Foreign Non-Resident Partners in Brazil: Key Legal Considerations

It is entirely lawful — and fully supported under Brazilian law — for a foreign non-resident investor to become a partner in a Brazilian company. However, this process involves specific legal and regulatory requirements

Unlike foreign residents, a non-resident investor is not required to obtain a visa solely to participate in a Brazilian company. Their equity participation qualifies as Foreign Direct Investment (FDI) and is subject to foreign exchange regulations as well as legal representation requirements in Brazil.

The legal framework governing foreign partners is primarily set out in the Brazilian Civil Code (Law No. 10,406/2002), the Brazilian Corporations Law (Law No. 6,404/1976), Decree-Law No. 1,179/1971, and the Federal Constitution of Brazil.

Mandatory Appointment of a Legal Representative in Brazil

A key requirement is the appointment of a legal representative — either an individual or a legal entity — domiciled in Brazil. This representative must be granted powers to receive service of process, including judicial and administrative notices, on behalf of the foreign partner. This mechanism ensures legal certainty and enforceability within the Brazilian legal system.

Brazilian Tax ID (CPF) Requirement

The non-resident investor must obtain a Cadastro de Pessoa Física (CPF) — the Brazilian individual taxpayer identification number — issued by the Brazilian Federal Revenue Service. The CPF is essential for participating in any company and for conducting financial, tax, and regulatory transactions in Brazil.

Central Bank Registration of the Investment

All foreign direct investments must be registered with the Central Bank of Brazil (Banco Central do Brasil — BACEN) via the Foreign Direct Investment Electronic Declaratory System (SCE-IED). This registration is not merely a bureaucratic formality — it is a legal prerequisite for the lawful inflow of foreign capital into Brazil and for ensuring the right to repatriate profits, dividends, and the invested capital itself. Investors must also keep this registration up to date under BACEN’s regulations to remain fully compliant.

Sectoral Restrictions Apply

Sector-specific restrictions on foreign ownership, as established by the Federal Constitution and other applicable laws, fully apply to non-resident investors. Industries such as nuclear energy, postal services, broadcasting, and financial institutions are subject to significant restrictions or outright prohibitions on foreign equity participation. Before investing, it is essential to determine whether the target business operates within a regulated or restricted sector.

Conclusion

Brazil offers attractive opportunities for foreign investors under a clear and structured legal framework. With proper legal counsel and compliance with local regulations, non-resident investors can successfully become partners in Brazilian companies and benefit from one of the largest and most diversified economies in the Southern Hemisphere.

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