BRAZIL – HIGHLIGHTS – FOREIGN COMPANIES PARTNERS OR SHAREHOLDERS OF BRAZILIAN COMPANIES
In our last report we mentioned that in the cases in which the foreign company wishes to become a partner or shareholder of a Brazilian company, “DREI” Normative Instructions 34/2017 and 38/2017 must be observed.
“DREI” = DEPARTMENT OF BUSINESS REGISTRY AND INTEGRATION (“DEPARTAMENTO DE REGISTRO EMPRESARIAL E INTEGRAÇÃO”)
In response to requests from some clients and investment funds interested in investing in Brazil, we have made some highlights on the aforementioned normative instructions.
“DREI” Normative Instruction nº 34/2017: provides for the filing of acts of companies, companies or cooperatives involving foreign residents and domiciled in Brazil, individuals, Brazilian or foreign, resident and domiciled abroad and legal entities with headquarters abroad. The new of this normative instruction is transcribed in its art. 2 – In the mandatory granting of power of attorney by resident member and domiciled or with head office abroad to the natural person legally resident and domiciled in Brazil as its representative with indeterminate term.
“DREI” Normative Instruction nº 38/2017: changes the Manuals of Registration of Individual Entrepreneur, Limited Company, Individual Company of Limited Responsibility (“Empresário Individual de Responsabilidade Limitada” – “EIRELI”), Cooperatives and Joint-Stock Company approved by Normative Instruction nº 10, of December 5th , 2013.
One of the main contributions of this normative instruction is the express recognition that these can be represented by legal entities. As stated in the new Manual, in its item 1.2.5:
“1.2.5 CAPACITY TO BE “EIRELI’S” REPRESENTATIVE
You can own “EIRELI”, as long as there is no legal impediment:
(a) A person over 18 (eighteen) years old, Brazilian or foreign, who is in full possession of the civil capacity;
(b) The emancipated minor;
(c) National or foreign legal entity.