Regardless the location where you decide to start a business or expand, it is essential you understand corporate law in that area. Even if you are only investing in a corporation, you should be sure they are following the guidelines set forth by corporate law. Many businesses are expanding to Brazil in order to increase profit, so you are not alone if you are thinking about doing the same.
Corporate law in Brazil differs quite a bit from corporate law in the United States, so learning the peculiarities before your business is established may benefit you. While getting an overview of corporate law in Brazil is helpful, you should consider speaking with a lawyers in Brazil so that you do not leave out any important detail.
Types of Corporations
Corporate law in Brazil is set up to deal with many types of corporations, all of which must adopt the Brazilian articles of incorporation. Setting up a corporation in Brazil is a multi-step process, and any corporation that has not completed all steps is not actually considered a corporation at all. Ownership of these corporations involves owning stock in their success. The different types of corporations covered in corporate law include:
- General corporations
- Closely held corporations
- Nonprofit corporations
- Professional corporations
Some areas of corporate law you might be faced with when setting up your business include:
- Corporate Formation: Corporate formation or company formation, can be complicated in Brazil because criteria differ from state to state. When you go through with corporate formation in Brazil, you are allowed to obtain an import license, conduct business legally, rent property for your business, obtain a tax number and hire employees.
- Governance: Based on Brazilian corporate law, your business must prove it can manage itself responsibly and honestly. No matter how many shareholders there are in the corporation, business practices must be transparent, fair, and dutiful.
- Compliance Issues: You should get a Brazilian attorney when you are starting your business so that you donot fall victim to the many potential compliance issues associated with forming a corporation in Brazil. Issues such as following contract law, filing papers incorrectly, Visa applications, and tax law might all become a problem if not dealt with diligence.
Investing in Brazil
Corporate law in Brazil is fairly complex. There are many variables in the law from state to state, so being aware of the law before you begin business preparations is vital. If you accidentally break a corporate law, you could face serious consequences and your business could go under. To avoid making such a mistake, get in touch with a professional Brazil attorney at the very beginning so that they can walk you through the process correctly. Investing in Brazil for business is certainly not a mistake, but you could easily make a serious one if you assume that corporate law there is the same as in your country of origin.