Goodbye Shelf Companies

Years ago, it was common for foreign businesses to buy shelf companies in Brazil. While buying a shelf company was significantly more expensive than forming a new entity, the time saved was often worth the added cost. Well, not anymore.

There’s really no need for shelf companies today because new entities can be formed quickly. Long gone are the days of waiting weeks if not months to get your company tax ID (CNPJ) and register the new company with the trade board (junta comercial). Now, a company in São Paulo, Rio, and many other parts of Brazil can be formed in days.

In fact, it’s possible that buying a shelf company today could actually take longer than forming a new Brazilian entity. Both acts require registration with the trade board, but at least in São Paulo, the time it takes to file an amendment to the Articles of Incorporation is often greater than filing anew.

But just because the formation process is quick doesn’t mean you’ll have your company right away. First, you’ll need to decide on the entity type and ownership structure. Then, you’ll have to provide documents, and lots of them. And all of these documents must be notarized, apostilled, and translated into Portuguese.

Doing business in Brazil doesn’t need to be complicated. The key to success in forming a new company is planning ahead and staying organized. Particularly for foreign owners, getting the documentation right the first time can save a lot of time - not to mention unnecessary headaches.