Time to Capitalize Your Brazilian Company

It’s that time. Your Brazilian company is running low on cash and it needs capital. Just send an international wire transfer and that’s it, right? Wrong.

Foreign capital contributions in Brazil are relatively straightforward, but they need to be documented properly. This generally means amending the Articles of Incorporation, closing an exchange contract, and updating the registrations with the Central Bank.

Before sending a wire, make sure the transfer is originating from the proper bank account. The money should always be sent from the shareholder’s foreign account. You’ll either need to coordinate the transfer with the company’s Brazilian bank or with an exchange broker.

If your Brazilian company is a limitada, the funds you send will increase the company’s capital. Therefore, this change will need to be reflected in the company’s corporate documents filed with the local trade board.

Assuming you’re sending foreign currency, the Brazilian company will need to convert the funds to reais when they reach Brazil. This process is completed by the bank’s exchange desk or a broker who specializes in currency exchange transactions. If the amount being transferred is greater than US$10,000, an exchange contract must also be signed.

Finally, like all international investments, the funds need to be registered with the Brazilian Central Bank. This is done by updating the RDE-IED, an electronic registration of direct foreign investment, within 30 days of the transaction.

Before you capitalize your Brazilian company with a foreign capital contribution, make sure you’re prepared for all that’s entailed.