Brazil Company Registration Services
What is it about Brazil that makes it such an appealing market for the foreign investor? It’s strategic location? It’s large and continuously growing consumer market? Because Brazil is the 6th largest economy in the one and among the top 10 fastest growing economies in the world? The answer is, all of the above.
Why Brazil is a Good Place for Company Registration
Brazil has a large middle class population and an annual GDP growth rate of about 6%, which means incomes are rising and the spending power of consumers is increasing.
Brazil has a strong and globally integrated business base with a solid and modern day banking system in place. There are several prominent world investment banks already set up in Brazil to attest to this, and it just shows how quickly the economy of the country is steadily on the rise.
Brazil is also a politically stable country, with tourism on the rise. Brazil also produces 25% of the world’s ethanol, and has one of the largest renewable energy programs in the world.
Brazil also has a qualified work force that is ready for hire, with approximately 60% of its workers being computer literate, although this would vary depending on which parts of Brazil investors are attempting to establish a business in.
What Tax Benefits Do Companies Registered in Brazil Get?
Companies that are registered and formed in Brazil would enjoy the following tax benefits:
- Brazil Limited Liability Companies would enjoy the benefit of 28 double taxation treaties which minimises the withholding tax.
- There are also no withholding taxes imposed on the dividend distributions to non-residents, whether or not they are corporate or individual.
- Brazil also has over five Free Trade Zones which offer foreign companies tax exemptions and reductions as well as flexible trading laws. The free trade zones in Brazil are located in Manaus, Macapa, Guajara-Mirim, Santana, Tabatinga, Boa Vista & Bonfim.
- Foreign investors in Brazil are allowed to buy stocks on the Brazilian main stock exchange without being subjected to any local capital gains tax in the process.
- All dividends which are distributed by a Brazilian company to both non-resident individuals and corporate entities are exempted from withholding tax.
What Business Challenges Would Investors Registering a Company in Brazil Face?
Just like other business markets, Brazil comes with its own sets of challenges when it comes to running a business. Some business challenges that investors may be up against when they’ve decided that they want to form a company in Brazil include:
- Brazil’s transportation infrastructure still needs to be improved upon and it this aspect could make it difficult to export goods to other parts of the Latin American countries.
- Resident companies in Brazil would also be subjected to high taxes, with the average corporate tax rate in Brazil being 34% and VAT as high as 25%. Income tax also accounts for about 8% to 28%.
- In additional to corporate taxes, there are also gross revenue taxes and a mandatory social contribution of about 7.6% which employees would be required to pay.
- Government agencies in Brazil are also not the most efficient of systems. It could, for example, take as long as eight weeks for immigration visas to be approved and as long as 20 weeks for a company to be incorporated, which is too long of a time frame.
- Office space rental in Brazil can also be a costly affair.
For more information on company registration in Brazil, contact us for our full list of services.