segunda-feira, 28 de outubro de 2013

FDI moot and my amazing intern

My beloved UFMG's team, lead by my ex-intern, Ms. Maria Tereza, has been ranked first on the prestigious Foreign Direct Investment International Arbitration Moot competition, held last week in Frankfurt.

I have been one of the team's sponsors. I would love to say that I helped them to draft the memorials, but truth is I didn't.

I have given Maria Tereza some lessons about FDI policy when she was my intern, though. It's got to count for something.

I'm proud! My job is really rewarding sometimes.

Top 25 Teams (Oral Rounds 1-4 and Memorials)
Rank/Points/Team Alias/University

Federal University of Minas Gerais
New York University, School of Law
University of Warsaw
St Petersburg State University
King's College London
University of Buenos Aires
Harvard Law School
University of Belgrade
National Law University,Jodhpur
Lomonosov Moscow State University
Georgetown University Law Center
University Carlos III of Madrid
Gujarat National Law University
Georg-August University of Goettingen
Jagiellonian University
University of Ottawa
De La Salle University - Far Eastern University
Russian Academy of Justice
University of the Cardinal Stefan Wyszynski
Monash University
Judicial Research & Training Institute (JRTI)
Suffolk University Law School
National Law University, Delhi
Kyoto University
University of Latvia
* Winner of the Baker & McKenzie Prize for the Highest Ranked Team as well as winner of Investor State Law Guide Prize for Highest Ranked Team 

terça-feira, 22 de outubro de 2013

Extrajudicial divorce in Brazil

When it comes to getting a divorce in Brazil when one of the spouses is a foreigner you can either go judicial or extrajudicial.

The second options is faster and cheaper, but there are some requisites that must be observed. First of all, you better have the original marriage certificate in hands. The registry office will demand it and you will have no other option than obtaining a duplicate in case of loss.

There is a lot of other information that will be required, as for instance the personal documents of the spouses, documents of the lawyers (yes! Even if it is extrajudicial, the spouses will need a lawyer for assist them!), description of the sharing of assets (only if there is one), among many others.

This is the case of one of our Clients, Mr. J'onn J'onzz. Here follows our advice to him:

Mr.  J'onn J'onzz

I see that you have sent me the translation of the marriage certificate. Do you have the original marriage certificate in portuguese?

I sent you the draft of the Power of Attorney.

Before you sign it, I'll need to fill the information regarding your address, as well as Ms. J'onzz address. I also need to know, one information required by Brazilian law: for how long have you both been separated? 

After we finish drafting the POA and all the documents are duly certified in a public registry office of your country, we'll need to take the documents and the POA to be authenticated at the brazilian consulate or embassy, depending of where you live.

You'll need to fill a form (I send the form attached to this e-mail, and I'll assit you in filling it). You'll also need to bring the original and a copy of both yours and Ms. J'onzz personal documents and pay the value of 20.00 euros at the consulate.

Besides, it is important to note that the extrajudicial divorce is only an option if consensual, i.e., it is mandatory that both parties want to get divorced. Also, it is only possible if you and your wife do not have minor children.

If you have all the documents needed in hands and fulfill all the conditions to be entitled for an extrajudicial divorce, it is preferable do divorce before a registry office since the extrajudicial option might be concluded in only one day.

However, do not dispirit yourself if the extrajudicial option is not possible. You still have the judicial option and, even if it takes longer, it is as effective as the other one.



quinta-feira, 10 de outubro de 2013

Living in Brazil but keeping an income source abroad

From  time to time, I have very interesting discussions with blog readers. Please check this one. You will learn a lot about Brazilian taxation and about international money transferences to Brazil. 

Dear Mr Adler,

With great interest have I heard about you.

As I have plans to immigrate to Brasil but keep working abroad i tried to find out about the brazilian tax system.

Since I will have an average income of above 10.000 USD a month I am curious to learn how much taxes I have to pay and if I can be hold reliable for direct taxes as well as indirect taxes?

Thank you for your time!

Sincere regards,

Daniel Dreiberg,


Thanks for the contact.

 Brazilian taxation would be hard on you: 27,5%.

 Maybe you should incorporate a company abroad, and receive dividends, in Brazil, from this company. This would lower the tax burden to about 15% (taxation over capital gains).

A company in Brazil, under the assumed profits system, would pay about 16-18% in taxes over the total revenues. 

This topic is complicated. Depending on the nature of your work/investments, the Brazilian government might think that the companies are not real, and thus apply the 27,5% taxation, as if it were personal income.



Dear Adler,

Thank you for the nice and helpful inputs in regards to set up an Offshore company.

Nevertheless I think we should compare the possibility to set up a Company in Brasil.

Although we have to pay 15% taxes in Brasil I am sure we are able to deduct several positions from the tax e.g. car, working office in the apartment, travel expenses, health insurance for my wife, as she will be employed as secretary, etc.

The advantage in that model is to have all in hand in Brasil and if necessary we can deal direct with the local authorities. As tax lawyer we would use your expertise.

The questions arising in founding a local Brazilian company are about the bank account.

Will the bank automatically change foreign currencies, e.g USD into local Reals?

Will the bank deduct a fee of 10 cents per USD?

How much of a charge are the transaction fees from Brasil to a foreign bank account e.g Germany?

 How often is a tax declaration necessary and how much is the tax adviser fee?

I believe to compare the advantages and disadvantages in both models we should find the solution which of the two possibilities might work best for me.

Thanks again for your advice

Sincere regards



Dear Daniel,

The 15% tax we talked about (actually, not 15%. A company would pay 16% to 18%) is a simplified rate, applied over the company's gross revenues, only when the company functions under the assumed profits system.

If you wish to keep a more detailed bookkeeping, we shall use the regular tax system. It is basically 34% over net profits, plus a 3,6% VAT over gross revenue. (The reality is far more complicated than that).

The bank will change USD to Reais automatically. A 0,38% tax is applicable over this operation.

The bank does not charge 0,10 cents per USD. But it will charge a conversion fee (sometimes 200 reais). Also, the bank uses the official exchange rate (there are some details about it that we must discuss).

You must hire an accountant, that will cost you about 350,00 per month. The accountant will take care of all tax assessments.

You must collect at least 60 USD every month as social security for the company director.

I hope this overview helps your decision.



See also:

sábado, 5 de outubro de 2013

Investing x importing - Just to prove that I'm a genius in economic and legal analysis

Do you need  proof that this blog is putting some serious effort in interpreting Brazil for you?

On November, 2012, I wrote the article below:

Why do they invest in Brazil if importing seems so cheap right now?

And concluded that:

 Half the world knows that the Brazilian Real is way too appreciated right nowThis is not going to last forever. (Some anticipate an exchange rate crisis somewhere in the next 3 years).

It is 2013 now. I see imports getting more and more expensive, now that the Real has started to come closer to its real value. 

So, when are you going to invest in Brazil?  

*By the way, the genius part may have been an overstatement. Let's just say I read the official economic forecast by the Federal government and always bet on the opposite. 

quarta-feira, 2 de outubro de 2013

Peter Pan firms in Brazil. It is SIMPLE

The new report about  Brazil made by "The Economis" (the one that is basically reverting everything good they have said about Brazil a few years ago) mentions a curious expression: "Peter Pan firms in Brazil".

The expression was not foreign to me, but I hadn't heard it in years.

I think Economist wanted to describe the small and medium-sized business that are under the "SIMPLES" regime of taxation.

SIMPLES is a tax regime that allows for a total tax burden as low as 5% over the gross revenues of the company. The taxation increases as a percentage in proportion to the monthly sales/income.  That is, a small business selling 1 thousand dollars a month would pay 5%, and a medium company selling 750 thousand reais a month would pay 12%. And so on.

In view of this tax escalation, many people choose to keep their companies small (very small, as in a hot dog stand), just to avoid any increase in taxation. Such companies never grow, and thus the Peter Pan metaphor.

I write little about this because COMPANIES WITH PARTNERS THAT LIVE ABROAD CANNOT JOIN THE SIMPLES TAX REGIME. Since most of my work is helping foreigners who want to invest in here,  I choose to focus on the more traditional tax regimes (assumed profits system  and real profits system).

On top of that, I despise SIMPLES, because I see it as a kind of government fraud. The system was designed to keep poor people poor. The Peter Pan effect is no accident.

But, since the expression caught my eye and since the number of foreigners who choose to move to Brazil is increasing, I thought it would be a good idea to mention SIMPLES, in spite of its problems.

terça-feira, 1 de outubro de 2013

Can Brazilian government shutdown, just like America's?

I wish it could! 

But, actually, it is not really possible. In theory, yes, but never in reality.

Brazilian Federal government can issue emergency acts (Medidas Provisórias) to allow pre-budget expenses. (Well, in reality, it cannot, at least according to the law. But it has been getting away with it pretty well).

Also, there are provisions that allow for the execution of last year's budget in case a new budget is not in place.

And, finally, there is little political interest in not approving a budget, since congressmen usually include large expenses that benefit their constituencies.

Nevertheless, I would like to see the Federal government go "on strike" for a decade or so. Business would become much easier in Brazil.

NGOs and protection of intellectual property in Brazil. Real legal advice by Pigs in Maputo comic strips

I love "Pigsinmaputo.". It is a comic strip series published by Iris,  a Brazilian PHD who has an unorthodox life style.

Check this one. My comments on the side.

The lawyer she has met is very good! He mentioned some very important topics.

NGOs in Brazil:

i) there are several ways to organize a NGO (which in our acronym is called ONG). But in any of them, extra care with the bylaws (articles of association) is required. There are several acts regulating NGO's activities, as well as the statutory objectives that will make a conventional association become a NGO.
ii) the tip about tax exemption hits the bull's eye. Tax exemptions are only granted to previously selected NGOs. To make it to the list, it is necessary to apply the resources in Brazil. Most of the time, at least.


i) a GOOD CONTRACT. That says it all. There is a considerable number of acts and regulations about intellectual property in Brazil, covering art, software, books, etc. But few lawyers know about it. These regulations often demand mandatory clauses to be inserted into such agreements, or, on the other hand, prevent certain unfair clauses to be upheld by courts. A GOOD CONTRACT, in this sense, is not only comprehensive, but also follows Brazilian rules.

ii) Theft of intellectual property is a crime! The creator/publisher can fight against it, and WIN. Piracy is a huge problem in Brazil, but there is still hope.

Finally, the last sentence sums up all I have been trying to say in this blog. If you are coming to Brazil, YOU SO NEED A LAWYER, AND DIDN'T KNOW IT!

PS: I promises you I didn't ask Iris to write this specific strip. But I'm thinking about asking her to draw others like it.