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Company Formation in Brazil

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Company Formation in Brazil

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Company Formation in Brazil

There are eighteen steps and a R$1700 wedge to be made and paid to start a business in Brazil, excluding the registration fee to both Patronal and Employees Unions. It takes more than five months to complete each sequential procedure, but if you are there the whole time, and you're shrewd, it is possible in four. Company formation in Brazil may seem long-winded, but many of the procedures in this process run simultaneously, as follows:

  • Check the company name with the State Commercial Registry Office. This process takes 1 hour.
  • Pay registration fees. Proof of payment will need to be obtained. This takes one day.
  • Register with the commercial board of the state where the main office is located, and obtain the identification number (NIRE). This takes 1 day and costs R$60 for registration and R$100 for an expediting fee.
  • Register for federal and state tax (Secretaria da Receita Federal do Ministério da Fazenda, SRF/MF), obtain CNP J number, which also registers employees with the National Institute of Social Security (Instituto Nacional da Seguridade Social, INSS). This takes about 22 days.
  • Confirm INSS enrolment. Company information needs to be entered onto forms, which is confirmed by the company's legal representative at the Office of Federal Revenue after about 4 days. This takes 1 day and runs simultaneously with the 4th procedure.
  • Receive a state tax inspection. This is a one day process which runs simultaneously with the previous one.
  • Obtain authorisation to print the receipts and invoices from the Secretaria da Fazenda Estadual. This takes 1 day.
  • Register with the Secretaria Municipal de Finanas (Municipal Taxpayers' Registry) in So Paulo. This takes 5 days and runs simultaneously with procedure 5.
  • Pay TFE (taxa de fiscalizao de estabelecimento) to the Municipal Taxpayers' Registry. This takes 1 day and is simultaneous with procedure 5. The cost is R$300 for a retailing business, but this may vary based on the company's activities.
  • Get the authorisation from the Secreteria Municipal de Finanas to print the receipts and invoices. This takes 1 day.
  • Order the receipts and invoices (notas fiscais) with CNPJ numbers from authorised printing companies. This takes 3 days, and costs R$600 (based on a rate of R$0.6 per page, with a printing of 1000).
  • Obtain a licence from the fire brigade in the State of So Paulo. This, plus the following 2 procedures take 120 days.
  • Receive an inspection from the fire brigade.
  • Apply to the municipality for an operations permit (Alvar de Funcionamiento). Due to the long processing time to obtain the permit, municipalities have permitted companies to operate, on the grounds that the TFE has been paid.
  • Register the employees in the social integration program (Programa de Integrao Social, PIS). After this has been done, the company must open a Fundo de Garantia por Tempo de Servio (FGTS) account for each employee. This is a one day process and runs simultaneously with procedure 14.
  • Open a special fund for unemployment (FGTS) account with the bank. This is a one day process and is simultaneous with procedure 14.
  • Notify the Ministry of Labour (Cadastro Geral de Empregados e Desempregados, CAGED) of any news employee hires or dismissals, along with any transfers to another locality. This takes 1 day and is simultaneous with procedure 14.
  • Register with the Patronal Union and the Employees Union, which is compulsory to ensure that the company is obeying employee labour rights. This takes 5 days, and is simultaneous with procedure 14.

Offshore Companies

By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

  • Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
  • Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
  • Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
  • Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability

Charateristics of an offshore company:

  • Memorandum and Articles of Association
  • Certificate of Incorporation
  • Registered Office/Agent
  • Shareholders / Members
  • Directors / Managers
  • Company secretary
  • Statutory Register
  • Bookkeeping

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

Offshore Companies

By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

  • Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
  • Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
  • Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation

Characteristics of an offshore company:

  • Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
  • Memorandum and Articles of Association
  • Certificate of Incorporation
  • Registered Office/Agent
  • Shareholders / Members
  • Directors / Managers
  • Company secretary
  • Statutory Register
  • Bookkeeping

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

 

 

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Organisations that can assist with Company Formation

  • > Nominus.com

    When expanding your business to Brazil, donít forget to protect your brand. We provide Trademark Registration Services in Brazil and in all South America.

    More Details Visit Website

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