Time frame to incorporate in Brazil and Royalties

I will, from time to time, reproduce here some interesting emails I have exchanged with foreign investors, just as I often do at my Portuguese blog.

Today, I got a message from an Australian technology company that plans to invest in Brazil. Here are the main excerpts:

Dear Mr. Adler,

I hope everything is going well for you. We are a  Science company willing to explore businesses in Brazil. Could you please guide on this issue?

Where could I get information of setting up a subsidiary in Brazil? Time, cost, minimum numbers of employee, do I need a lawyer to do that, and royalties are my main queries.

Thanks in advance for your support. I can speak, read and talk Portuguese; thus if it is more easy to reply in Portuguese please do so.

Regards,

________________

Dear Sir,

Thank you for your contact.

You may check my work and profile at www.brazilianlawblog.com.

In order to set up a subsidiary company in Brazil, you will need a lawyer.  I have a post describing the documents you must prepare (please see  List of documents for setting up a company in Brazil)

I would estimate the total cost in about 5.000 USD, including legal fees. Your company would take 3 months to be fully operational.

There are no minimum capital requirements, nor the need to hire employees. However, you must have a local Director who is either a Brazilian or a foreigner with a permanent Visa.

If you invest at least 150.000 Brazilian reais as an Individual, you may be eligible for a permanent investor's visa. If your company invests at least 600.000 USD your company will have the right to acquire a permanent Visa for one Director.

Brazil does protect intellectual property. However, payment of royalties to companies abroad is subject to a taxation of 25%. Nonetheless, there are ways to reduce this rate. For instance, establishing the local subsidiary as the owner of the intellectual property and remitting profits abroad, instead of royalties.

I have some friend from Australia and am very fond of the country. It would be a pleasure to help you.

My skype is adlermartins.

With warm regards,

Adler Martins

雄 鹰 (my Chinese name)