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Foreign Capital Registration in Brazil

Foreign Capital Registration in Brazil

Foreign capital in Brazil is money that has been invested from another country. Many business owners and individuals from the United States have been investing in Brazil for profit. Before you make the decision to invest in foreign capital, you should first understand the process of investing and the laws in Brazil that cover it.

Investment Process

To make a foreign investment in Brazil, you must first register your company at the Central Bank in the Data Processing Department. Since 2000, Brazil has only been accepting foreign investment declarations made via the internet. When you register at the Central Bank, you receive a password. The legal representatives of the company must duly sign the registration that is handed off to the Central Bank.

Once the process is complete and your company has acquired its password, you must go to the appropriate website and process your request. Once this transaction is complete, you must again return to the Central Bank to complete the registration. The profits generated from foreign investments are exempt from federal withholdings, and there is no restriction on their distribution.

Making a Profit from Foreign Capital

Even if you plan on reinvesting your profits from your Brazilian investment, you could still register them as foreign capital. In other words, you can invest in foreign capital, gain a profit, and then reinvested it before you even send it back home. This will increase your profits. Otherwise, you can send them abroad to your country of origin.

Any profit you make from your foreign investment in Brazil can be sent back to your homeland at any time with no prior authorization. However, capital that exceeds the amount of your registered amount that is sent back to your homeland will be subject to a 15% withholding tax.

The Central Bank of Brazil generally examines the net worth of the company involved when looking at foreign capital. Therefore, if the net worth of the company is negative, the Central Bank might call it a dilution and deny permission for profits from Brazilian investments to be sent back to its company’s country of origin.

Investing Carefully

Clearly, there are a few confusing conditions that change the way foreign capital is treated. However, for the most part, making a foreign investment in Brazil is profitable and simple. If your company is based in the United States and you are willing to invest in foreign capital in Brazil, you should consider speaking with a Brazilian attorney first. Waiting too long to do so might make the process complicated for you, and it might end up costing your company money in the end. While the laws in Brazil are sometimes similar to those in the United States, you should try to understand them before doing any type of business in Brazil to protect your company’s money and reputation.

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