazil as a Foreigner
Foreigners can legally start a business in Brazil, with the right to form a company, obtain a CNPJ (tax identification number), and operate in virtually all sectors of the economy. The process requires specific documentation, compliance with bureaucratic steps at the Junta Comercial (Board of Trade) and Federal Revenue Service, and attention to rules governing foreign capital participation.
This guide details every step foreigners need to follow to start a business in Brazil, from choosing the right entity type to opening a corporate bank account.
Can a Foreigner Open a Business in Brazil?
Yes. Brazilian law permits foreigners to incorporate companies in the country. The Civil Code (Law 10,406/2002) makes no distinction between nationals and foreigners for corporate formation purposes. The Migration Law (Law 13,445/2017) guarantees immigrants the right to engage in economic activity.
Sector-specific restrictions exist:
- Media and telecommunications: foreign participation limited to 30% of capital (art. 222, Federal Constitution)
- Civil aviation: voting capital must be at least 80% Brazilian-owned
- Healthcare: hospitals and clinics require a Brazilian technical director
- Mining and nuclear energy: specific constitutional restrictions
- Border areas: rural property acquisition in border zones requires INCRA approval
For all other sectors, foreigners have full freedom to establish and operate businesses in Brazil.
Entity Types Available to Foreigners
Brazil offers several corporate structures. The right choice depends on investment size, number of partners, and business objectives.
Limited Liability Company (LTDA)
The LTDA is Brazil’s most common entity type, representing over 90% of registered businesses:
- Partners: minimum 1 (SLU — Single-Member LLC) or more
- Share capital: no mandatory minimum (except for investor visa)
- Liability: limited to subscribed capital
- Governance: management defined in articles of association
- Cost: more affordable registration and maintenance
- Tax regime: eligible for Simples Nacional, Presumed Profit, or Actual Profit
The LTDA is ideal for small and medium enterprises, startups, and commerce and services operations. It is regulated by articles 1,052 to 1,087 of the Civil Code.
Corporation (SA — Sociedade Anônima)
The SA suits large investments and operations requiring capital market access:
- Shareholders: minimum 2 (closed SA) or 3+ directors and fiscal council (publicly traded SA)
- Share capital: divided into shares
- Liability: limited to share subscription price
- Governance: general assembly, board of directors, executive board
- Regulation: Corporate Law (Law 6,404/76) and CVM for publicly traded companies
- Cost: significantly higher registration and maintenance expenses
Single-Member LLC (SLU)
Created by the Economic Freedom Act (Law 13,874/2019), it allows foreigners to be sole owners:
- Partners: only 1 (individual or legal entity)
- Share capital: no minimum
- Liability: limited to share capital
- Advantage: operational simplicity without needing a Brazilian partner
Individual Microentrepreneur (MEI)
The MEI is not available to foreigners without permanent residency. Even with residency, restrictions apply:
- Annual revenue limited to R$ 81,000
- Only 1 employee allowed
- Activities restricted to approved CNAE list
- Cannot hold participation in another company as partner or holder
Individual Limited Liability Company (EIRELI)
The EIRELI was replaced by the SLU in 2021. Existing EIRELI companies continue operating, but new formations must adopt the SLU format.
Documentary Requirements for Foreigners
Required documentation varies based on the foreigner’s immigration status:
Foreigner Residing in Brazil
| Document | Notes |
|---|---|
| CPF | Mandatory for any corporate action |
| CRNM (National Migration Registration Card) | Proves legal residence |
| Proof of address | Utility bill or lease agreement |
| Birth or marriage certificate | Translated and apostilled |
Non-Resident Foreigner
| Document | Notes |
|---|---|
| Valid passport | Certified copy |
| CPF | Obtained at Brazilian consulate or through representative |
| Notarized power of attorney | For legal representative in Brazil |
| Apostille of the Hague | On foreign documents |
| Sworn translation | Of all documents in foreign language |
The power of attorney must grant specific powers for company incorporation, articles of association signing, and representation before government agencies.
Step-by-Step Process to Open a Company
1. Obtain a CPF
The CPF (Individual Taxpayer Registry) is the mandatory first step. Foreigners can obtain it:
- In Brazil: directly at the Federal Revenue Service or post offices
- Abroad: at Brazilian consulates or embassies
- Through a representative: via specific power of attorney
Average timeline: 5 to 15 business days.
2. Feasibility Check
Before registration, verify:
- Business name availability at the Junta Comercial
- Address feasibility for intended activity (zoning compliance)
- CNAE classification (National Economic Activity Code)
3. Draft the Articles of Association
The articles of association (contrato social) is the company’s founding document. It must contain:
- Partner identification (name, nationality, CPF, address)
- Corporate name and trade name
- Corporate purpose (business activities)
- Share capital and each partner’s participation
- Capital payment method
- Management structure and administrator powers
- Duration (definite or indefinite)
- Dispute resolution clause
For non-resident foreigners, the legal representative’s name and qualifications must be included.
4. Register at the Junta Comercial
The signed articles of association must be registered at the Junta Comercial in the state where the company will be headquartered:
- Registration fee: R$ 200 to R$ 500, depending on the state
- Timeline: 5 to 15 business days for approval
- NIRE: Company Registration Number, issued after registration
5. CNPJ Registration
After Junta Comercial registration, the company automatically receives its CNPJ (National Legal Entity Registry) from the Federal Revenue Service. The CNPJ is Brazil’s equivalent of the US EIN (Employer Identification Number).
6. State and Municipal Registrations
- State Registration (IE): mandatory for companies selling goods (ICMS)
- Municipal Registration (IM): mandatory for service providers (ISS)
- Operating Permit (Alvará): municipal license to operate at the address
7. Register Foreign Capital with the Central Bank
Foreign investment exceeding USD 100,000 must be registered in the Central Bank’s Foreign Capital System (SCE), per Resolution BCB No. 278/2022:
- RDE-IED: Electronic Declaratory Registration of Foreign Direct Investment
- Deadline: 30 days after the exchange operation
- Annual obligation: five-year census update declaration
Registration is essential for remitting profits, dividends, interest on equity, and repatriating the investment.
8. Open a Corporate Bank Account
The company needs a business bank account (conta PJ) to:
- Pay in share capital
- Receive payments and issue invoices
- Meet tax obligations
- Conduct foreign exchange operations
Documents required by banks: CNPJ, articles of association, partner documents, company address proof.
Estimated Costs for Company Formation
| Item | Estimated Cost |
|---|---|
| CPF obtainment | R$ 0 to R$ 100 |
| Sworn translation (per document) | R$ 200 to R$ 600 |
| Apostille (per document) | R$ 100 to R$ 300 |
| Notarized power of attorney | R$ 300 to R$ 800 |
| Articles of association (legal fees) | R$ 3,000 to R$ 8,000 |
| Junta Comercial registration | R$ 200 to R$ 500 |
| Digital certificate (e-CNPJ) | R$ 150 to R$ 400 |
| Operating permit | R$ 100 to R$ 500 |
| Accounting (monthly) | R$ 800 to R$ 3,000 |
| Estimated total | R$ 5,000 to R$ 15,000 |
Costs vary by state, operational complexity, and professional fees.
Tax Regime: Which One to Choose?
The tax regime choice directly impacts the company’s tax burden:
Simples Nacional
- Revenue: up to R$ 4.8 million/year
- Rate: 4% to 33%, depending on bracket and activity
- Advantage: unified tax payment in a single form (DAS)
- Restriction: companies with non-resident foreign partners cannot elect Simples Nacional
Presumed Profit (Lucro Presumido)
- Revenue: up to R$ 78 million/year
- Tax base: presumed profit margin based on activity (8% to 32%)
- Corporate income tax (IRPJ): 15% on presumed base + 10% surcharge on excess
- Social contribution (CSLL): 9% on presumed base
- PIS/COFINS: cumulative regime (3.65%)
Actual Profit (Lucro Real)
- Revenue: mandatory for revenue above R$ 78 million/year
- Tax base: adjusted accounting profit
- Advantage: allows deduction of operating expenses
- PIS/COFINS: non-cumulative regime (9.25% with credits)
For companies with foreign participation, Presumed Profit is generally the most advantageous regime for mid-sized operations.
Visas Related to Business Activity
Foreigners who wish to personally manage their company in Brazil need a residence authorization:
- Investor Visa: minimum investment of R$ 600,000 (reduced to R$ 150,000 for innovation activities)
- Administrator Visa: appointment as administrator of a company with significant share capital
- Work Visa: hired by the company as an employee (requires Ministry of Labor approval)
For more information on visas, see our guides on real estate law and business law.
Legal Obligations After Incorporation
Companies formed by foreigners must comply with:
- Accounting: regular bookkeeping (mandatory for Presumed and Actual Profit regimes)
- Ancillary obligations: SPED Accounting, SPED Fiscal, EFD-Contributions, DCTF, ECF
- Payroll: employee registration, eSocial, FGTS, employer INSS contributions
- IRPJ and CSLL: quarterly or annual assessment
- ISS/ICMS: depending on activity and location
- CBE declaration: Brazilian Capital Abroad (if applicable)
- RDE-IED update: annual or five-year Central Bank census
Non-compliance generates significant fines and may compromise the company’s regular status.
Common Mistakes Foreigners Should Avoid
- Not registering foreign capital with the Central Bank: prevents profit remittance and repatriation
- Choosing the wrong tax regime: creates excessive tax burden
- Not appointing a legal representative: mandatory for non-resident partners
- Ignoring ancillary obligations: automatic fines for omitted declarations
- Not formalizing a shareholder agreement: creates conflicts without resolution mechanisms
Conclusion
Starting a business in Brazil as a foreigner is a viable and increasingly streamlined process, especially with recent legislation like the Economic Freedom Act. Success depends on proper planning, correct entity type and tax regime selection, and strict compliance with legal obligations.
Specialized legal counsel in business law is essential to ensure regulatory compliance and tax optimization from the very start of operations.
For specific questions about incorporating a company with foreign capital, contact our team specializing in business law and foreign investment.
This article is for informational purposes only and does not constitute legal advice. Each case has specific circumstances that should be analyzed by a qualified attorney.
