Learn about the bureaucracies and important points so that you can open a foreign branch in Brazil without major problems
Due to all the existing bureaucracies, the process of starting a business is already considered complex and cumbersome by many entrepreneurs. Therefore, choosing to expand a business to another country is certainly even more laborious.
Understanding all the procedures and details related to documentation is extremely important to avoid problems or failures during the procedures; after all, several particularities may be involved - according to the location where the branch will be opened.
Therefore, to open a foreign branch in Brazil, it is necessary to understand all these aspects involved...
And for this, we, from the International Group, will address during the next topics of our article the main points to be clarified for you, entrepreneur, to remove all doubts about how to open your branch.
So we hope you have a great read and stay with us until the end!
How the bureaucracy works for business expansion
First of all, it is necessary to understand how it works and what needs to be done regarding the documentation, so that it is possible to know how to proceed with all the rest of the steps that involve the legalization process - thus avoiding unforeseen events during the procedures.
Therefore, it is necessary for you to be aware of the Brazilian legislation regarding cases like this.
With this, observe below some of the situations to be considered when opening a foreign branch in Brazil. After all, there are some differences that every entrepreneur needs to know.
Difference between opening a branch and a Brazilian company with foreign participation
Many entrepreneurs are confused, but there is a difference between opening a branch and having a Brazilian company with foreign participation, and the complexity of the processes is the main one.
The bureaucracies concerning the expansion of a company's operations to another country are greater and, consequently, the requirements for opening a branch in Brazil are great.
According to article no. 1134 of the Civil Code, in order for a foreign company to carry out its activities in another country and open a branch, it must obtain the consent of the Executive Branch.
In this scenario, it is the responsibility of the Department of Enterprise Registration and Integration (DREI) to guide and make the proper analysis of authorization requests from foreign companies that show interest in expanding their activities to other countries.
Thus, only after approval by the DREI will the company be authorized to open a branch in Brazil. However, for this to happen, it is still necessary to take some steps.
What are the steps to open a branch
In order for the entrepreneur to open a branch of his company in Brazil, he must be aware of all the necessary information and procedures. They are the following:
- Appoint an attorney-in-fact to represent the foreign partners in the country;
- Consularization and copy of the foreign partners' documents;
- Sworn translation of foreign documents;
- Obtain CNPJ and CPF for foreigners;
- Drawing up the social contract and registrations;
- Open a bank account.
Therefore, it is extremely important that the foreign partners have specialized support in international issues - such as accounting - to help them through the process.
In this way they will get assistance on which decisions are the right ones to take, and thus the chances of mistakes occurring are avoided.
Problems during the opening process
Due to the lack of attention, all the bureaucracies and complexities, problems may arise at some point - especially in the absence of qualified professionals.
Among the main problems is the delay during the process of opening a branch or even in setting up a company with foreign capital.
After all, Brazilian law is very strict, which makes it necessary that all requirements are met correctly from the beginning.
Other unforeseen events
Still within some eventualities that may occur at the moment the company is opening a foreign branch in Brazil, some unforeseen issues regarding procedures or documentation may appear.
Thus, whenever there is any change regarding corporate issues - whether in the articles of incorporation or in the company's bylaws - it must be forwarded to the Brazilian government, through the Executive Branch, which must agree or disagree with the modifications presented in such a document.
Among some points that deserve attention are:
- All documents need to have their translation notarized in order to prove the authenticity of what is being said;
- As Brazil has signed the Hague Apostille Convention, there is the possibility that the documents brought above can be presented by means of apostille - done by notary and registry offices.
- Need to open a bank account in Brazil to perform financial transactions for the foreign subsidiary or partner that has assets in the country;
- Need for foreign partners to acquire CNPJ or CPF - as we have already anticipated.
In this sense, we can see that the procedures have a high complexity and, with this, we confirm the need for the help of specialized professionals.
Professionals specialized in opening and legalization of companies
Understanding the legislation and all the necessary bureaucracies, as well as the requirements to be met, is extremely important for a foreign company to establish its activities in Brazil through a branch.
As we presented during our article, the laws on corporate incorporation in our country are complex and constantly changing. Therefore, one of the main points to be considered when performing the procedures is the search for a specialized service.
In this perspective, count on the professionals of the International Group!
Founded in 2000, the International Group is a Brazilian company that provides consulting, business, legal, accounting, and auditing services to national and foreign companies.
Our company has become a national and international reference for its vast knowledge in setting up foreign companies in Brazil and opening companies abroad.
We specialize in tax planning, business plan development, and feasibility studies, and we are present in 27 countries.
Our professionals work with legal representation of foreigners who undertake business in Brazil, taking care of all issues concerning the representation of partners and the temporary administration of their companies.
Talk to our team
To count on the support of the International Group, as well as to have more peace of mind and safety during the process of opening a foreign branch in Brazil, contact our consultants right now.
Fill in the requested fields in our "Quick Contact" channel and, soon, we will get back to you.
If you prefer, you can contact us by phone (11) 4506-3156 / (21) 4560-3075.
