Why’s It So Hard to Find an Administrator?

One of the first challenges that foreigners face when starting a business in Brazil is the requirement to have an administrator. Every company must have one, and that person must be a resident in Brazil.

At first blush, the requirement sounds like the Brazilian equivalent to the rule that companies in the US must have a local registered agent for service of process. But it’s not that simple.

An administrator in Brazil plays a very different role. For example, the articles of incorporation that are filed with the state Trade Board should be signed by the administrator. The administrator may also sign tax filings and other corporate documents on behalf of the company.

The job of the administrator is not limited to signing documents though. Administrators can be (and often are) held liable for certain company debts.

Imagine what happens if a company fails to pay taxes. The government will go after the company, but the tax authorities may also go after the administrator. Too often we hear stories of administrators who can’t sell their homes because they have a lien on the property as a result of unpaid company taxes.

In the past, law firms and accounting firms traditionally played the role of administrator. Not anymore. The risk is simply too great.

As a result, specialized companies are offering administrator services. Their fees and whatever other requirements they have are reflective of the risk they’re assuming. Just know that you’ll be paying a pretty penny.