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 I've learned a few things from spending time and doing business in Brazil, most importantly that Brazil is not the USA. While this is obvious, I say this because it's easy to forget. If you spend all your time comparing how things are done in Brazil to how things are in your own county, the USA for example, you'll end up feeling frustrated most of the time, rather than enjoying the things that are truly amazing about this country.
So, while dong business in Brazil can at times be difficult, the rewards can be tremendous if you are willing to take the time to understand the culture, how things work, and learn to adapt to a different set of rules.
For example, driving in Brazil is nothing like driving in the USA. In fact driving in Brazil can be downright chaotic by comparison. It often seems as if there are no generally accepted rules of the road by which you are expected to drive. It's like playing a video game, an adventure in which you never know what is going to happen next, and which requires your complete attention and absolute vigilance. But, having learned to accept how things are, and to adapt, rather than being frustrated by the reality that driving in Brazil is not the same as driving in the USA, you can come to appreciate the experience of driving in there, and learn to treat every driving experience as an adventure, which it usually is.
This said, sometimes it's helpful to compare how things are done in one country with how they are done in another, to give you perspective and provide you with a roadmap by which you can anticipate the turns, twists and obstacles you may encounter along the way. It's like being in line at Disneyland. It's not so much about how long the line is, or even the fact that you have to wait in it. After all, this is what you expected when you decided to participate in one of America's premier cults of consumerism. What you really want to know is how long you're going to have to wait in line. Well, Disneyland, at least the time I was there, has cleverly dealt with this problem by posting signs along the way telling you how much longer you will need to wait from that point on, thereby managing your expectations. So, it is with this idea in mind that I've embarked upon our discussion of doing business in Brazil. To help you, the reader, and potential investor in Brazil, manage your expectations, to tell that there is a line in which you will have to wait, suggest how long you may have to wait there, and to let you know that while the line may be long, the ride at the end is, more often than not, worth the wait.
Well, at this point in our discussion of doing business in Brazil, we're ready to discuss some of the steps you will need to take to start a new company through which to operate your business, buy a business or invest in Brazil. For comparison sake, let's say you wanted to form a company in the USA. Our friends at the World Bank, who have determined that the USA ranks third, right behind Singapore and New Zealand in terms of ease of opening a new business, boil this process down to five rather easy steps, each taking one day, some of which can be performed simultaneously, so that you can be up and running in a week or less. These steps include registering the business name and filing the certificate of incorporation or formation with the secretary of state in the state in which you are forming your company, and obtaining an employer identification number. If you plan to have employees, you will need to register for sales tax, unemployment insurance and arrange for workers compensation insurance. That's pretty much it, unless you need to obtain specific licenses for your business, or you've decided to form a limited liability company, or LLC, in the state of New York, which absurdly requires you to publish notice of the formation of your LLC in two newspapers over a period of six weeks within 120 days of formation.
Now let's say that you've decided to form a Limitada, or Ltda., in Brazil, more or less Brazil's equivalent of an LLC, through which to do business. The World Bank divides this process into 17 steps, which together can take up to 152 days. As discussed in our previous article, the steps and length of time required to complete each step may differ from state to state, but the process is essentially the same across Brazil. One reason the process can take so long is that the filing requirements are spread out across various governmental agencies. For instance, to find out if the name you want to use for your company is available, you must go to the State Commercial Registry Office. But to form the company, you need to file what is know as the Contrato Social, or Social Contact, essentially the equivalent of the articles of incorporation and the articles of association, with the Commercial Board of Trade or the Register of Civil Companies, depending on whether the company's activities will be civil or commercial. To do this you, as one of the two or more quotaholders of your Limitada, must sign the Social Contract to register your equity interest in the company. But you cannot sign on your own behalf. And why is this you ask? Well, your signature cannot be verified in Brazil, since you have no legal status there. So, you will need to grant a power of attorney, or POA, to the person, generally a lawyer, although an accountant can perform the same function, but for obvious reasons using an accountant to do legal work is generally not recommended, who will draft and file your Social Contact with the appropriate governmental agency. To complicate things even more, the POA must be signed and notarized in the USA, or your country of origin, and then legalized or consularized by the Brazilian Consulate which has jurisdiction over the state in which you reside. And to complicate things even further, most Brazilian Consulates, for whatever reason, only accept postal money orders to pay for the fees involved. That's right, no checks (very un-Brazilian), not even bank or certified checks, no credit cards and no cash. In any event, the legalized POA must then be translated by what is know as a sworn translator in Brazil and registered before the public notary there.
Following this you need to register with the Office of Federal Revenue of the Finance Ministry, to obtain a tax identification number, known as a CNPJ number, which also registers employees with the National Institute of Social Security. You will also need to register with the Tax Authorities of the state in Brazil in which you have formed your Limitada. Needless to say there are several other steps, including getting authorization to print invoices and receipts, obtaining an operational permit and registering employees with in the unemployment insurance program. You may even be required to obtain a Fire Brigade license from the state in which you have formed your Limitada. But, I will not elaborate on the rest of the steps at this time, since I wouldn't want to lose the few readers who have stuck with me this far. However, if you would like to review all the steps, and the estimated time required to complete them, you can do so by taking a look at the World Bank's Doing Business Website at www.doingbusiness.org. Next time we'll introduce you to someone who can help you coordinate and facilitate all the various tasks you'll need to complete to get your business up and running, from obtaining permits and import and export licenses, to simply helping you maneuver through the various levels of governmental bureaucracy in Brazil. Robert Eugene DiPaolo is the co-founding managing director of Fidelis Group do Brasil Consultoria, Ltda., a legal/business consultancy specializing in assisting non-Brazilians who want to do business or invest in Brazil. He can be reached at
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By the way stop comparing things with USA, as just because you may be from USA rest of all the gringoes in Brasil are not from USA. And USA is by all standard has lost its respect, and position so that it can be compared as a bench mark, for any thing.
Just being compared to USA is insulting.
Poor chaps, they dont even realise that the whole world is laughing on them.
Coming back to the note above, again comparison wont help to describe, if you are going to compare just 2.
Its apparent, you are targeting your USA origin clients through this note. You should title your note as "Advt"