Brazil Country Profile business trade issues

Brazil

DOING BUSINESS

Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The government encourages foreign investments, essentially when they lead to the development of the Amazon and the Northeast regions. Furthermore, aids are granted to companies that invest in Research and Development, automation. Brazil set up a free trade zone in Manaus, located in the Amazon area in order to attract foreign investors.
The Instituto de Desenvolvimento de Minas Gerais (INDI - in charge with the Minas Gerais area) should be contacted for further information about investment laws and incentives.

Legal forms of companies

Form	Number of partners/shareholders	Minimum and/or maximum capital	Liability	Registration fee	Release of financial documents
Sociedade a responsabilidade limitada is a Private Limited Company.	Maximum 2 partners.	No minimum capital.	Liability is limited to the amount contributed. The liability is joint and several for the company's commitments within the limits of the capital remaining to release.		No
Sociedade anonima is a Public Limited Company.	Maximum 2 partners.	No minimum capital. NB: minimum 10% of the issue price of subscribed shares must be released in cash.	Partners' liability is limited to the amount contributed.		Yes
General partnership.	N/A.	No minimum capital.	Partners' liability is joint and several.		No
Limited partnership.	Two types of partners: active partners and sleeping partners.	No minimum capital.	Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed provided that they do not take part in the company management.		No

Registration and licensing procedures
Status (Contracto social for a Limited Liability company or Estatuto social for a Public limited company) must be drawn up in Portuguese by a lawyer. The companies's registration must be made either with the Trade Register (Junta Comercial), or with the legal entities Civil Register (Registro Civil das Pessoas Judicias) depending on the activity of the company. A checking that the company's name is not being used is carried out.

Legal framework
The law n° 4.131 adopted on September the 3rd of 1962 about registering foreign capitals, modificated by the law n°4.390 on August the 29th of 1964 and by the decree n° 55.762 adopted on February the 17th of 1965, regulates foreign onvestments in Brazil.

Foreign exchange control
Free conversion of foreign currencies is carried out as well as the right to transfer. There is an applicable exchange rate.

Regulations concerning equity investment
The investment system in Brazil is liberal which allows foreign investors to hold a majority of shares within their new business.

Foreign Direct Investment inflows in Brazil

FDI inflows	2003	2004	2005	World rank (*) 2005
FDI inflows (USD million)	10 144	18 146	15 066	82/141

Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

Last modified in 2006 - ongoing update