1. What Does it mean to establish a business in Brazil?

 

To operate legally in Brazil, businesses need to be registered with the government, which provides a unique identifier for tax and legal purposes. Foreign entrepreneurs are allowed to establish a business in Brazil, but they must comply with certain requirements. You’ll need a CPF (Cadastro de Pessoa Física), and a legal representative who is a resident of Brazil to handle legal and tax matters.

 

2. Step-by-Step process to establish a Business

 

a. Obtain a CPF

Before starting the process, foreign entrepreneurs need to obtain a CPF, which is a personal tax identification number in Brazil. This can be done at Brazilian consulates or within the country.

b. Choose a legal structure

You can select from various types of business structures based on your revenue expectations and business activities:

• MEI (Individual Microentrepreneur): For businesses with annual revenue of up to R$ 81,000 and no partners.
• ME (Microenterprise): For companies with annual revenue up to R$ 360,000.
• EPP (Small Business): For businesses with annual revenue up to R$ 4.8 million​.

c. Conduct a viability check

This step evaluates whether your business can be established at the intended location, ensuring it aligns with local zoning laws.

d. Draft the articles of incorporation

If your business has partners, you’ll need to draft an agreement that outlines each partner’s roles and responsibilities, as well as the company’s activities.

e. Submit the DBE (Basic Entry Document)

The DBE form is filled with company details and submitted for review to the Receita Federal (Brazil’s Federal Revenue Service).

f. Register with the commercial registry

After approval, you must register your business with the local Commercial Registry of the state where it will operate. Once completed, your business will be legally recognized and able to operate​.

 

3. How long does It take to establish a business?

 

With recent improvements in 2023, the average time to legally establish a business in Brazil has been reduced to 1 to 2 days, which is remarkably fast compared to previous years​.

 

4. Choosing the right tax regime

 

Businesses in Brazil must select one of three main tax regimes:

• Simples Nacional: A simplified tax regime, ideal for small and medium-sized companies.
• Presumed Profit: Taxes are based on an estimated percentage of revenue.
• Real Profit: Taxes are calculated based on the company’s actual profits, and it’s typically suited for larger enterprises​.

 

5. Top 5 Concerns of foreign entrepreneurs

 

1. Can foreigners establish a business without residing in Brazil?
Yes, but you will need a legal representative who resides in Brazil to handle legal and tax matters​;

2. What is the best type of business to start in Brazil?
This depends on your projected revenue and type of business. MEI is a good option for small ventures, while ME or EPP are suitable for larger businesses​;

3. How long does it take to establish a business?
The process can be completed in 1 to 2 days, depending on the region and business type​;

4. What taxes do businesses need to pay?
The tax regime you choose will determine the taxes. Simples Nacional is commonly used for small and medium-sized enterprises​;

5. Can I establish a business remotely?
Yes, but you need to appoint a legal representative who lives in Brazil to handle all local processes​.

 

CLM Controller: assisting international entrepreneurs

 

For international entrepreneurs, navigating the legal and bureaucratic landscape of a new country can be challenging. CLM Controller specializes in offering personalized services for foreigners looking to establish their businesses in Brazil. Our team handles all the necessary steps, from obtaining a CPF and appointing a local representative to managing the entire registration process with the Commercial Registry. We ensure a smooth and efficient experience, allowing you to focus on growing your business in this vibrant market.

 

Get to know our accounting outsourcing services.

 

Conclusion

 

Establishing a business in Brazil is increasingly simple, with online processes and reduced bureaucracy. Foreign entrepreneurs should work with a local accountant and appoint a legal representative to ensure compliance with all tax and legal obligations. Partnering with experts like CLM Controller can help streamline the process, making it easier for international businesses to establish themselves in Brazil.