quinta-feira, 27 de junho de 2013

Day trading and capital gain tax in Brazil

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Dear Adler,

I am planning to immigrate to Brazil.
Therefore, i am looking for an experienced lawyer in Minais Gerais who is able to assist me with obtaining a permanent investor visa and setting up a brazilian company.

I would like to ask you if you could have a look at a very brief description of my plans to determine whether my plans will allow me to be granted a permanent investor visa and also future extensions of my Visa.
Best regards,


Dear Mr. Kurt,

Thank you a lot for your contact.

The company usually takes 3 months to be running. The Visa sometimes takes up to 3months. So, you might consider come once as a Tourist, then go back to you country and only then return with the permanent Visa. 

Please send me more details on your business plan. I will be glad to review it. 

Warm regards, 

Dear Adler,

Thank you for your reply.

I currently live in the Netherlands and work as a daytrader ( through my corporation) in stocks on the stock exchanges of the united states ( Nasdaq & Nyse).
 I work alone and I have no employees.

In Brazil these activities are taxed at 20% ( and I believe 15% if the position is held for more than 1 day) .

I would be able to setup a corporation in Brazil ( to be allowed an investments visa) with 1 or 2 assistants, getting licenses, arranging accountants who are familiar with this matter… But this is would not be what I am looking for.

I would like to day trade alone as a “pessoa fisica” , pay the tax of 20%, no assistants…no license etc.

In this case, to be able to be granted residency in Brazil I will need to setup another small business.

Since I spend most of my time trading the stock market, I would like to invest in something with small risk and which doesn’t take a lot of time for me to manage… but which will allow me to be issued a permanent residency visa (and future extensions) and comply with Brazilian law.

A few examples:
1) I would buy a store for R$ 150,000 and I would hire 1 or 2 employees to sell food & drinks there (maybe only a R$ 20,000 investment)
2) I would buy a store for R$ 150,000 and I would hire 1 or 2 employees and setup an internet cafe (maybe a R$ 30,000 investment)
Would such kind of a simple business be granted a permanent residence visa + extensions, while there are only 1-2 employees and the risk is pretty low ( since I could always sell the store)?

Adler, I hope that you feel what I am aiming at. If you have any other suggestions for me which would also allow me to reach my goal, then I would really appreciate.

Thank you and best regards,



Dear Kurt, 

I understand what you say. 

Initially, I'd not recommend you to trade as a "pessoa física, since you would be subject to personal taxation as a Brazilian citizen. The total taxation might be higher than the 20% you mentioned.

You have two options, then:

Invest as a foreigner, through a special foreigners account, which would be managed by a Bank. You would have total liberty. The additional cost would be the bank commission. Nonetheless, you would, as a foreigner, be eligible to some tax incentives, such as near 0% taxation when investing in Government bonds. 

Or, your company in Brazil could operate in the stock market (even if the main business is a cafe). I must calculate the precise taxation, but it could be lower than 20%. 

Please give me your comments on those ideas. 

Warm regards, 


Hi Adler,
I wasn’t aware of the fact that the total taxation could be higher if I would trade as a ‘pessoa física’.
Investing as a foreigner would probably not be an option for me, since I am doing a lot of transactions everyday through a special brokerage platform in the USA and trading to a special foreigner account would probably have less possibilities to trade and more restrictions.

Also, I wonder if it is possible to Invest as a foreigner, while being a resident in Brazil, because I am really planning to live in Brazil…

The other option sounds really appealing to me.

However, I hope it will not be a problem if the monthly profit of the café would be R$ 500, while the monthly profit of the stock market operations will be R$ 8000 or more…

Here in the Netherlands, the tax authorities would immediately force me to change the main business to stock market trading.

However, if it would be possible than I would be very interested.

Especially since you did mention that the rate would be lower than 20%.
While I thought that the corporate tax is approximately 15(tax)+10+9(social contributions)=34%.

I tried to find the exact percentage on a government website since I believe that the social contribution part is dependent on the sector, but i wasn't able to find the right sector….

Thank you and best regards,



Dear Kurt, 

Regarding your last comments: 

In fact, Brazil has a very simplified regimen for foreigners who wish to deal in Brazil. I understand that this would make you compromise some of your capital in Brazil for a while, though.

It is possible to invest as a foreigner while living in Brazil, as long as the money is originally registered as belonging to a company in Netherlands. If you live permanently in Brazil, you cannot trade as a foreigner forever.

On the main business topic: in Brazil the regulation is much simpler. You may either do the investments as a lateral activity of your firm or just add it to the company's activities.

Finally, the taxation rate would be 34%, but the calculation method makes the real taxation drop way below than that, since the taxable amount is not the gross income, but the adjusted income, after expenses, etc.  On the other hand, investments in the stock market may also be taxed on the source, that is, at a fixed rate, regardless of the profits of the company. It is a complicated issue.

Also, there is the assumed profit taxation system, which would allow you to pay taxes over your gross revenue, instead of over net profits. In many cases, this ends up saving money for the company. 

At this topic, I believe the best thing to do would be for you to look for a Legal Opinion covering all of your options, including tax calculations.

Warm regards, 


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