One confusion comes up in almost every conversation we have with a foreigner planning to start a business in Brazil: they assume that opening a company and getting a residency visa are the same process, tied to the same R$500,000 threshold discussed everywhere online. They aren’t. You can own and legally operate a Brazilian company as a non-resident foreigner without ever applying for investor residency and, separately, you can qualify for investor residency through a company investment without that being your first or only Brazilian business. Untangling these two tracks, company formation and immigration status, is the first real decision point for anyone starting a business here.
Track 1: Owning a Brazilian company (no residency required)
A foreigner, resident or not, can be a shareholder or quotaholder in a Brazilian company. What Brazilian law does require is that the company have a legal representative resident in Brazil with a power of attorney (procuração) to act on the foreign owner’s behalf for administrative, tax, and legal purposes,\ someone with a Brazilian CPF who can be reached and held accountable locally. This representative doesn’t need to be a partner in the business or hold any equity; they can be your lawyer, acting purely in a representative capacity.
This means a foreign entrepreneur who wants to own a Brazilian company but has no interest in personally moving to Brazil, or isn’t ready to commit to a residency-linked investment threshold, has a fully legal path to do so.
Track 2: Company investment as a path to residency
If you do want Brazilian residency and plan to fund it through business investment, that’s the separate route governed by Resolução Normativa nº 13/2017, a minimum of R$500,000 invested in a Brazilian legal entity (or R$150,000 for qualifying priority-sector or regional investments). This is where “start a business” and “get a visa” genuinely converge, but it’s worth being precise: the R$500,000/R$150,000 threshold is an immigration requirement, not a company formation requirement, you can start a Brazilian company with far less capital if residency isn’t part of the goal.
Choosing a legal structure
The two most common structures for a foreign-owned Brazilian business are:
- Sociedade Limitada (Ltda.) — the standard limited liability company structure, requiring at least two partners (quotaholders), who can be individuals or legal entities, foreign or Brazilian.
- Sociedade Limitada Unipessoal (SLU) — a single-member limited liability company, introduced by the 2019 Economic Freedom Law, which allows one person (including a foreign individual) to own 100% of a Brazilian company without needing a second partner. This has become the default choice for a solo foreign founder who previously would have needed a nominal second partner just to satisfy the old two-partner rule.
Both structures limit the owners’ personal liability to their capital contribution, an important protection compared to operating as an unincorporated individual (empresário individual), which exposes personal assets directly.
The registration sequence
- Obtain a CPF. Even a foreign individual who will never live in Brazil needs a CPF (Brazil’s individual taxpayer registry number) to be a partner or quotaholder in a Brazilian company. This can be done from abroad through a Brazilian consulate or, in some cases, entirely online.
- Draft and register the articles of association (contrato social) with the appropriate commercial registry (Junta Comercial) for the state where the company will be based.
- Obtain the CNPJ (Cadastro Nacional da Pessoa Jurídica) from the Receita Federal, Brazil’s equivalent of a corporate tax ID, and the number that will appear on every contract, invoice, and bank account the company holds.
- Register municipal and state licenses as applicable to the business activity, a municipal operating license (alvará), and, for businesses that sell goods rather than only services, a state tax registration (inscrição estadual).
- Register the foreign capital with the Central Bank of Brazil (RDE-IED). This step is specific to foreign investment and is what allows the company to later legally remit profits abroad or repatriate capital, skipping it, or doing it incorrectly, is a common and expensive mistake that surfaces years later when a foreign owner tries to send money home.
- Open a corporate bank account. Brazilian banks apply their own compliance screening for foreign-owned companies, and this step alone can take considerably longer than the registration steps above, plan for it accordingly.
Tax regime: a decision that shapes everything else
Once the CNPJ exists, the company needs a tax regime. Simples Nacional, Brazil’s simplified tax regime for small businesses, is generally not available to companies with foreign shareholders, a detail that surprises many foreign founders who assumed the “simple” option would apply to them by default. That leaves two main regimes: Lucro Presumido (presumed profit, calculated on a fixed percentage of revenue, simpler to administer) and Lucro Real (actual profit, based on real accounting results, generally required above certain revenue thresholds or for specific activities). The right choice depends on your margins, sector, and revenue projections, and it’s worth deciding deliberately rather than defaulting to whichever your accountant suggests first.
Franchises and existing-business acquisitions: a note
If you’re entering the Brazilian market by acquiring an existing business or a franchise operation rather than starting from scratch, the sequence above still applies, but it needs to be paired with proper due diligence on what you’re buying: the target company’s tax and labor liabilities, existing contracts, and, for franchises specifically, the franchise agreement’s territory, royalty, and termination terms. An investment that looks clean on paper can carry liabilities that transfer with the company, and this is exactly the kind of review that should happen before capital moves, not after.
Hiring in Brazil once the company exists
A Brazilian company, once formed, can hire employees under the CLT (Consolidação das Leis do Trabalho) framework, and can also sponsor a work visa for a foreign employee it wants to bring in specifically, a separate process from the investor residency route, relevant if you’re planning to relocate key foreign staff alongside your own move.
FAQ
Do I need to live in Brazil to own a Brazilian company? No, a non-resident foreigner can own a Brazilian company through the legal representative structure described above; residency is a separate, optional decision.
Is R$500,000 the minimum to start any business in Brazil? No, that figure is specifically the threshold for the investor residency visa. Company formation itself has no minimum capital requirement tied to immigration; smaller businesses are formed with far less.
Can I be the sole owner of a Brazilian company as a foreigner? Yes, through the Sociedade Limitada Unipessoal (SLU) structure, without needing a second partner.
How long does company formation typically take? Registration itself (contrato social, CNPJ, licenses) can often be completed within a few weeks with organized documentation; opening a corporate bank account is frequently the longest step due to bank compliance procedures for foreign-owned entities.
Can my Brazilian company sponsor my own work visa? This depends on the specifics of your role and ownership structure, a foreign owner is generally better served by the investor residency route than a self-sponsored work visa, but this should be assessed case by case.
Planning to start or buy a business in Brazil? Souza & Santos Advocacia handles company formation, due diligence on existing businesses and franchises, and the residency filings that often go alongside them — from João Pessoa, in English and Portuguese.
Souza & Santos Advocacia Av. Gov. Flávio Ribeiro Coutinho, 500, Sala 927, Manaíra, CEP 58037-005, João Pessoa – PB, Brazil contato@souzaesantosadvocacia.com.br · (83) 99644-2180