Brazil is the world’s tenth largest and the largest economy in the LATAM region. Its economy relies on services, agriculture, manufacturing, and mining industries. The Brazilian government promotes foreign investment, and the US is Brazil’s largest source of foreign direct investment. Additionally, the US is Brazil’s second-largest trading partner. The nation’s open and diverse economy has developed flourishing trade relationships with over 100 countries.
Unlock growth opportunities in Brazil with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating Brazil’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in Brazil, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR Structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with Brazil’s employment and tax laws, helping you scale confidently and compliantly.
Also known as limited liability company, it is the most common business structure with limited liability for shareholders, Limitada requires one natural person or more than two partners who can be individuals or entities. This structure is flexible and suitable for most business activities.
A joint-stock company similar to a corporation, this structure is suitable for larger businesses planning to raise capital or go public. It requires a minimum of two shareholders and has more complex governance requirements including a board of directors. This structure is preferred for companies with significant capital requirements or those planning future public offerings.
At least one administrator (director) must be a Brazilian resident or a foreigner with permanent residence in Brazil. The administrator can be a shareholder, or a third party appointed by the shareholders.
Must have a board of directors with at least three members, with the majority being Brazilian residents or foreigners with permanent residence in Brazil. Also requires a supervisory board (conselho fiscal) if certain thresholds are met.
Bank account setup in Brazil follows a specific process that must be coordinated with entity incorporation:
Bank Account Setup in Brazil: What’s Possible and When
Before Incorporation:
After Incorporation:
Note:
Brazilian banks require extensive documentation and typically prefer in-person meetings for account opening.
Required documents include the company’s registration certificate, CNPJ, directors’ identification, and proof of business activity.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in Brazil is primarily governed by the following laws:
While not legally required, written employment contracts are strongly recommended in Brazil to clarify responsibilities and reduce legal disputes.
Some of the standard details mentioned in the written contract include:
The different types of employment relationships are:
Indefinite-Term Employment
The most common and preferred form of employment in Brazil, providing job security and stability to employees. These contracts have no predetermined end date and can be both full-time and part-time. Indefinite contracts provide the strongest legal protection for employees.
Fixed-Term Employment
Temporary employment contracts with a specific end date, limited to a maximum of 2 years. These are used for specific projects, seasonal work, or temporary business needs. Fixed-term contracts can be renewed once for the same period, after which they must be converted to indefinite-term contracts.
In Brazil, a probationary period typically lasts up to 90 days, which can be split into two 45 days each.
The regular working hours in Brazil are eight hours a day and 44 hours a week. A one-hour break for rest and meals is mandatory for employees working more than 6 hours per day.
Overtime
Up to 2 hours of overtime is permitted each day.
Notice periods vary based on the reason for termination:
Severance pay includes various components:
Foreign nationals can live and work in Brazil by securing a work and residence visa. With a valid job offer and employer sponsorship, individuals with the right skills or qualifications may be eligible for temporary or long-term work authorization.
Work Visa & Permit Options in Brazil
1. Temporary Visa (VTEM)
The most common work visa for foreign professionals.
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2. Investment Visa
For entrepreneurs and investors establishing businesses in Brazil.
3. Intra-Company Transfer Visa
For multinational companies transferring employees to Brazilian operations.
4. Permanent Work Visa (VIPER)
For skilled professionals in high-demand sectors.
5. Digital Nomad Visa (NEW as of 2024)
For remote workers employed by companies outside Brazil.
Key Notes:
A foreign worker’s employer must obtain approval and register employeed with the Ministry of Labor and INSS.
Brazilian employees are entitled to 30 calendar days of paid annual leave after being employed for 12 months. Furthermore, at least one of the vacation periods needs to be 14 days long, and two at least 5 days long.
Female employees receive 120 days of paid maternity leave and companies may extend maternity leave for their employees by an additional 60 days.
Male employees receive 5 days of paid maternity leave. Companies participating in the Corporate Citizen Program, which extends to 20 days of paternity leave.
Employees in Brazil receive paid sick leave through the social security system:
The following statutory national holidays are observed in Brazil:
Additionally, Brazil observes the following optional holidays, known as Ponto facultativos:
State and municipal holidays can vary significantly, especially in São Paulo and Rio. Optional holidays like Carnival often mean multi-day closures.
The payroll frequency is usually monthly, and employees are paid by the 5th working day of the following month.
The law mandates that employers provide a bonus, an additional month's salary, at the end of the year. It is commonly known as the 13th month salary or a Christmas bonus. It is typically paid in two instalments:
Employees in Brazil must pay Social Security taxes, which contribute to Social Security benefits.
The mandatory benefits in Brazil include:
Accounting standards must adhere to Brazilian Generally Accepted Accounting Principles (BR GAAP) and International Financial Reporting Standards (IFRS), as adopted by the Accounting Pronouncements Committee (CPC).
Companies in Brazil must file various reports with different authorities.
Statutory audit is required for companies that meet any of the following criteria:
Independent audits must be performed by certified auditors registered with the Brazilian Securities Commission (CVM).
Brazil has a complex corporate tax system with multiple taxes:
Brazil is currently implementing a comprehensive VAT reform:
The filing deadline for corporate tax returns is typically by the last working day of July.
In the case of non-compliance penalties include:
Brazil has unique transfer pricing rules that differ from OECD guidelines:
Brazil has implemented CbC reporting requirements:
Transfer pricing documentation requirements:
Master File
Local File
Deadline: Must be available by the end of the tax filing period (typically end of July), not automatically submitted unless requested.
Brazil’s General Data Protection Law Lei Geral de Proteção de Dados (LGPD), Law No. 13,709/2018, came into full effect in August 2021 and is similar to the EU’s GDPR.
Brazil’s AML framework is governed by Law 9,613/98, as amended by Law 12,683/12, which expanded the scope of covered entities and enhanced compliance requirements.
Obligated entities: Banks, insurance companies, securities brokers, real estate agents, dealers in precious metals, lawyers, accountants, and other financial service providers.
Key requirements:
Penalties: Fines ranging from R$ 200 to R$ 20 million, license revocation, and criminal prosecution.
Reasons you should setup legal entity in Brazil:
Cerity Global ensures your business expansion in Brazil is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your Brazil business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in Brazil.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location.
To discuss your needs and how we can help you achieve a compliant and efficient expansion.