All foreigners who own companies in Brazil or that invest in the Brazilian Stock Market, or even that own real estate in Brazil, must have a local representative.
Starting July, 2017, this representative will be more subject to government scrutiny and, at the same time, will be required to have more managerial power over the investor`s assets. On the other hand, it is expected that the representative will be at a higher risk of being liable for tax fraud or labour debts.
This comes along with a rule that requires that the ultimate beneficial owners of any company investing in Brazil be revealed to the Federal Government.
The result of these rules, I think, is that the cost of keeping local representatives will increase. Instead of using young professionals or junior accountants as representatives, the investors will have to select lawyers or executives. Costs with D&O insurance should also go up.
On the plus side, it looks like the new president is taking steps to speed up the registration of foreign investment. Let`s see if the policies even out one another. I sure hope so.
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