Brazil Counsel

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Single-Member LLCs Are Now Allowed in Brazil

For years, it was part of the spiel. Every time a new client mentioned forming a company in Brazil, it would inevitably lead to a discussion about ownership requirements.

You’ll need to have at least two owners. It doesn’t matter if it’s a limitada (similar to a limited liability company) or a sociedade por ações (similar to a corporation). Both of these popular types of entities must have two or more owners.

Well, those days are gone. All of that changed with the creation of the EIRELI (Empresa Individual de Responsabilidade Limitada). It was the first entity type in Brazil to allow for a single owner with limited liability. But while the EIRELI was helpful for some, it created new challenges for foreign investors.

Then, last month, everything changed again. And this latest move is a game-changer, especially for foreigner entrepreneurs. With the creation of a single-member limitada known as a sociedade limitada unipessoal, both Brazilians and foreigners can now easily form companies in Brazil with only one owner and without any minimum investment.

Sure, starting a company in Brazil still presents plenty of obstacles for foreigners. For example, all entities must have an administrator who is a resident, and foreign entities and individuals must have legal representatives who are residents. But gone are the days when “straw men” are needed to hold 0.01% of a company just to fulfill archaic legal requirements.

Go it alone or bring a partner along for the ride; the choice is now up to you. The good news is you finally have options.