segunda-feira, 30 de julho de 2018

Evento OAB/MG sobre Internacionalização de Empresas

A Comissão de Direito Internacional da OAB-MG, da qual faço parte, se mobilizou para fazer um evento sobre aspectos práticos do Direito Internacional.

Todo mundo associa Direito Internacional a temas um pouco vagos, de fim de noticiário. Alguma coisa envolvendo a ONU, uma guerra num canto distante da Europa já beirando a Rússia, etc.

Mas o Direito Internacional, hoje, é base para solução de problemas muito urgentes. As pessoas que saem (fogem) do Brasil precisam do Direito International. Da mesma forma, as empresas de tecnologia que buscam abrir sede em Miami e qualquer empresa que faça venda pela internet para clientes no exterior.

Os temas do evento são muito chamativos e os palestrantes, a maioria meus colegas, são excelentes.
Anotem aí. Dia 09 de agosto, quinta-feira, às 09h da manhã. 

Eu vou palestrar sobre contratos de câmbio relacionados à internacionalização de empresas.

A inscrição é gratuita e pode ser feita pelo site da OAB/MG.

terça-feira, 5 de junho de 2018

Opening of branch in Brazil - Official guide

The Brazilian government has published a manual  explaining how a foreign corporation can set up a branch in Brazil. 

Unfortunately, it is terrible. 

The problem is that the investment via branches was designed for a different era. The two basic acts that regulate it are respectively from 1916 and 1962. 

It was the time of huge factories shipped in blocks to poor countries, but totally controlled and administered from headquarters back in the UK or Germany. 

Nowadays, any big business will have a local board in Brazil which is trained in Brazilian taxation and that understands the Brazilian market. 

Moreover, under the old rules the branches were forced to publish the balance sheets of the worldwid eoperations in Brazilian newspapwers. Nobody is going to spend money on this kind of bureacracy nowadays. 

I`m saying this because I think the guide should have focused on the few exceptional cases in which using a branch is still fine. For example, if you are a trading company operating between Brazil and Uruguai. 

Without this context, the guide is actually boring and intimidating. 

The documetn missed the opportunity to display how incorporating a new company in Brazil has become a much quickers and smarter investment route than opening a branch. 

On the plus side, the guide brings some templates that can be very useful. The image on this post is an example. 

There is a Spanish version too. 

If you want to read the guides, you may download the English one here and the Spanish one here

For a more positive view on how to incorporate in Brazil you may check any of the links below: 

sexta-feira, 1 de junho de 2018

Tributação de empréstimos tomados no exterior por quem mora no Brasil

Em resumo, a tributação sobre empréstimos de longo prazo obtidos no exterior é de: 

IOF:  zero (mas o IOF pode mudar a qualquer momento, por isso é preciso conferir sempre);

IR:    15%, somente sobre o valor dos juros. A devolução do montante principal não paga imposto de renda.

É bom lembrar que a simples contratação do empréstimo não gera Imposto de Renda no Brasil. Não se paga IR sobre o dinheiro emprestado “que entra”.

A maior dificuldade é que o empréstimo deve ser registrado perante o Banco Central e a taxa de juros contratada deve seguir algumas regras. Especialmente, a taxa de juros não deve estar longe da média que se cobra no mercado internacional.
Recomendo que a operação de entrada do dinheiro seja feita por meio de bancos especializados em câmbio.

Sempre será necessário um contrato internacional, devidamente assinado

Você precisará dele para registrar o empréstimo no Banco Central e também par conseguir liberar a remessa junto à mesa de câmbio.

quinta-feira, 31 de maio de 2018

Amendment to Double Taxation Agreement with Norway

The Brazilian senate has approved changes to the Double Tax Agreement with Norway, reflecting a Protocol signed in 2014.

The changes are destined to allow the exchange of information between the tax authorities of each country.  The text can be found here (in Portuguese).

The protocol is pending presidential sanction to become valid in Brazil.

We will probably see a lot of amendments to old DTAs, following the new UN model tax treaties from 2017 and the OCDE updated rules on transfer pricing and other issues.

Link to the Senate page:
Plenário aprova acordo com Noruega para evitar dupla tributação e sonegação — Senado Notícias:

sábado, 19 de maio de 2018

Bitcoin arbitrage in Brazil - how to do it

Brazil has been a good market for Bitcon/cryptocurrency arbitrage. Although the last weeks have been rough, prices spikes always occur and specialists have pointed out to me that, if one can keep costs down, it is possible to set up a stable and recurring arbitration business.

The restrictions faced by entrepreneurs are more due to bureaucracy and business culture than to legal regulation. Brazilian law is relatively welcoming of bitcoins and other cryptocoins.

In this article I will explain both the theory and the practice behind it.

Note: I`m using Bitcons as the general term for cryptocurrencies.


Bitcoins did not receive a specific legal classification in Brazil, as of yet. So far, they are subsumed under the general class of “intangible goods”, but without any special designation such as software, services, intellectual property, etc.

This turns out to be very consequential. The broad definition prevents bitcoin from being taxed as a license subject to royalties, or as an off-the-shelf software code.

In a sense, cryptocurrencies are similar to shares or financial options. Intangible property that is worth money, but that is not subject to import tax or other customs duties.

This mean that they can be openly called bitcoins in legal documents, which is a plus. Several other countries require traders to conceal the nature of the operation by calling bitcoins “software”, “special services”, “special customers points in a promotion system” and all sorts of understated or generalized terms.

Keeping this line of reasoning, a hypothetical purchase of bitcoins abroad, made by a Brazilian company, would play out like this:

  • The Brazilian company would make an international transference of funds to the seller. This purchase is not taxed in itself, however the FX transaction is taxed at 0,38 by the tax over financial operations (IOF);
  • Bitcoins are transferred to the buyer`s wallet;
  • Bitcoins are sold inside of Brazil. This sale will be taxed according to the company`s tax regime in Brazil and will probably be considered a “Non-operational” gain, taxed at 34%.
  • Profits of the operation can be used to purchase more bitcoins.

However simple, this operation is rarely performed, due to the problems listed next.


The first problem is that few banks are bitcoin friendly, specially among the big retail banks. The situation in Brazil is not as bad as in other countries, though, because middle banks specialized in FX transactions are more willing to engage in operations involving bitcoins.

A second obstacle is that the local sale of bitcoins does not generate a formal invoice for tax purposes (nota fiscal). This tends to put the company in a tough spot when it is required to prove the origin of its profits to the bank compliance officers. A solution for this will be discussed in the next section.

The business practices of bitcoin exchanges also present a challenge. Exchanges in the US or Europe don`t generally accept deposits made directly by a foreign entity located in South America. It is not uncommon for an exchange to only accept deposits made from a bank based in the same country as the exchange.

Finally, the processing time. Sending money abroad through banks or exchange houses is not a continuous process. From time to time the compliance procedures will eat up a couple days. Moreover, retail banks will seldom perform transactions in the same day. D+2 is likely the standard. If the operation is not correctly timed, a week can go by before the funds reach the other party.


After meditating on this problem and after discussions with a good number of banks and compliance officers I conceived a model that is compatible with Brazilian regulations and that is agile enough to work according to the timing of the arbitrage business.

1. First step is to incorporate a Brazilian company, owned by a foreign company that is engaged in the purchase of bitcoins.

  You may find more details about it in this post.

2. The owners of the Brazilian company must inject funds in the Brazilian entity through increase or pay-up of equity (loans can be used, but are not recommended in this case)

The funds available to the company should be enough to purchase bitcoins abroad in large scale.

The controlling company, based abroad, will purchase bitcoins in local              exchanges.

3. The controlling company must perform a direct sale (over the counter sale) to the Brazilian subsidiary

This is extremely important. Bitcoins cannot be transferred directly to the Brazilian subsidiary, without a proper purchase and sale agreement. The price described in the contract should be somewhat of an “arm’s length” price. Brazil does have transfer pricing rules and will not accept a direct transference of assets from the controlling company, unless this transference is backed by commercial reasons.

On the bright side, Brazilian transfer pricing regulations are not detailed when it come to financial products or intangibles. This means that the controlling company can opt to sell the bitcoins with the slightest overprice.

The sale contract should be precise when describing the term of payment. Terms of up to 30 days wold be considered normal and give enough time for the Brazilian entity to resell the assets in the Brazilian market, hopefully for a profit.

4. The Brazilian entity will receive the bitcoins in it wallet and will sell them in Brazil.

    The sale can be performed directly to individual or through an exchange. If a sale is made directly to a buyer, a full purchase and sale agreement should be executed. In case the sale is performed through an exchange, the company must be very meticulous in detailing which exchange was used and, if possible, the company should try to obtain info on who the buyer is. The more detailed the records, the easier it will be to complete the next step of the process.

5. Remittance of the payment to the controlling company, through an exchange agreement.

    When performing the payment, the Brazilian company should be able to point out the origin of the funds. That is, it should demonstrate financial books and, if possible, executed agreements with buyer/ or a log of transactions performed in an exchange. Good records will allow the exchange to be processed quickly, maybe in the same day.


This template is very simplified. A realistic model should take into account the exchange rate variation and other details.

This model can be also expanded to a more financial profile. For example, the foreign investor can make the Brazilian company overfunded, through loans or other means, so that it will be able to purchase several batches and only have to perform a FX transaction once every 60 days. This may allow the group to take advantage of variation in the USD/BRL rate.

Please feel free to get in touch if you need recommendations for bitcoin friendly banks, or if you would like to explore this model in more detail.

sexta-feira, 11 de maio de 2018


Central Bank resolution n. 4.656/2018 has created a new kind of financial company in Brazil, called interpersonal lending company, specialized in intermediating loans exclusively through electronic platforms.

This has been reported as the legalization of peer to peer loans in Brazil. Which it is. But not exactly.

The new rules will certainly open new markets for technology in the Brazilian financial system and, hopefully, will bring much needed competition to the banking environment.

However, the new P2P lending companies are still subject to previous approval by the Brazilian Central Bank.

What are the new P2P Loan companies and what is in it for the Fintechs?

The interpersonal lending company (“sociedade de empréstimo entre pessoas” or SEP):
a) Are a financial institution, regulated by the Brazilian Central Bank (so, not a website run from a garage);
b) Must have at least 1 million reais (about 290K USD) in equity;
c) Are to be specialized in intermediating loans between users of an online platform (the users could be individuals or companies);
     d) Can only do business through the online platform;
     e) Must have systems in place to provide:
e.1)     Accurate credit ratings;
e.2 Management and recording of the contracts, including confirmation of signatures, confirmation of terms, etc.

Items D and E are the cause of the buzz.

The fact that the loans can only take place through electronic platforms is already forcing the players in the market to adopt software solutions that will allow them to attract and process the transactions in a safe and expedite manner.

Moreover, tools for credit rating and document processing will likely have to be added to the system.

There is a lot of space for innovation in this regard. The Brazilian civil code is not clear on the validity of electronic signatures and Brazilian jurisprudence on the matter is evolving. A lot of companies are experimenting with the use of “selfies” as signature, as well as other smart phone applications.

Foreign ownership of these P2P lending companies will be subject to special approval by the Brazilian Central Bank, following the lines of the special approval needed for foreign banks to operate in Brazil. Because of that, my bet is that foreign investors will celebrate Joint-Venture agreements with the SEP companies, in order to provide technology and maybe a trademark, while not holding equity in the operation

Tech companies interested in the subject are encouraged to check my post: Selling software and services to Brazil.

sexta-feira, 30 de março de 2018

Share evaluation - Reviewing SK Telecom (SKM) & TIM Brasil (TSU) - Week Herald

Week Herald has published an interesting analysis comparing the shares of TIM Brazil, a telecom company in Brazil, and SK Telecom. 

I`m reproducing it here, along with the link to the original text.

Link: Reviewing SK Telecom (SKM) & TIM Brasil (TSU) - Week Herald:

Reviewing SK Telecom (SKM) & TIM Brasil (TSU)

SK Telecom (NYSE: SKM) and TIM Brasil (NYSE:TSU) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
Institutional and Insider Ownership

11.2% of SK Telecom shares are owned by institutional investors. Comparatively, 15.0% of TIM Brasil shares are owned by institutional investors. 1.0% of SK Telecom shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility and Risk
SK Telecom has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, TIM Brasil has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.
Earnings and Valuation
This table compares SK Telecom and TIM Brasil’s gross revenue, earnings per share and valuation.
Gross RevenuePrice/Sales RatioNet IncomeEarnings Per SharePrice/Earnings Ratio
SK Telecom$15.77 billion0.97$2.34 billion$4.755.08
TIM Brasil$3.21 billion3.28$386.64 million$0.7827.87
SK Telecom has higher revenue and earnings than TIM Brasil. SK Telecom is trading at a lower price-to-earnings ratio than TIM Brasil, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for SK Telecom and TIM Brasil, as reported by
Sell RatingsHold RatingsBuy RatingsStrong Buy RatingsRating Score
SK Telecom13202.17
TIM Brasil03402.57
TIM Brasil has a consensus target price of $21.20, indicating a potential downside of 2.48%. Given TIM Brasil’s stronger consensus rating and higher possible upside, analysts clearly believe TIM Brasil is more favorable than SK Telecom.
This table compares SK Telecom and TIM Brasil’s net margins, return on equity and return on assets.
Net MarginsReturn on EquityReturn on Assets
SK Telecom16.16%20.30%11.13%
TIM Brasil7.56%6.90%3.76%
SK Telecom pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. TIM Brasil pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. SK Telecom pays out 1.3% of its earnings in the form of a dividend. TIM Brasil pays out 20.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
About SK Telecom
SK Telecom Co., Ltd. provides wireless telecommunications in Korea. The Company is engaged in the commercial development and implementation of wireless and fixed-line technologies and services, as well as develop its platforms, including Internet of things (IoT) solutions, lifestyle enhancement and advanced media. It operates through three segments: cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions platform services and lifestyle enhancement platform services; fixed-line telecommunication services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including Internet Protocol television (IPTV)) and business communications services, and other businesses, which include its commerce business, its hardware business and other operations. Its brands include SK Telecom, T-Roaming, 7Mobile, B phone, 00700, B tv, Syrup, UO Smart Beam Laser, Astell&Kern and Nate.
About TIM Brasil
TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

'via Blog this'

Land Border Duty Free stores now regulated in Brazil

As you can see in this link, Brazil has just published regulations allowing for the operation of Duty Free stores in the twin cities located in its dry borders. 

I have prepared this post to give you the inital pointers on the matter. 


In Brazil, duty free shops are set up as usual import/export companies. The  status of a "duty free shop' is attained after the company wins a call for bids organized by a port/airport. 

There is also a second kind of duty free shops, which has just been regulated, that can be located only at dry borders in cities bordering other countries. They are commonly located in the South of Brazil, near the Argentinian border, since there is a greater number of cities  and inhabitants there (the map shows it very clearly) . This kind of duty free shop depends on city regulations to be installed. 

In order to become an import/export company, the business must first incorporate in Brazil as a regular company. 

After incorporation, the company will obtain an import/export license (known as "Radar"). Any company can obtain an import license for small amounts of operation. i.e. 150,000.00 USD per year. 

For larger businesses, the company must upgrade to an unlimited import license. This depends on the company financial capability but usually demands a minimum equity of 400,000.00 USD. 


The new rule (INSTRUÇÃO NORMATIVA RFB Nº 1799, DE 16 DE MARÇO DE 2018) requires that border shops, among other things: 

a) should be installed in a municipality that already has city regulations allowing border stores;
a.1) should be installed in a municipality that has a unit of the Federal Revenue Service (this may exclude very small towns, specially in the North);
b) must have a minimum net worth of 2 million BRL (about 650K USD);
c) must have an electronic system controlling sales, and the system must be synchronized with the Federal Revenue Service;
d) must have camera surveillance in the store;

The company must incorporate in Brazil and fulfill the requirements first. Only after all requirements are fulfilled will the company be able to request the special regime of "duty free shop". 

I would suggest the following steps:

a) perform an initial survey of municipalities that have, or are about to issue, regulations allowing for border stores;
b) incorporate a company in Brazil with minimum equity of 2,5 millions BRL (800K USD);
c) remit the equity to Brazil;
d) obtain an import export license;
e) set up the systems required by the IRS (surveillance, electronic stock control, etc.)
f) finally, obtain the special tax regime for duty free stores and start operating. 

It all starts with an initial survey of cities, as  you can see. 

Companies must act fast in surveying the potential locations. The quickest ones will certainly have an advantage. 

quarta-feira, 28 de fevereiro de 2018

domingo, 28 de janeiro de 2018


I think prospective importers of soybean will find this interesting

By the way, there is a typo in the name of Mato Grosso State (it reads Mato "Grasso").  But the data makes up for it. 

From the Soybean Markets Twitter account.


domingo, 21 de janeiro de 2018

Common clauses used in investment contracts of Brazilian startups

The Brazilian investment promotion initiative just published a thought-provoking study about common clauses in contracts between investors and Brazilian startups. 

It seems to me that Brazilian startups are still a bit naive. Those are rookie numbers. 

What do you think?

What to expect in a typical investment contract? Research conducted by HBS Alumni Angels of Brazil into 64 innovative Brazilian corporations shows the most common clauses used in investment contracts between investors and startups.

About APEX:

Invest in Brasil is the brand that identifies the investment promotion initiatives of Apex-Brasil - the Brazilian Trade and Investment Promotion Agency -, whose mission is to develop the competitiveness of Brazilian companies, promoting the internationalization of their operations and the attraction of foreign direct investment (FDI).