Image: Canva.
This article provides a practical overview of the legal, tax and regulatory steps required to establish and operate a company in Brazil.
Brazil remains one of the most strategic and attractive markets in Latin America for international companies seeking expansion opportunities. With a large consumer base, diversified economy and access to key sectors such as energy, agribusiness, infrastructure and services, the country offers significant potential for foreign investors.
However, entering the Brazilian market requires careful planning. Legal, tax and regulatory complexities — combined with mandatory local representation requirements — make professional legal advisory essential from the very first stage. This guide provides a practical overview of how to set up a company in Brazil, appoint a local legal representative and begin operations in compliance with Brazilian law.
Brazil offers international businesses access to:
At the same time, Brazil is known for its formalistic legal system and layered regulatory framework, which requires foreign companies to operate through properly structured local entities and authorized representatives.
Selecting the correct corporate structure is a key decision that directly impacts governance, taxation and operational flexibility. The most commonly used vehicles by foreign investors are:
The LTDA is the most popular structure for foreign companies entering Brazil. It offers:
In addition to its contractual flexibility, Brazilian law requires an LTDA to appoint at least one managing partner (administrator), who will be legally responsible for representing the company before third parties and public authorities.
This administrator may be Brazilian or foreign, provided that a foreign administrator holds a valid residency status in Brazil or appoints a duly empowered local legal representative. Proper definition of management powers is essential, as the administrator assumes significant legal and compliance responsibilities on behalf of the company.
It is also important to note that an LTDA may be incorporated with a single shareholder, which may be an individual or a foreign legal entity, including a parent company or holding structure. This allows international groups to establish a wholly owned Brazilian subsidiary without the need for local partners, provided that foreign ownership and capital registration requirements are duly observed.
Corporations are typically used for larger projects, joint ventures or operations requiring more sophisticated governance structures. This model is often adopted when external investment, board oversight or capital market access is anticipated.
Corporations (S.A.) are subject to a more formal governance structure and must appoint executive officers (directors) responsible for the company’s day-to-day management and legal representation. At least one director must be appointed to act on behalf of the company, with clearly defined powers and duties.
While shareholders are not required to be residents in Brazil, the company must ensure that its management structure complies with local corporate and regulatory requirements.
Brazilian law also allows an S.A. to be incorporated with a single shareholder, including a foreign controlling company, through the structure known as a sole-shareholder corporation. This model is commonly used by multinational groups seeking full control over their Brazilian operations while maintaining robust governance standards. As with LTDAs, foreign investment must be properly registered with the Brazilian Central Bank to ensure full legal and financial compliance.
Brazil allows 100% foreign ownership in most sectors. However, foreign shareholders cannot operate directly without appointing a local legal representative domiciled in Brazil.
Key requirements include:
For foreign investors, the local representative in Brazil plays a critical operational and compliance role, acting as the legal interface between the company and public authorities.
At the incorporation stage, Brazilian law requires the company to appoint a local licensed accountant, whose details must be formally indicated during registration with tax authorities.
Ongoing accounting support is mandatory, as tax filings and compliance obligations are continuous and highly formalised in Brazil. Depending on the size of the company and the chosen tax regime, basic monthly accounting fees typically range from BRL 500 to BRL 3,000 (approximately USD 100 to USD 600 per month).
Costs vary significantly according to the applicable tax regime, as different regimes impose distinct reporting obligations and levels of complexity.
From a regulatory and operational perspective, it is also important to note that fiscal or virtual addresses are generally not sufficient for licensing industrial or manufacturing activities, as authorities require a properly licensed physical location to issue operating permits.
Conversely, for companies establishing a representative or contact office in Brazil, it is usually acceptable to initially operate from a coworking space or shared office address, provided that the activity does not require specific operational licences.
The incorporation and operational setup process typically involves the following stages:
Each step must be carefully sequenced to avoid delays, rejected filings or blocked operations.
1Brazil operates under a complex, multi-layered tax system in which taxes are levied at the federal, state and municipal levels.
Companies are generally subject to corporate income tax (IRPJ) and social contribution on net profits (CSLL), in addition to indirect taxes on goods and services, such as ICMS (state VAT on goods), ISS (municipal tax on services) and PIS/COFINS (federal social contributions on gross revenue).
The applicable tax burden and compliance obligations vary significantly depending on the chosen tax regime—namely Simples Nacional, Presumed Profit (Lucro Presumido) or Actual Profit (Lucro Real)—as each regime entails different calculation methods, reporting requirements and levels of complexity.
Proper tax planning2 at the incorporation stage is therefore essential to ensure efficiency and regulatory compliance.
Foreign companies must ensure that their local representative is properly authorised to:
Finally, it is essential to note that regulatory requirements in Brazil vary significantly depending on the company’s economic activity.
Businesses operating in regulated sectors, such as pharmaceuticals, medical devices and healthcare products, must obtain specific licences and authorisations from the competent regulatory authorities, including operating permits and authorisations issued by ANVISA (such as Autorização de Funcionamento de Empresa – AFE).3
Likewise, companies active in sectors such as oil and gas, electronics, telecommunications and industrial equipment may be subject to additional approvals, certifications and technical standards enforced by regulators such as INMETRO and ANATEL, among others.
These requirements directly affect licensing, timelines and operational readiness, making early regulatory mapping a critical step to ensure lawful commencement of activities and to avoid delays, penalties or restrictions once operations begin.
Insufficient or poorly structured local representation is one of the most common causes of operational bottlenecks for foreign companies in Brazil.
Companies hiring employees in Brazil must comply with strict labour regulations, including:
The local legal representative is typically responsible for overseeing labour compliance and responding to inspections or disputes.
Setting up a company in Brazil involves far more than formal incorporation. It requires effective local representation, regulatory awareness and disciplined execution.
For foreign companies, appointing the right legal advisor and local representative in Brazil is often the decisive factor between a company that exists only on paper and one that operates successfully and sustainably.
About Struecker Hungaro
Struecker Hungaro Advogados acts as a legal advisor in Brazil for international companies and investors, providing comprehensive legal support for cross-border transactions and market entry strategies.
Our team advises clients from the incorporation of local entities in Brazil to the structuring and negotiation of commercial agreements, including distribution agreements, agency and commercial representation contracts, as well as public contracts and government procurement procedures (public tenders).
Whether you are assessing escrow mechanisms, establishing operations in Brazil or structuring complex international transactions, we deliver enforceable, efficient and investor-ready legal solutions aligned with international standards and local regulatory requirements..
If you are interested in tax planning strategies, corporate structuring and cross-border business solutions, we invite you to explore other articles on our blog that may further complement your analysis:
Advogado. Mestre e Bacharel em Direito pela UFPR. Atua nas áreas de Direito Societário, M&A, Mercado de Capitais e Planejamento Sucessório.
