| Articles |
 |
Spring 2008 Investors in Brazil: Permanent Visa
by Carolina Garutti & Daniela Lima, EMDOC MRS, Brazil
Brazil has been reinforcing its role in the world as a great attractor of investments in different areas, from industry to tourism. Its outstanding role among the emerging countries is due to some reasons, as the fact that we have a market of 170 million people, the most developed industry in Latin America, inflation control and a large infra-structure.
This beneficial scenario is the reason of the high number of investor visas’ issuance. Until September 30th 2007, 976 visas were approved by the General Immigration Coordination. The graphic below illustrates the evolution of approbation of this type of visa:
According to the Ministry of Labor – Brazilian Government –, in 2007, the 3 states that attracted most investments were Rio Grande do Norte, Ceará and Bahia, all of them located in the North East region. This is due to its great tourism potential as one of the most beautiful landscapes in Brazil and due to its industrial potential attracting companies interested in the tax reduction. São Paulo and Rio de Janeiro are in the third and fourth place, respectively. In the other hand, the 3 countries that most invested in Brazil were Italy, Spain and Portugal
The investor visa is regulated by Normative Resolution number 60 of October 6th 2004, which allows foreign individuals who wish to start up a business in Brazil to obtain a permanent visa.
The main requirement to obtain this type of visa is the investment of an amount equivalent to at least US$ 50,000, duly registered in the electronic system of the Central Bank of Brazil. In order to comply with this requirement, the establishment of a Brazilian company – or the acquisition of a pre-existing one – is necessary.
In order to obtain an investor visa to Brazil, the following steps must be accomplished:
1) Obtainment of a CPF card (Individual Taxpayer´s registry card);
2) Power-of-Attorney to a Brazilian citizen who will act on behalf of the foreign investor;
3) Set up of the Brazilian company/registration with the Commercial Registry;
4) Enrollment of the company with the relevant authorities: Internal Revenue Service, city hall, INSS (social security system), FGTS, employers´ union;
5) Request authorization for the company to operate;
6) Investment of US$50,000, per permanent visa;
7) Obtainment of a work permit from the Ministry of Labor;
8) Issuance of the visa by the Brazilian Consulate abroad;
9) Registration with the Federal Police within 30 days from the arrival in Brazil;
10) Finally, run the company.
After setting up the company, the investor will have to transfer the money from his/her personal bank account to the companies´ bank account in Brazil. This transference will need to be registered in the Brazilian Central Bank as a long term investment. After that, an amendment in the articles of association of the new Brazilian company will have to be made, in order to attest that the capital is paid up and also to indicate the investor as a director of the company after the approval of the permanent visa.
It is important to emphasize that in order to establish the company it will be necessary, first of all, to have an address for it. The investor will need to have at least one partner (that could be a foreign or Brazilian company or an individual) and a temporary legal representative (a Brazilian individual or a foreign citizen with permanent residence in Brazil). After the permanent visa is issued and the investor is registered in Brazil with the Federal Police, he/she can finally assume the position of director in replacement of the temporary legal representative.
The visa will be granted for up to five years and its renewal will be granted upon evidence that the foreign national is still the owner of the company and that the company is active by means of corporate documents, corporate income tax return and mandatory yearly employee reports (“RAIS”).
Regarding taxation, the foreigner is considered a resident in Brazil, for tax purposes from the date of arrival in the country with the working visa. The investor is, therefore, subject to the payment of income tax in Brazil as per the tax rates table established by the Brazilian law (it is necessary to offer to taxation not only the amounts paid by Brazilians sources, but also the income received abroad). The form of taxation can be modified if there is reciprocity of treatment or international treaty to prevent double taxation between Brazil and the country where the source of the income is located..
