Sensitive Disclosures for Company Owners

Gone are the days when companies and their owners could hide their true identities and assets. Thanks to the Brazilian government’s commitment to transparency, beneficial ownership and financial disclosures are now mandatory. So if it makes you uncomfortable, perhaps Brazil isn’t the place for you to invest.

In 2016, the federal tax authority (Receita Federal) first published its regulation requiring that both Brazilian and foreign companies disclose information about their beneficial owners. Over the years, the regulation has been amended, most recently in 2022. Now, you need to reveal who ultimately owns and controls your company.

Banks have also ramped up their compliance requirements. They want to know more about the individuals and companies sending money to and from Brazil. But what they ask for is generally more sensitive. For example, they may request copies of tax returns or bank statements that demonstrate sufficient funds for a proposed investment. They may also want assurances that the funds originate from licit sources.

Both the beneficial ownership filing and the financial document requests serve a similar purpose: to prevent money laundering and other illegal activities through public and private disclosures. There’s no more privacy no matter your legal structure or the company’s jurisdiction. To do business in Brazil, you must disclose.

Before you begin operating in Brazil, think through the disclosures you’ll make to the Brazilian government and financial institutions and be certain you’re willing to make them. Depending on your level of comfort, you might just rethink your decision to do business in Brazil.