Required Registrations for Foreign Capital Contributions in Brazilian Companies

If you own a Brazilian company, you’ll need to make sure that all foreign investments are properly registered. The Central Bank requires two types of registrations: one for the Brazilian company (updated for each investment) and another for each investor.

Brazilian companies receiving capital from foreign shareholders must file an electronic registration known as the Registro Declaratório Eletrônico or RDE. Direct foreign investment is called Investimento Estrangeiro Direto or IED, so you may see this written as RDE-IED.

The registration process is completed on the Central Bank’s website, but it’s not as simple as it sounds. In fact, most companies hire service companies specializing in Central Bank filings to complete their filings.

There are also rules requiring that you keep this electronic registration up to date. Every time a Brazilian company receives money from a foreign shareholder (e.g., additional capital contributions), it must update its RDE-IED within 30 days.

The second type of registration applies to the foreign investor. If the investor is a foreign individual, then they’ll need a CPF (Brazilian taxpayer ID for individuals). If the investor is a foreign entity, they’ll need a CNPJ (Brazilian taxpayer ID for companies) and they must file a Cadastro Declaratório de Não Residente (CDNR) with the Central Bank before they can send funds.

Mistakes on these registrations or forgetting to file is a big deal. It can prevent you from making necessary investments or even result in fines up to BRL$250,000 (approximately US$50,000). Our advice? Get it right the first time and get it done on time.