Brazil

In the last few years, Brazil has been experiencing a deep political crisis, mainly related to a large-scale anti-corruption operation called Lava-Jato, which exposed corrupt practices at all levels of the country's lea­dership. The political crisis is also closely related to the economic crisis – in 2015 and 2016, GDP fell by 3.8 %, respectively. by 3.6 %, which means the deepest recession since 1948. In 2017, there was a slight revival of the economy with growth at the level of approx. 0.5 %.

What you should consider before deciding to do business in Brazil and set up a company here

So, first of all, Brazil is a suitable gateway to South American markets. Brazil offers investors access to half of Latin America's popu­lation, investment incentives, low inflation and stable GDP growth.

The most common types of business in Brazil are the Limited Liability Company (SL, Limitada, česky s.r.o.) and the so-called Corporation (Sociedade por Acoes – SA). Limitada is the cheapest, simplest and most flexible type of company in Brazil. Two shareholders are needed to establish it. These shareholders do not necessarily have to be citizens of Brazil, which is a great advantage, it is only necessary to use the services of a so-called agent with Brazilian citizenship.

Partners are responsible up to the amount of their invested funds
A SA-type company in Brazil – Sociedade por Acoes – can also be a publicly traded company, depending on whether its securities are traded on the stock market.

Company statutes in Brazil must be accurately described in a document called „estatuto social“

The tax system in Brazil is not worth forgetting, as it is quite complicated. Taxes in Brazil are collected at three levels – municipal, state and federal. The basic rate for income tax is 15%, to which a 10% tax surcharge is added. Capital gains are subject to 15% tax and income from the sale of securities on the stock exchange 20%. So the numbers are quite acceptable, especially considering the area we are talking about.

The advantage of Brazil is the absence of withholding tax on dividends paid. Some municipalities may levy this tax in the range of 0.6% – 2% for certain areas of business or real estate transactions, but other than that the withholding tax is really zero.

A minor disadvantage is the relatively strict currency control in Brazil. Truth be told, you shouldn't have any difficulty in general. However, it is better to assess each case individually. Unlike many other countries, non-residents can open an account in the local currency, and Brazil tries to make the process of opening a bank account for foreigners as simple and fast as possible.

INVESTMENT IN BRAZIL

Currently, foreign capital is attracted to the BFR by the real interest rate, which is among the highest in the world. It currently represents 11.25%. In terms of state support for investment, the federal government offers benefits to businesses interested in locating in the less developed northeastern region of the country. The tax benefits are then valid for ten years. In the same projects, companies can also invest funds that would otherwise be paid to the state as income tax. Another advantage is the possibility of reinvesting up to 40% of the reported profit without tax burden.

Brazil is open to all people, and investors in particular.

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