ENTERING FOREIGN CAPITAL IN BRAZIL

In accordance with the Brazilian Shipping of Profits Act, Law 4.131/62, are foreign capitals the goods, financial resources, machinery and/or equipment entered in the country without payment, with the production of goods and services purpose.

There are two types of foreign investment in Brazil: Direct Foreign Investment and Investment in Portfolio. The first is an investment of long term, like the establishing of a new company, with the direct administration by a foreign person. The second is regarding international transactions referring foreign investments by asset managements and funds.

The flow of investments are reign by the Brazilian Shipping of Profits Act and are destined to create and grow of the productive capacity or acquisition of companies.

Foreign investors are every physical and legal person non-resident, or funds or other forms of collective investment with foreign residence. According the Resolution 3.373/2014 of the Central Bank of Brazil, before starting the operation the non-resident investor shall constitute representation, identify itself towards the Central Bank and obtain registration with the securities commission. After that, yet before starting, the foreign investor shall proceed the taxpayer registration at the Federal Revenue of Brazil.

Brazil has been celebrated various Investment Cooperation and Facilitation Agreements. The last decade was mark by economic growth, capital opening and strengthening of financial and juridical institutions. These agreements have the purpose of creating favorable conditions to promote investments between the signatory states. By this institution, it is possible to consolidate partnerships, by ensuring non-discriminatory treatment, avoiding direct expropriation, enabling loss compensation, ensuring transparency and the free transference of funds. It is important to say that the Brazilian Shipping of Profits Act ensures the right of repatriation and shipping of fruition capital and venture capital invested in the country, as well as the acquisition of foreign currency to pay royalties and services.

Beyond the economic aspect, the public policies of Brazil has focus also in the social area, ensuring corporate social responsibility and effective measures against corruption and violence.

The entering of foreign capital in Brazil depends of some peculiar requisites; despite the Federal Constitution ensures the same treatment to Brazilian and foreign companies.

The Central Bank of Brazil rule the entrance of foreign capital, by the Resolution 4.373/2014, which provides the information to non-resident investors. This institution also ensure the purchasing power, economy liquidity and financial stability, by its resolutions.

The foreign exchange market is ruled by the Law 4.278/1965 and the registration of foreign capital is ruled by the Law 11.371/2006.

The registration of foreign investment shall be required in 30 days from its entrance in Brazil, independent of payment of any costs. In the same deadline, but from the accounting record approval, the corporation must proceed the registration of the reinvestments of profits. The lack of information or the providing of false, incomplete, incorrect or out-of-date information are infringements subject to punishment action by the Central Bank of Brazil.

The foreign capital must be registered in national currency, at the Central Bank of Brazil, and must be in the accounting of the Brazilian corporation.

After all, it is important to say, the international investors must take care and contact an advisor to help in the development of any project, especially because of the complex brazilian tax system.