When is it necessary for a foreign company to have a CNPJ (Tax ID) in Brazil?

When is it necessary for a foreign company to have a CNPJ (Tax ID) in Brazil?

Besides companies who invest in the Brazilian stock market, there are also two more situations where a foreign company is obliged to register itself in the Country in order to obtain a registration number on the Federal Treasury (“Receita Federal”).

The registration number is called CNPJ (“Cadastro Nacional de Pessoas Jurídicas”). The first situation where there is the requirement for a CNPJ applies for companies who own certain assets in the Country, which are: real estate, vehicles, vessels, airplanes and checking bank accounts. Failure in registering the company in those cases can result in penalties and sanctions from the government, which could result in the loss of the asset. However, for situations that include acquiring brands and patents, or foreign investment through the mechanism of representative share certificates or other transferable securities (Depositary Receipts) issued abroad and backed by transferable securities deposited in specific custodies in Brazil, the registration is not required.

The second situation applies for companies who perform or hire certain services in Brazil, which are:

  • Acquisition of intangible assets with payment deadline of more than 360 days;
  • Any kind of financing of funding grants in the country;
  • Import financing;
  • International leasing (“lease”);
  • Renting of equipment and chartering of vessels;
  • Importing goods without currency exchange coverage for the payment of capital of Brazilian companies;
  • Loans granted to residents in the country;
  • Investments (equity investments in Brazilian legal entities).

If you plan doing business in Brazil and realize that you need to register your company, proceedings are done before the Brazilian Commercial Boards and the Federal Revenue Agency. Those procedures are explained with more detail on another article called “Starting a Business in Brazil: An Introductory View of Brazilian Corporate Law”, which can be seen at XXX (Link)

If you have any questions regarding this matter, please contact us and let us know, we would be glad to assist you and your company on these endeavors.

Read more here: Opening companies in Brazil

How to establish a simple business corporation in Brazil

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