Central Bank Eases Declaration Requirements for Foreign Investors

Sending money to Brazil became a bit easier this year for foreign owners of Brazilian companies. The Brazilian Central Bank made a significant change on December 31, 2022, regarding the declaration requirements for companies receiving investments from abroad.

In the past, Brazilian companies were required to register all foreign direct investment with the Brazilian Central Bank within 30 days of receiving the funds. As we emphasized in our blog article Registrations for Foreign Capital Contributions in Brazilian Companies, the penalties for non-compliance or late filing could reach up to BRL$250,000 (approximately US$50,000).

However, the introduction of Central Bank Resolution No. 278 significantly changed these requirements. Now, the obligation to inform the Central Bank of foreign direct investment applies only to transactions equal to or greater than US$100,000. This development is particularly beneficial for smaller companies and investors who make smaller capital contributions, as it reduces the administrative burden associated with the process.

This change to the Central Bank filing requirements is an indication of Brazil’s efforts to create a more business-friendly environment, particularly for foreigners. By simplifying the regulatory requirements for foreign investment, Brazil is opening up new opportunities for growth and investment, especially in sectors where smaller investments are common.

There’s also another change worth noting. The system for registering foreign investment, previously known as RDE-IED, has been rebranded as SCE-IED. For more information about what the Brazilian government considers as foreign direct investment, refer to their guide on declaring foreign direct investment.