In accordance with the legislation in force as well as with the Brazilian Central Bank’s regulations, certain obligations must be observed by legal entities headquartered in Brazil with foreign capital and by individuals or legal entities resident, domiciled or based in Brazil with capital abroad.
1 – Periodic Declaration of Direct Foreign Investment (“IED”)
Companies that are recipient of IED with net equity or total assets equal to or greater than R$ 250,000,000.00 (two hundred and fifty million reais) must report their information quarterly, through Economic-Financial Statements, according to the terms below:
• Base date of 12/31: until 03/31 of the subsequent year
• Base date of 03/31: until 06/30
• Base date of 06/30: until 09/30
• Base date of 09/30: until 12/31
Companies that are recipient of IED with net equity or total assets lower than R$ 250,000,000.00 (two hundred and fifty million reais) must report their information in the following period:
• Base date of 12/31: until 03/31 of the subsequent year.
If the deadline coincides with a day without activities at the Central Bank, it is extended to the first subsequent business day
Penalties:
Failing to present or submitting the required information to the Brazilian Central Bank after the deadline, or the submission of false, incomplete or incorrect information, will subject its responsible to the payment of a fine.
2 – Quinquennial Census of Foreign Capital in Brazil
The Quinquennial Census (for base dates of years ended in zero or five) aims to collect information related to foreign capital in the Brazilian economy.
It is mandatory for:
• all legal entities headquartered in the country, with direct participation of non-residents in their corporate capital, in any amount, in 12/31/2020;
• all investment funds with non-resident shareholders, in 12/31/2020, through its administrators; and
• all legal entities headquartered in Brazil, with a total balance of short-term commercial credits (payable in up to 360 days) granted by non-residents, equal to or greater than the equivalent of US$ 1,000,000.00 (one million dollars), on 12/31/2020.
Deadline:
07/01 to 08/15 (until 6pm)
If the deadline coincides with a day without activities at the Central Bank, it is extended to the first subsequent business day
Penalties:
Failing to provide or submitting false, incomplete, incorrect or outdated information will subject the violators to a fine.
3 – Brazilian Capital Abroad (“CBE”)
CBE are amounts of any nature held outside the country by individuals or legal entities that are residents, domiciled or based in Brazil. For example: assets, rights or financial instruments, currencies, deposits, real estates, corporate interests, stocks, securities, commercial credits, etc.
The declaration of the abovementioned capital must be carried out on a yearly or quarterly basis, depending on the amount of total assets, if equal or superior to:
• Annually: US$ 1,000,000.00 (one million dollars), or equivalent in other foreign currencies on the base date of 12/31; or
• Quarterly: US$ 100,000,000.00 (one hundred million dollars) on the base dates of 03/31, 06/30 and 09/30.
Deadlines:
•Annual declaration (base date 12/31): 02/15 to 04/05 (until 6pm)
•Quarterly statement (base date 03/31): 04/30 to 06/05 (until 6pm)
•Quarterly statement (base date 06/30): 07/31 to 09/05 (until 6pm)
•Quarterly statement (base date 09/30): 10/31 to 12/05 (until 6pm)
If the deadline coincides with a day without activities at the Central Bank, it is extended to the first subsequent business day
Penalties:
Failing to present or submitting false, incomplete or incorrect information may result in fine.
4 – Changes in the corporate capital
The occurrence of an event that changes the foreign investor's participation requires the updating of information, for example: (i) when a new non-resident investor makes a capital contribution in the receiving company; (ii) when there is a capital increase or reduction by a registered non-resident investor; (iii) when a non-resident investor, for any reason, becomes no longer a partner of the company.
Deadlines:
30 days from the date of the event. In the case of changes linked to foreign exchange transactions or international transfers in reais, the thirty-day term begins on the date of liquidation of the foreign exchange transaction or of the transfer.
Penalties:
Failing to present or submitting the required information to the Brazilian Central Bank after the deadline, or the submission of false, incomplete or incorrect information, will subject its responsible to the payment of a fine.
Should you have any question or need any assistance regarding these or other legal obligations, please do not hesitate to contact us.
Best regards,
SAEKI ADVOGADOS