domingo, 22 de dezembro de 2013

Common doubts about creating a Brazilian import company

This blog has a lot of articles about Brazilian import procedures and Brazilian import costs

But this might be just the one that was missing. 

I had an email conversation with a potential client, in which we covered all of the most frequent questions asked by those who plan to incorporate a company in Brazil and start importing and reselling (which is, I must say, a splendid notion, given Brazil's lack of industry and inclination towards imported goods, specially shiny thing with a brand on it)



Please take note:





Blog reader: How long will it take with your experience to incorporate this import export company?


2-3 months to incorporate, plus one month to obtain the import license. 
(See also: Incorporating a Brazilian company, step by step)

Blog reader: How long it will take to get this import license as well.

One month, as above. 

Blog reader: How many people we must have in the company.  I would like to include as well my girlfriend to facilitate her  residence permit as a passive member of the company.  Are we going to need as well a Brazilian or not?

If each of you invest 150.000 BRL (UPDATE FROM 2016: NEW MINIMUN IS 500,000 BRL, EXCEPT FOR TECH COMPANIES, WHICH MAY INVEST 150,000 BRL)  you two can be Directors. If she does not invest in the company, and is hired as an employee, then there must be two Brazilian employees to each foreign employee. 

 Blog reader: The amount of $150,000 every 6 months is very little so I would like a higher license.  What do you mean with investing R$300,000 in equity get a higher import license?  Do you mean the capital of the company by equity? The money that we put in the companies bank account so we show that the capital is there? Please comment on this.

Yes. The total availability of capital of the company is taken into account when evaluating the expansion of the import license. So, any equity, loans, etc will help  

 Blog reader: Can I have please the scale of import licenses of Brazil so I can see what is available and what is suitable for my project.

There is no standard scale. The evaluation is made on a case by case basis. 

 Blog reader: As for the visa now I want to invest more I think there is an option of R$600,000 for my investor visa to be on the safe side can I with this money ask as well for my girlfriend the same visa.  She is not my wife!!

Each director visa must be "bought" with a  separate deposit of R$600.000,00. 

Blog reader: Where this money is going to be held?  Can you please give me more details.

The money must be deposited in the company's bank account. The government will not control how you use it.

 Blog reader: Can this incorporation licenses and residencies be finished by end of April 2014 if we are ok with all paper works before Christmas around the 23rd of December?

If we start now (December), April is a reasonable deadline. 

-------

See also: 

Incorporating a Brazilian company, step by step

quarta-feira, 18 de dezembro de 2013

Brazilian new military procurement laws and Sweden's Jet Fighters - It is all connected (plus, Thor 2 and NDTAs)

Our president is on fire today! She just (sort of) denied a visa to Snowden. And about now has chosen the new Brazilian jet fight.

I will use this opportunity to comment on the new Brazilian rules on military purchases.

The law that set out the new policy for acquisition of strategic defense equipment is not brand new. It has been published in March this year. But the decrees and regulations that have details it and named the first strategic gears are very recent.

The new rules set out a clear policy, aimed at:

1. Attracting relevant technology to Brazil, on o permanent basis. 

 Suppliers must set foot in Brazil. Demonstrations of irrevocable transference of technology are greatly appreciated, and favored by the law.

2. Assuring continuity of production in Brazil

The law states that, whatever the equipment being used, the Armed Forces must be able to escalate the production of it, in case they need to.

3. Control must be in the hands of a Brazilian national

The factories or re-sellers dealing in strategic equipment must be Brazilian nationals, or companies controlled by Brazilian nationals.

This is actually a very strong requirement, since the Brazilian constitution does not allow for differentiation between Brazilians and foreigners, except in the most extreme cases, such as national security.

Be sure to check my advice on Joint Ventures with Brazilians!


JETS

I have always bet on the Swedish jets. Let's be honest:

-Sweden has a non-double taxation agreement with Brazil (which France also had, while the US did not);
-Queen Silvia's mother is a Brazilian;
-Thor 2 has been wildly successful in the Brazilian theaters.

And, most importantly:

SAAB has created a Brazilian-Swedish Technology Institute, in Brazil, just to show goodwill! And their bid strongly mentioned transference of technology.  It has been, by far, the bidder that demonstrated more commitment to Brazil.

The new rules on military procurement were not yet published when SAAB created the Institute (that is, this purchase may be regulated by previous rules). But is is clear that they understood the atmosphere surrounding the Armed Forces and leaned towards what would become the new standard.

(I'm not naive to the point of missing that some secret terms were also involved in the deal. But, as European philosphers say: Wovon man nicht sprechen kann, darüber muss man schweigen*).




Also, Vikings are cool and everybody loves them.





*Whereof one can not speak, thereof one must be silent





Edward Snowden seeks asylum. Brazilian law would allow for it, but Dilma will not

Brazilian international relation's body, usually referred to as Itamaraty, is famous for making bad moves.

From the media reports, it seems that Snowden's asylum will not be granted, should he formally request it. Word has it our president is reluctant.  (What does NSA has on Dilma to bully her into such shameful behaviour?)

Presidential reluctance is the only possible explanation, by the way. Our asylum laws have been written specifically to aid those who suffer political persecution and/or penalties due to exercising free speech. Snowden, Assange and many others would be entitled to it immediately, were they up against someone else.

This is exactly why I'm not a diplomat. If I were, I would quit.

Anyway, I hope the asylum is eventually granted and that Snowden can live the remainder of his life in Copacabana. Russia's time might be corrupting his lungs, and US weather might harm his throat.



From: http://edition.cnn.com/2013/12/17/world/americas/snowden-nsa-brazil-letter/

Snowden's open letter offers to help Brazil investigate NSA surveillance

By Josh Levs, CNN
December 18, 2013 -- Updated 0145 GMT (0945 HKT)

Snowden to Brazil: Help me, I'll help you

STORY HIGHLIGHTS
  • NEW: The Brazilian government does not plan to respond to open letter, an official says
  • Snowden has agreed to testify via video to a European Parliament panel, sources say
  • His open letter was posted online in two places, according to journalist Glenn Greenwald
  • Snowden mentions the need for asylum
(CNN) -- National Security Agency leaker Edward Snowden has written an "open letter to the people of Brazil" offering to help investigate U.S. surveillance of Brazilian citizens.
The letter was posted on the website pastebin and on the Facebook page of David Michael Miranda, partner of journalist Glenn Greenwald, according to a tweet from Greenwald.
In the letter, Snowden says he has told Brazilian lawmakers that he is willing to help investigate "suspected crimes against Brazilian citizens."
"I have expressed my willingness to assist wherever appropriate and lawful, but unfortunately the United States government has worked very hard to limit my ability to do so -- going so far as to force down the Presidential Plane of Evo Morales to prevent me from traveling to Latin America!
Analyst: Snowden's leak equal to murder
"Until a country grants permanent political asylum, the U.S. government will continue to interfere with my ability to speak."
The Brazilian government does not plan to respond to Snowden's letter, according to an official in the press office of the Foreign Ministry.
At this point, no new request for asylum has been received, so authorities also will have have no comment on speculation surrounding the possibility one could be forthcoming, the official said.
An initial request was received in July, but it was a letter sent not by Snowden himself, but by Amnesty International to several countries. Brazil said then that it was not going to respond to the generic letter.
Consternation in South America
Brazil has been in an uproar over reports of U.S. spying.
In September, Brazilian lawmakers said they planned to send a commission to Russia to speak with Snowden, who had allegedly leaked information about U.S. spying against the country's president.
Foreign Minister Luiz Alberto Figueiredo called the situation "an inadmissible and unacceptable violation of Brazilian sovereignty."
Last month, Brazil acknowledged its own past snooping. The newspaper Folha de Sao Paulo revealed that Brazil spied on foreign diplomats inside Brazil in 2003 and 2004. Its targets included officials from Russia, Iran and the United States.
"I see the situations as completely different," Brazilian Justice Minister Jose Eduardo Cardozo told the paper.
In his letter, Snowden, a former NSA contractor, writes, "Today, if you carry a cell phone in Sao Paolo, the NSA can and does keep track of your location: they do this 5 billion times a day to people around the world. When someone in Florianopolis visits a website, the NSA keeps a record of when it happened and what you did there. If a mother in Porto Alegre calls her son to wish him luck on his university exam, NSA can keep that call log for five years or more. They even keep track of who is having an affair or looking at pornography, in case they need to damage their target's reputation.
"American Senators tell us that Brazil should not worry, because this is not 'surveillance,' it's 'data collection.' They say it is done to keep you safe. They're wrong. There is a huge difference between legal programs, legitimate spying, legitimate law enforcement -- where individuals are targeted based on a reasonable, individualized suspicion -- and these programs of dragnet mass surveillance that put entire populations under an all-seeing eye and save copies forever. These programs were never about terrorism: they're about economic spying, social control, and diplomatic manipulation. They're about power."
Snowden to testify to panel of European Parliament
Snowden has agreed to testify, via teleconference, before a civil liberties committee of the European Parliament, sources in the Parliament say.
Some within the Parliament opposed the invitation, but the majority supported the idea, the sources said. The testimony may take place in January, they said.
It's unsure whether Snowden would testify live or would be pre-recorded, the sources said, adding that his testimony is expected to cover all 

domingo, 15 de dezembro de 2013

Has Eike and the "X" group mislead investors? My analysis

READ ALSO:  Eike Batista's OGX Austria and OGX Netherlands: left out of bankruptcy, but why do they exist?

Brazilian (not so) timid take on transnational jurisdiction: OGX Austria included in the Brazilian bankruptcy


I have been asked by Alternative Emerging Investors, a magazine, to evaluate OGX's relevant facts, in order to evaluate the claims that are being made against the company.

Please find the article below. I think it is very interesting.

If you have any comments, please leave them at the end of the post, or write me at contato@adler.net.br.

Note: This is just an exercise. I'm not connected to OGX or to any investors that has claims against the X group.



__________________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________________


This article has originally been published at the fourth installment of - Alternative Emerging Investor.

To subscribe or purchase this issue, please visit www.aeinvestor.com, or contact Ms. Tiffany Swenson at tiffany@aeinvestor.com.


sexta-feira, 6 de dezembro de 2013

Verifying a Brazilian Power of Attorney - Question from Korea

 
Currently, I am making business case with Brazilian company and I have received FULL POWERTED POA including rights of enter into negotiation, sell, transfer funds signature and etc. 

Is there any other way, I can verify if the POA issue in Brazil is legitimate? 
For your reference, I have only received POA document only, grantor’s I.D copy and delegator’s I.D have not included. The grantor and delegator is both Brazilian. 
 
I am looking forward hearing from you soon. 
 
Best Regards, 

KPop Gangnam 

____________

Dear Kpop


Thanks for the contact. 


It the PoA is a public document (issued by a Brazilian notary public, or "Cartório"), it can be checked in Brazil, by anyoned. A permanent record is available at the Cartório. Even though, one must contact the grantor to check if he happened to cancel the PoA. 


 If it is a private document, the only way to check it is to contact the grantor, or to verify his signature, in case the grantor has a standard signature registered at a local cartório. 


Good luck!




quinta-feira, 5 de dezembro de 2013

Brazil adopts universal taxation for individuals and corporations - What to do?

Every time the Brazilian Revenue Service is about to lose a judicial battle, it lobbies for a change in the tax system. And gets it. Brazilian Royal Decree n. 627 from 2013 comes to further prove that saying.

*The actual name is Provisional Measure n. 627, but since it is an executive decree with the status of an act issued by the Parliament, it seems more appropriate to call it a Royal Decree, don't you think?

The aforementioned rule basically lists all the major lawsuits that the Revenue Service was losing, or about to lose, in the Superior Courts. And then gives a new, usually harsher, legal treatment to all the matters in dispute. (If only I could do that when discussing an Agreement)

Major topics are the valuation of Goodwill and complementary rules for the valuation of investments.

In my opinion, though, the greatest change has been the institution of universal taxation for individual. Or, in other words, a de facto prohibition of the use of tax havens by wealthy individuals, for tax planning.

So far, and keep in mind I'm talking about individuals only, not companies,  Brazil would only tax gains obtained abroad in two situations: first, when the values were made available directly to the individual, such as a deposit in his bank account and two, when the state of the deceased individual would have access to the gains, bringing them to Brazil.

A few years ago, Brazil had instituted universal taxation for companies that owned investments, or other companies, abroad. But the law didn't mention individuals. Thus, many companies were assigning foreign subsidiaries to this directors or shareholders, and them making use of them for tax planning purposes.

This "loophole" is now closed. Or is it?

The new rules are Byzantine, and not completely smart. I would say, for example, that the use of trusts or the use of several layers of companies would suffice to dodge them.

It seems that the main goal of the federal government was to coerce huge Brazilian companies (namely, Vale, Embraer and a few others) to retreat in their strategies to shift profits abroad.

In doing so, it has created a huge setback for Brazilians who invest in foreign retirement plans, foreign pensions or who want to manage real estate in Miami (since this kind of investment is usually made through companies).

I will discuss this Royal Decree further in future posts. 

sexta-feira, 29 de novembro de 2013

ARBITRATION IN BRAZIL IS LESS SAFE NOW - Part 3

I consider Brazil a place that does not offer enough safety for arbitration, specially if confidential information is at stake. And I just got new reasons to think so. 
I have written a lot about it. You may check part 1 and part 2. 

The main reason for that is the Brazilian Revenue Service insistence on requesting full copy of the arbitration records from the arbitration chambers. They claim that arbitration has become a way to dodge taxes. 

Well, just the other day, the main arbitration chambers of Brazil obtained a provisional ruling that exempted them from exhibiting their records to the IRS.  The good news generated a lot of celebration. Many people inside my law firm have requested me to correct myself, and post an article saying how the injustice against arbitration had been corrected. 

The thing is, I was not so sure about doing that. As any lawyer, I hate to stand corrected. And, as every Brazilian, a have a deep distrust of government. 

Turns out I was right to wait. The provisional ruling has been reverted (news here, from Valor website). The Brazilian IRS took the opportunity to take the remaining files from the arbitration chamber, so that any new reversion of the ruling will be, in practice, devoid of meaning for the current files. 

Anyway, I hope the final decision leans toward arbitration.
Also, we have a new arbitration law being discussed. Maybe this absurd will be corrected in the new law. 

For now, please follow the rules I have described in Part 1: 

1) Do not arbitrate in Brazil;
2) If arbitration in Brazil is mandatory for some reason, use the Bar Association arbitration chambers, and use only (or mostly) lawyers as arbitrators;
3) Add an obligation to destroy the arbitration procedure's records.

 






Eike Batista's OGX Austria and OGX Netherlands: left out of bankruptcy, but why do they exist? Also: Brazilian timid take on transnational jurisdiction



READ ALSO:  Has Eike and the "X" group mislead investors? My analysis




As you might have seen, OGX Offshore Units have been Left Out of Bankruptcy Case by Brazil Judge. 

The news is very interesting, specially for those who might have obtained collateral from any of the offshore units. 

But I'd like to start from another angle: Why does OGX has subsidiaries in non-oil-producer  European countries? And why the Netherlands and Austria?  (I'm not sure if OGX's subsidiary in the Netherlands is really excluded from Bankruptcy. The reports vary. I will assume it is excluded).

The answer: Non-double taxation agreements (NDTA). Plus, of course, Dutch benevolent corporate tax laws.

Brazil has precious too few NDTA. Over time, the use of Austria and Netherlands turned into the industry's standard. This is because Austria has a good standing in the European financial market. And because the NDTA with Netherlands allows for a tax planning resembling a "Dutch Sandwich". 

Most companies will direct profits to the Netherlands, use them to increase the capital of the Dutch company, then reduce that capital and repatriate the surplus.

Also, Austria is a beautiful place and I think the lawyers that first advised this kind of structured (back in 1975) enjoyed traveling there. 

Back to the bankruptcy procedure: 

Quick tip: The media has been referring to it as a bankruptcy, but it is actually a judicial recovery, similar to a judicial reorganization or to an arrangement with creditors. 

I only had access to an abridged version of the decision, so I can't lay out all the legal basis the judge has adopted. But I can make an educated guest. 

First, the Brazilian law on bankruptcy does not cover foreign subsidiaries specifically. It has some provisions about debts and credits in foreign currency, and about consolidated debts of the group, but does not go so far as including foreign related companies to the procedures. 

Second, Brazilian general procedural rules are very cautious when dealing with extraterritorial competence. In general terms, only companies with a permanent place of business in Brazil (or, at leas, a fixed representative here) can be included in litigation procedures as if they were nationals.
Third, the judge has claimed that including foreign subsidiaries in the Brazilian bankruptcy would amount to piercing the corporate veil.  He didn't elaborate much, but I think his reasoning was that doing so would be unfair to other foreign partners who might participate in the OGX Austria, for example. Also, the arbitrary inclusion of foreign controlled companies could pave the way for the inclusion of foreign investors in the bankruptcy. This would generate and absurd jurisprudence, that could upset markets and make Brazil an undesired place for the world's money. 

I think the Judge was right. Let's see what the court of appeal will say about it.