The Primerus Paradigm - Spring 2017 Page 54

T H E P R I M E R U S P A R A D I G M | C e l e b r a t i n g 2 5 y e a r s w i t h t h e w o r l d ' s f i n e s t l a w f i r m s

Foreign Investor Requirements to
Disclose Beneficial Owners to Brazil

In light of a recent Normative Instruction
enacted by the Brazilian Federal
Revenue Service (Instrução Normativa
RFB 1.634) ("IN 1634"

), starting

in July 2017, foreign investors (i.e.
any individual or entity residing or
headquartered abroad) investing in
Brazil must disclose their final beneficial
owner(s) to Brazilian authorities.
Under Brazilian regulations, any
entity headquartered abroad and that
owns certain assets in Brazil must be
registered with the Brazilian Federal
Revenue Service. Upon registration, each
entity receives a specific CNPJ (Cadastro
Nacional da Pesso a Juridica) number.

This rule has been in force for years and
it applies to any foreign entity that owns:

(i) real estate, vehicles, aircrafts located or

registered, as applicable, in Brazil;

(ii) bank accounts in Brazil;

(iii) investments in the Brazilian financial or

capital markets; and

(iv) equity in Brazilian companies/entities

(i.e. companies/entities incorporated in
Brazil, including subsidiaries of foreign
entities).

A CNPJ is also mandatory to:

(i) foreign entities with any of the following
activities:

a. cross-border leasing involving

Brazil;

b. affreightment of vessels,

equipment lease and commercial
lease (arrendamento simples); or

c. import of goods without

remittance of payment therefore,
destined to be incorporated as
capital in Brazilian companies;

(ii) foreign banking entities that trade

foreign currency (any currency other
than Brazilian Reais) with banks in
Brazil, receiving and delivering Reais
in the settlement of foreign exchange
transactions.

In addition to the mandatory
registration, such entities will now
have to disclose their respective final
beneficial owner(s). This obligation will

Latin America & Caribbean Brazil

Ricardo dos Santos de Almeida Vieira is
a senior associate at Barcellos Tucunduva
Advogados. He is an expert in corporate law,
mergers and acquisitions, banking, financial and
capital markets and compliance.

Barcellos Tucunduva Advogados
Alameda Itu, 852-9º e 10º andares
01421-001
São Paulo, Brazil

+55.11.3069.9080 Phone

rvieira@btlaw.com.br
btlaw.com.br

Ricardo dos Santos de
Almeida Vieira