Short answer. A foreign company can own 100% of a Brazilian company. The usual vehicle is a limited liability company (Ltda.) with the foreign company as partner, a manager who lives in Brazil, a power of attorney for a representative in Brazil, and registration of the investment with the Central Bank before money moves. A simple structure commonly takes 45 to 90 days. Most of that time goes into the partner's documents and, in regulated sectors, the professional registrations, not into the incorporation itself.
General information as of October 2026. Brazilian rules change often, and your home-country tax rules matter as much as ours. Confirm the final structure with legal and tax advisors before you commit capital.
The path in five steps
| Step | What happens | What usually takes the time |
|---|---|---|
| 1. Diagnosis | Define the business, the structure, the tax regime, the sector rules and the flow of money | Your answers to a short list of questions |
| 2. Partner documents | The foreign partner's incorporation documents and powers of attorney, apostilled and translated | Apostille, sworn translation, signatures abroad |
| 3. Registry and CNPJ | Articles of association registered at the Commercial Registry; taxpayer number issued | Registry rules of the state |
| 4. City, sector and bank | Municipal registration, professional or sector registrations, corporate bank account | The city, and any sector council |
| 5. Capital and operation | Exchange contract, capital paid in, Central Bank registration, first invoices | The bank and the exchange operation |
The five steps do not always run in a straight line. Documents for step 2 can be prepared while the diagnosis is still being finalized, and the bank account is often opened in parallel with the municipal registration. What cannot be skipped is the order of the money: the investment is registered with the Central Bank when the capital comes in, and everything that leaves the company later depends on that registration.
Step 1: the diagnosis
Good incorporation starts with questions about the business, not with forms. These are the questions that change the structure, the licences and the tax cost:
- Which company will be the partner in Brazil, and in which country is it established?
- How does the Brazilian company earn money: a fee per transaction, a percentage, a subscription, a service price?
- Who receives the payment from the customer, and how does each party receive its share?
- Does the business sell something that falls under a sector regulator, such as healthcare, financial services or education?
- How many customers, contracts or transactions do you expect in the first year?
- Will the Brazilian company pay a licence, a service fee or a loan to the parent?
The last question matters more than it looks. As shown further down, paying the parent as a dividend and paying it as a software licence can differ by several times in tax.
The structure: a Ltda. with a foreign partner
For most foreign businesses, the right vehicle is a limited liability company, the Ltda. Liability is limited to the capital, governance is light and Brazilian law also allows a single-member company, so a foreign parent can hold all the quotas on its own. Other options exist, and they are compared below.
| Ltda. (subsidiary) | S.A. (subsidiary) | Branch | |
|---|---|---|---|
| Separate legal entity | Yes | Yes | No |
| Liability of the parent | Limited to capital | Limited to capital | Direct |
| Governance | Light | Heavy | Follows the parent |
| Prior federal authorization | No | No | Yes |
| Typical use | Most foreign businesses | Large groups, outside investors | Rare |
A branch needs authorization from the federal Executive Branch before it starts, under the Civil Code, and it makes the parent directly liable. A representative office cannot invoice. Selling into Brazil without any local entity is possible for some exports of services, but it brings withholding taxes on the payments and its own registrations. If you plan to hire people, sign local leases or invoice Brazilian customers regularly, a local entity is almost always the practical answer.
Who does what in a Ltda. owned from abroad
| Role | Who | What they do |
|---|---|---|
| Partner | The foreign company | Owns the quotas and contributes the capital |
| Manager (administrator) | A person who lives in Brazil, who can be a Brazilian appointed by the foreign partner | Signs for the company |
| Attorney-in-fact of the partner | A representative in Brazil | Acts for the foreign partner before the federal tax authority and the Central Bank |
| Technical manager | A licensed professional, only in regulated sectors | Responsible for the regulated activity |
| Registered address | The company's headquarters | Basis for the municipal registration |
Step 2: the partner's documents
Tax numbers
Every individual who is a partner or manager needs a Brazilian individual taxpayer number (CPF). A foreign company that is a partner needs a corporate taxpayer number (CNPJ) through the registry for non-resident entities. The articles cannot name a partner who does not have one yet, so this is where to start.
Documents from the parent
Expect to provide the parent's certificate of incorporation, a current registry extract or good standing, the shareholder or board decision to invest and the identification of the beneficial owners. Each foreign document is usually apostilled under the Hague Convention and translated into Portuguese by a sworn translator.
Powers of attorney
A partner that does not live in Brazil appoints an attorney-in-fact in Brazil by power of attorney. The attorney acts before the Commercial Registry, the federal tax authority and the Central Bank. Give clear, limited powers: to incorporate, to sign the articles, to register with the authorities, to open accounts and to register the investment. Powers that are too broad worry banks. Powers that are too narrow force you to start again.
The manager and residence
The manager lives in Brazil and signs for the company. The manager does not have to be a foreigner or a partner: the foreign company can appoint a Brazilian citizen, or any other resident with the right immigration status. That is often the simplest path, because it avoids the immigration process. Being a quota holder does not require a work visa. Working in the business, or acting as a foreign manager, does require a suitable immigration status, which is a separate process. A manager who is not a partner is named in the articles with the partners’ approval and takes on legal responsibility and signing powers, so choose someone you trust and define the powers clearly. Decide early who will run the company on the ground.
Step 3: registry and CNPJ
With the partner's documents ready, the articles of association are filed with the Commercial Registry of the state where the company has its headquarters. The registry examines the application and issues the company number. The federal tax authority then issues the CNPJ, usually within days once the registry approves. The articles set the corporate purpose, the capital, the partner's quotas and the manager's powers.
Step 4: city, sector and bank
- Municipal registration. Service companies register with the city for the service tax and for invoice issuing. Each city has its own timeline and system.
- State registration if the company sells goods subject to the state tax.
- Digital certificate. Brazilian companies sign tax filings and invoices with a digital certificate issued to the company.
- Sector registrations. Regulated activities need their own registrations before they start. In healthcare, for example, the company registers with the regional medical council and names a technical manager. See our guide to health platforms.
- Corporate bank account. Banks perform enhanced due diligence on companies with foreign owners. Have the ownership chain and the beneficial owners ready.
Step 5: capital and the Central Bank registration
This is the step that decides whether profits and capital can leave Brazil legally later.
- Exchange contract. The foreign partner sends the capital through a bank authorized to deal in foreign exchange.
- Capital in the company. The capital is paid in as set in the articles and recorded in the books.
- Central Bank registration. The investment is reported to the Central Bank by the Brazilian company, through the SCE-IED system. This system replaced the older RDE-IED registry, which many guides still mention. The framework is Law 14,286/2021 and Central Bank Resolution 278/2022. The receiving company and the non-resident investor are identified in the system and the operation receives an identifier. Practitioners report that transfers of US$ 100,000 or more must carry that identifier and that the report is made before the first financial transfer. Thresholds and deadlines have been amended since 2022, so they are confirmed for each case.
- Updates. Each new contribution or capital return updates the registration.
Why this matters in year three. Companies that skip or mishandle the registration usually find out when they want to send a dividend or return capital and the bank cannot document the origin. Fixing it afterwards takes longer than doing it right at the start.
Taxes the Brazilian company pays
The Simples Nacional does not apply
The Simples Nacional is a simplified regime for small businesses. It is generally not available to a company that has an individual partner resident abroad or a company as a partner. A subsidiary whose partner is a foreign company therefore falls outside it, and the realistic choices are the presumed profit regime and the actual profit regime.
An example under presumed profit
For a service company under presumed profit, the tax on the revenue that the company actually earns, such as the fee of a platform, is roughly:
| Tax | How it is calculated | Effective rate |
|---|---|---|
| Service tax (ISS) | On the service price, set by the city | 2% to 5% |
| PIS and Cofins | On revenue (cumulative regime) | 3.65% |
| Corporate income tax (IRPJ) | 15% on a presumed profit of 32% of revenue | 4.8%, plus 10% on the presumed profit above R$ 20,000 a month |
| Social contribution on profit (CSLL) | 9% on a presumed profit of 32% of revenue | 2.88% |
| Total | About 13% to 16% of revenue |
The base is the company's own revenue. If a platform only intermediates and the customer's payment is split so that the seller's share never becomes the company's revenue, that share is not part of the base. How the money flows is therefore a tax question, which is why it is part of the diagnosis. The right regime is a calculation, not a rule of thumb: presumed profit is available up to R$ 78 million of annual revenue and is usually cheaper for high-margin businesses, while actual profit is better for thin margins, large losses or heavy costs that generate credits.
The consumption tax reform
Brazil is replacing PIS, Cofins, ICMS and ISS with a value-added tax split into a federal part (CBS) and a state and municipal part (IBS). 2026 is a test year with symbolic rates, the CBS is scheduled to start in 2027, and the IBS replaces ICMS and ISS gradually until 2033. The tax cost of your model will change during the first years of operation, so ask your accountants to model it, especially for services.
Getting the money back to the parent
There are three ways money normally leaves a Brazilian subsidiary toward the foreign parent, and each is taxed differently. We cover them in detail in a dedicated guide. In short:
| Route | Tax on the way out | Notes |
|---|---|---|
| Dividends | 10% withholding income tax since 2026 (Law 15,270/2025); no IOF | Needs the Central Bank registration and profits recorded in the books |
| Software licence or service fee to the parent | 15% withholding income tax, plus PIS and Cofins, ISS and IOF of 3.5% | Does not reduce the subsidiary's income tax under presumed profit; must follow transfer pricing |
| Capital return | No income tax up to the registered capital; IOF at zero | Updates the Central Bank registration |
To make the difference concrete: for the parent to receive R$ 85,000, the tax cost on the way out is around R$ 9,400 if the money is sent as a dividend and around R$ 32,200 if it is sent as a software licence. The figures depend on the case, and a tax treaty between Brazil and the parent's country can change the withholding. Brazil has treaties with Portugal, the Netherlands, Luxembourg, France and Spain, among others. There is no comprehensive income tax treaty in force between Brazil and the United States.
Run your own numbers. The remittance calculator estimates the tax on dividends, software licences, capital returns and transfer pricing adjustments. Enter the amount, change the rates if a treaty applies, and compare the routes. The result is free to see; the PDF report is for subscribers.
After incorporation
Accounting is continuous
Brazilian companies keep accounting records under Brazilian standards, issue electronic invoices and submit monthly and annual tax and labor filings through the federal systems. A company with no revenue still has obligations, and missing them generates fines. The parent also needs a reporting package for consolidation under its own standards, which can be prepared from the Brazilian books.
Hiring
Employees are hired under the labor code, with payroll charges, social security, severance fund deposits and a 13th salary. Contractors can be engaged as companies, but misclassifying an employee as a contractor is a real labor risk. Immigration for foreign staff is a separate process.
Address and local presence
The company needs a registered address, which is the basis of its municipal registration. Some activities and cities require a physical office for licences, so check before you choose.
Mistakes foreign companies make
- Starting with the incorporation and leaving the tax numbers for later. The articles cannot name a partner without them.
- Sending money before the Central Bank registration. It creates a documentation problem that surfaces when you try to send dividends.
- Assuming the Simples Nacional applies. A foreign partner takes the company out of it.
- Choosing how to pay the parent by habit. A licence and a dividend can differ several times in tax.
- Ignoring the 10% withholding on dividends in the business case. The return calculations should include it.
- One generic power of attorney for everything. Too broad or too narrow both cause delays.
- Treating accounting as a back-office detail. Late filings and inconsistent books come back in due diligence years later.
Checklist before you start
- Answers to the diagnosis questions above.
- Final structure approved by the parent's legal and tax advisors, including home-country effects.
- The manager who will live in Brazil (a Brazilian citizen is allowed), and the attorney-in-fact of the partner.
- Parent documents apostilled and translated; powers of attorney signed abroad.
- Activity codes (CNAE) and the city of the headquarters.
- Sector registrations needed, if any.
- Planned capital, and the bank that will handle the exchange.
- A decision on how the parent will be paid: dividend, licence, capital return.
How we work
Move Advisory is the advisory arm of Move Online, an accounting firm based in São Paulo, founded in 2017. We work in three phases. First, a diagnosis: a report with the structure, the tax regime, the sector rules, the flow of money and the costs. Second, the incorporation: the partner's registration, the Commercial Registry, the city, the Central Bank registration and the follow-up of any sector registration. Third, the operation: accounting, local representation and a registered address in São Paulo. Third-party costs, such as registry fees, apostilles, translations and notary fees, are passed through at cost. See the services page.