H&CO Brazil

Why should companies consider investing in Brazil? 

Brazil is Latin America’s largest economy with a GDP of US $2.12 trillion in 2023. It's a global leader in agribusiness, mining, and renewable energy, offering vast natural resources, a sizeable domestic market (~212 million people), and strategic trade agreements like MERCOSUR . 

Is it difficult to do business in Brazil?

The main difficulties stem from a highly bureaucratic environment with a large amount of paperwork and frequently changing regulations, which generate significant delays and higher operating costs. The complex tax system is another major obstacle without proper guidance. These factors, along with high import tariffs and logistical challenges due to the vast geography and infrastructure, are key factors.

Which legal entity types are available for foreign investors? 

Brazil offers several structures:

• Sociedade Limitada (Ltda): Common, requires ≥2 shareholders, no minimum capital.

• Sociedade Anônima (S.A.): For larger operations or public companies, with minimum capital.

• Branch/Sucursal: Requires government approval and sufficient parent funding .

What are the key tax obligations for companies in Brazil? 

Corporate tax (IRPJ) is 15% plus 10% on income over R$240 000. Multiple VAT-like taxes apply—ICMS (state), IPI (federal), ISS (municipal), plus PIS/COFINS on revenue. Payroll contributions include INSS, FGTS, and others. 

Are there tax incentives or treaties for foreign investors? 

Yes—Brazil offers incentives like import duty exemptions, accelerated depreciation, and tax breaks in developing regions. It has double-taxation agreements with countries like the US, Canada, Germany, and others. 

What restrictions exist on foreign ownership? 

Generally unrestricted, though sectors like nuclear, media, land transportation, aviation, health, and postal require special authorization for foreign majority ownership . 

What labor and employment regs should companies know? 

Brazil’s labor code (CLT) mandates benefits like 13th salary, vacations, FGTS, regulated dismissals, and mandatory social contributions. Local Expert Employer of Record (EOR) solutions are often used to bridge compliance. 

How is data protection regulated? 

The LGPD (Lei Geral de Proteção de Dados) requires companies to appoint a Data Protection Officer and manage personal data carefully. Non-compliance can lead to fines of up to 2% of annual turnover (max R$50 million). 

What steps are needed to establish a company legally in Brazil? 

Key steps include: choosing a legal entity, registering with the Junta Comercial, obtaining a CNPJ, appointing a legal representative, filing sworn translations/apostilles for foreign documents, and registering IP at INPI. 

What cultural norms should businesses expect? 

Business in Brazil is relationship-focused—personal rapport is key. Meetings may start informally or run late. First-name usage is common; greetings include handshakes or cheek kisses. Emails mix professionalism with warmth; WhatsApp is frequently used.