Living in Brazil

Can Foreign Residents Open a Company in Brazil? Absolutely — Here’s How

04/01/2025 /

For foreign investors who already hold regular residence status in Brazil, becoming a partner or shareholder in a Brazilian company is significantly less cumbersome than for those seeking residency purely through an investment visa. Below is an English‐language version—tailored for LinkedIn—designed to highlight the corporate‐law perspective and attract new investors to Brazil

Foreign Residents as Corporate Partners in Brazil

For a foreign investor who already maintains valid residence status in Brazil, joining or founding a business entity is often more straightforward, particularly because there is no need to secure a special “investment” visa (VITEM‐IX) solely for that purpose. Whether residence was granted based on marriage, family reunification, work, or another migration pathway, a foreign resident enjoys nearly the same legal capacities as a Brazilian national when it comes to corporate participation.

Governing Legal Framework

Brazilian corporate law treats all partners or shareholders—whether Brazilian or foreign resident—in essentially the same way, provided the foreigner holds a valid Residence Permit (Registro Nacional de Estrangeiro, or “RNE”) and an active CPF (Cadastro de Pessoa Física). The foundational statutes include:

  • Civil Code (Law No. 10.406/2002): Defines general partnership rules, capacity, voting rights, and liability regimes.
  • Corporations Law (Law No. 6.404/1976): Regulates joint‐stock companies (sociedades anônimas), including governance, share issuance, and disclosure obligations.
  • Decree‐Law No. 1.179/1971: Addresses certain foreign‐capital aspects in corporate structures.
  • Federal Constitution: Sets forth restrictions on foreign ownership in strategic sectors and guarantees equal economic‐activity rights for foreign residents.

No Investment‐Visa Requirement

One of the most important practical advantages for a foreign national who already resides in Brazil is the waiver of the VITEM‐IX (Permanent or Temporary Investment Visa) when incorporating or acquiring equity in a Brazilian company. Once the foreign resident has:

  • A valid residence permit (e.g., RNE card);
  • A regularized CPF; and
  • Met all standard eligibility requirements (e.g., being at least 18 years old),

then he or she is fully empowered to act as a partner (quotista) or shareholder (acionista) under the same terms as a Brazilian citizen. In other words, if you already live here on a family, work, or other long‐term visa, there is no need to apply for—and wait to obtain—a distinct “investment” visa simply to take an equity stake.

Special Regimes: Sole Proprietorship and Micro-Entrepreneur Models

Microempreendedor Individual (MEI): Under the Micro-Entrepreneur regime (Complementary Laws No. 128/2008 and No. 147/2014; Decree No. 7.287/2010), a foreign resident may register as an individual micro‐entrepreneur, provided:

  • They hold a valid visa or residence permit (e.g., VITEM‐II for work, VITEM‐IX for investment, VIPER for family reunification).
  • They have an active CPF and proof of a Brazilian residential address.
  • They present their RNE or a valid residence application protocol.
  • Their chosen activity appears in the official list of permitted MEI activities.
  • They employ no more than one (1) staff member.

Note that the MEI cannot engage in restricted or highly regulated activities; hence, if a foreign resident’s intended business falls outside the allowed MEI listing, they must choose another corporate form.

⚠️ MEI status is restricted to low-risk activities and micro-businesses.

Individual Entrepreneur (Empresário Individual): A foreign resident may also operate as an Individual Entrepreneur under the Civil Code and Complementary Law No. 123/2006, but must maintain:

  • A valid residence visa (e.g., VITEM‐IX or VIPER).
  • Active CPF, valid RNE (or residence protocol), and a Brazilian address.
  • A social contract (contrato social) or equivalent registration document filed with the Board of Trade (Junta Comercial).

Unlike the MEI, an Individual Entrepreneur may have more than one employee and choose from a broader list of permitted business activities—but both MEI and Individual Entrepreneur regimes make it clear that a valid residence status is a precondition.

4. Mandatory Foreign‐Capital Registration (BACEN)

Even as a resident, any foreign‐capital injection into a Brazilian company must be registered with the Central Bank of Brazil (“BACEN”) through the SCE‐IED system (Sistema de Prestação de Informações de Capital Estrangeiro – Investimento Direto). This registration is critical for:

  1. Authorized capital inflow: Officially recognizing the foreign funds that enter Brazil.
  2. Monitoring Capital Flows: Ensuring compliance with anti‐money laundering rules and facilitating regulatory oversight.
  3. Repatriation of Profits or Capital: Enabling future outward transfers of dividends, interest, or the original investment.

Failure to register can lead to fines, complications in profit remittances, or even questions regarding the legality of the investment.

5. Sector‐Specific Restrictions

Brazil’s Constitution and various infra‐constitutional laws impose ownership limits or impose prior-authorisation requirements in certain “strategic” or “sensitive” sectors. These include—but are not limited to:

  • Broadcast Media (Radiodifusão): Foreign ownership in television and radio is capped and requires prior consent from regulatory authorities.
  • Nuclear Energy: Any participation is subject to strict governmental approval.
  • Postal Services: The federal government controls the postal monopoly, with substantial restrictions on foreign stakes.
  • Financial Institutions: Bank and non‐bank financial entity ownership is regulated by the Central Bank, with ceilings on foreign shareholding percentages.

Therefore, even a resident foreign investor must confirm sectoral restrictions before subscribing to equity. If you are targeting a regulated industry, verify in advance whether registration with or approval from the Ministry of Justice, National Telecommunications Agency (ANATEL), Central Bank, or other watchdog is needed.

6. Tax and Compliance Obligations

As a partner or shareholder, a foreign resident is subject to the same corporate‐tax, bookkeeping, and reporting requirements as any Brazilian partner:

  • Corporate Income Tax (IRPJ) and Social Contribution (CSLL): On the company’s profits.
  • Withholding Taxes: On payments made to foreign entities (e.g., royalties or service fees to a foreign parent).
  • Annual Reporting: Including corporate resolutions and financial statements filed with the Board of Trade and Receita Federal (the Federal Revenue Service).
  • Disclosure of Related‐Party Transactions: If the foreign resident has related companies abroad.

Maintaining up‐to‐date RNE and CPF status also ensures smoother compliance with payroll taxes (e.g., FGTS, INSS) if the foreign partner draws a salary or supervises operations on the ground.

Why Residency Makes a Difference

By holding a valid Brazilian residence permit, you eliminate the procedural hurdle of applying for an Investor Visa (VITEM‐IX) when setting up or joining a Brazilian company. You effectively step into the same legal obligations and entitlements as a Brazilian citizen concerning corporate governance, share transfers, and business continuity. This translates into:

  • Faster Company Formation: No lengthy visa approval process specifically tied to your investment.
  • Simplified Documentation: A single residence permit and CPF suffice for corporate participation.
  • Equal Treatment: You may serve as a board member, statutory director, or officer under the same rules as Brazil‐based partners.

Should you decide at a later date to repatriate profits, increase your equity stake, or sell your shares to an overseas buyer, having the foreign‐capital registration (SCE‐IED) already in place helps you avoid added red tape.

Conclusion

If you already live in Brazil as a legal resident, incorporating or becoming a partner in a Brazilian company is almost as seamless as it is for any Brazilian citizen. You do not need a separate “investment” visa; you simply need to keep your RNE and CPF current, comply with regular corporate‐law formalities, and register any foreign capital injection with BACEN. Before placing money in any specific sector, verify whether your industry is subject to ownership limits or prior authorization, but otherwise, you stand on equal legal footing with local investors.

By understanding these advantages and planning for BACEN registration and sectoral compliance, you can accelerate your entry into the Brazilian market and focus on growing your business rather than battling immigration paperwork.

Disclaimer: This post is for informational purposes only and does not constitute legal or tax advice.