Financial Law in Brazil

An investment in any country requires an understanding of the national financial institutions. Even if you are investing domestically, you are likely to deal with multiple banks on a regular basis. If you plan on making foreign investments in Brazil, you should understand the system of financial institutions that exist there. Financial institutions in Brazil are either part of the public sector or the private sector.

Public Sector

The banks and financial institutions in Brazil that are controlled by the Federal and State Governments are those that exist in the public sector. Primarily, the purpose of these banks is to focus on fostering Brazilian economic development, particularly in agriculture and industry. The banks perform commercial banking duties. Some of the banks included in this sector are:

• Banco do Brasil – This is Brazil’s largest bank and it provides full-range banking services.
• BNDES – This is Brazil’s main agent for policies concerning investments. It is mainly focused on medium and long-term financing in the private sector.
• Banco da Amazonia and Banco do Nordeste do Brasil – Both of these multi-service banks are responsible for general public-sector development.

Private Sector

If you are making foreign investments in Brazil, you will deal with the private sector. In Brazil’s private sector, there are finance, investment, and credit companies, investment banks, credit cooperatives, brokerage firms, insurance companies, leasing companies, and more. Some private-sector Brazilian financial institutions include:

• Multiple-Service Banks –Banks that are considered multiple-service in Brazil must contain the word “Banco” in the name and must operate in at least two of the following services: commercial investment, leasing and credit commercial development, real estate credit, financing, and investment portfolios.
• Commercial Banks – Commercial banks can actually be private or public, and they are mainly focused on funding for commerce, service-supplier companies, industry, individuals, and other third parties.
• Investment Banks – These banks must include the words “Banco de Investimento” in their name, and they should specialize in temporary equity interest transactions. They can manage third-party assets and provide working or fixed capital.

Get Advice on Brazilian Banking

The different types of financial institutions in Brazil might seem confusing, so it’s important that you speak with a professional if you plan on investing or doing business there. Not all banks and institutions perform the same tasks, so choosing the right one for your needs is paramount to your financial success. All foreign investments in Brazil are subject to registration with the Central Bank of Brazil, and authorization for foreign investments must be first granted by the Executive Branch Decree. This provision falls under Article 52 of Brazil’s Temporary Constitutional Provisions Act.

You should take legal action if you feel that your bank in Brazil discriminates against you for obtaining credit, does not honor your checks, or makes it difficult for you to access your funds. In any of these cases, you might need to take your bank to a court or into litigation, as these are all against the laws of banking in Brazil. If you feel that your bank in Brazil is discriminating against you, contact a Brazilian attorney to help get you through the problem.

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