What's With All the Certificates

In Brazil, performing due diligence involves obtaining certificates from various government offices. These certificates are akin to background checks or property lien search reports in the United States, providing critical information about individuals, companies, and properties.

The federal tax authority, Receita Federal, issues certificates confirming if a person or entity has outstanding federal tax debts. Similarly, state and municipal governments provide certificates for local taxes. This system allows potential investors or partners to verify the financial and legal standing of their counterparts.

Certificates also cover civil lawsuits, creditor claims, and labor matters, among other areas. For instance, the Certidão de Distribuição Cível reveals if an individual or entity is involved in any ongoing civil litigation. Labor courts issue certificates confirming whether there are any labor-related claims against a company.

When buying real estate in Brazil, you’ll want a number of certificates. The matrícula provides detailed information about a property, including its ownership history and any existing liens. The Certidão de Dados Cadastrais offers data from the municipality, such as appraised value and tax information.

Obtaining these certificates can be cumbersome, but they play a crucial role in protecting investments. Whether you’re buying a home, forming a business partnership, or investing in a new venture, these certificates play an integral part of the due diligence process and provide peace of mind by confirming the financial and legal integrity of the parties and assets involved.