Easier rules for work visas in Brazil

You may also want to see:

- Foreigners with a working Visa in Brazil, steps to get your documents in order.

- The long and treacherous quest to get a work visa permit in Brazil

What changes:

1) Documents must be presented mainly electronically.

2) Most of translations (e.g. diplomas, graduation certificates) can be presented after the visa is required, and not before;

3) Foreigners may switch jobs while in Brazil in a much easier way. The visa is not cancelled when the worker change jobs, but automatically renewed.

4) Postgraduation students can come to Brazil in order to work during their vacation time (up to 90 days a year)

It is also expected that the analysis will be made much faster. 

Please notice that part of the old regulations still apply. The gates are still closed to workers without qualification and a Brazilian company must sponsor the visa request. 

The visa still has to be obtained before you come to Brazil!

Nevertheless, a change for the better. 

You may also want to see:

Foreigners with a working Visa in Brazil, steps to get your documents in order.

The long and treacherous quest to get a work visa permit in Brazil

Capital gains tax in Brazil – what foreign companies should know

See also:

Business Basics in Brazil

Time frame to incorporate in Brazil and Royalties

I recently received a question from one of my blog readers in the UK, concerning capital gains tax in Brazil. His question was as follows:

Dear Adler, I’m looking to setup a company here to buy assets with funds from UK investors. I assume the Brazilian company would be subject to Brazilian capital gains tax. Would UK investors be subject to UK capital gains tax also?

Amazo

______________

Dear Mr. Amazo,

Thanks for the message. 

I have recently been working with quite a few investors from UK and The Netherlands with similar business strategies. 

There are two sets of tax structures that may apply to your case:

(1) If you set up a Brazilian Company and invest through it, you will pay taxes as a Brazilian company. But, after taxation, the gains can be sent back to the UK without profits remittance tax. When the original capital is to be sent back, you may have to pay taxes on the currency appreciation.

(2) If you invest as a foreign company, directly in the stock market, the taxation may vary from 0% (in case of federal bonds) to 25% (day trade and some investment funds). In this case you do not have to set up a company in Brazil, but will have to hire a bank or broker here, who will represent you. 

In both cases, the taxation in the UK is independent from the taxation in Brazil, and may apply.

The Brazilian Central Bank does not charge anything for the registration. The registration before it is only for regulatory purposes. All transferences and business are managed by private banks. 

I hope to hear more from you. 

Regards, 

Adler 

See also:

Business Basics in Brazil

Time frame to incorporate in Brazil and Royalties

Homosexual marriage made easier in Brazil

Note: Please check: Same sex marriage allowed in São Paulo. 

The National Council of Justice (CNJ) approved on the last 14th of May a resolution that orders notary public offices to convert stable unions between homosexual couples to a formal marriage, should the couple wish to do so.

Most homosexual couples used to formalized their union through a stable union agreement. Now, instead of having to marry in order to transform the civil union into a regular marriage, they can just convert the stable union, which is easier and faster.

The same goes for the validation of gay marriages celebrated abroad.

There is a risk of the measure being questioned before the Supreme Court. But, personally, I do not believe it will happen.


Note: Please check: Same sex marriage allowed in São Paulo. 

Quick Data on Bankruptcy and Tax Free areas

(Feel free to send me more questions, I will try to answer them the best way I can)

Q: Are you aware if Brazil has any "bonded tax-free areas" like Shanghai Waigaoqiao? thanks

Comment: Brazil has a few "Zonas francas", which have considerably lower taxation, such as the Zona Franca de Manaus, in the Amazon Forest. 

In addition to that, Brazil has some tax benefit zones, such as a big one in the Northeasth, where taxation is generally lower. 

Finally, Brazil also has some other tax benefits for parts and raw materials that are imported, industrialized here and then reexported.

Q: Can you provide an overview of the bankruptcy process in Brazil? If so, please briefly elaborate on how your background enables you to discuss this topic.

Comment: Yes. The bankruptcy process in Brazil is relatively fair, by which I mean it is more favorable to the debtors, but not absolutely.

However, government credits, employee’s credits and credits secured by mortgages have clear preferences over commercial debts. 

Thus, big companies seldom pay more than 20% of its outstanding debts to ordinary creditors after the liquidation procedure.  

See also:

Which are the best brazilian ports?

Brazil: A User’s Guide

Singapore and Brazil sign MOU on intellectual property cooperation

Singapore and Brazil have taken steps to strengthen intellectual property (IP) cooperation in the next five years.

File photo: The Singapore skyline. (AFP/File - Simin Wang)

The Intellectual Property Office of Singapore (IPOS) and Instituto Nacional Da Propriedade Industrial (INPI) signed a memorandum of understanding (MOU) that provides an umbrella framework for collaboration between the two countries.

Under the agreement, parties will explore activities that encourage exchange of information, best practices and knowledge on various IP-related issues.

IPOS said when implemented, businesses of both countries can benefit from expedited patent registration, and greater sharing of IP business best practices for small and medium enterprises (SMEs) through joint participation of IP conferences and events.

Chief executive of IPOS, BG (NS) Tan Yih San said: "Singapore business owners will benefit from the network of South American markets, and have more direct access to the business opportunities in Brazil."

The MOU was signed at the INPI in Brazil on Sunday. 

- CNA/xq

Source: http://www.channelnewsasia.com/news/singapore/singapore-brazil-sign-mou-on-intellectua/664006.html

Exemption of import tax for machinery - Import permits for electronics and drugs

Note: You may also want to see How to calculate Brazilian Import Costs.

A couple months ago, I have been invited by the American Chamber of Commerce to present a panel on the most frequent problems regarding import procedures. 

The panel was very busy, as the audience contributed with lots of questions. 

I was trying to reproduce the whole event in a post, but I decided to list only the main topics. Here we go 

EX-Tarifário (Exemption of import taxes)

Advanced machinery that is not produced in Brazil and that can be considered a capital investment (microchips assembly lines are OK, the new Google glasses are not) may be imported with a substantial reduction of the Import Tax. 

I really meant the Import Tax, called II. Other taxes applicable over imports will still be applicable. 

WOW, tax breaks? Where do I sign?

Ex-tarifário is used very little in Brazil. Extremely little, I would say, considering that our industrial sector is far from the technological edge. 

One of the reasons is that it is not an automatic exemption, but rather a specific concession that must be granted by the government upon request of the importer. 

During the lecture, the other panelists and I have criticized this system a lot. Mainly because it takes a lot of time to obtain an exemption. Usually 6 to 12 months. 

This is because the procedures involve consultations with Brazilian producers, in order to confirm if the goods do not have a Brazilian similar one (Brazilian producers tend to be very broad on their interpretation of similar).

The States in Brazil can also grant tax exemptions for special machinery. Since the state VAT is one of the heavier taxes applicable over any import, this benefit should be pursued  by all importers. 

Temporary imports

Construction machinery, planes and other equipment may be imported on a temporary basis, with partial payment of import taxes. 

This kind of import also requires previous approval, that usually demands 3 months to be granted. 

Some companies will make a temporary import while the request for tax exemption is being processed. 

Regulatory Agencies and import permits, 

Many products need previous approval before being imported into Brazil. In some cases, the approval must be obtained before the goods are shipped abroad. 

For example: 

Medicines, cosmetics and food products must be previously approved by ANVISA; 

Electronic products, including cell phones and wireless devices, must be approved by ANATEL

Several consumer products, like toys, helments and condoms must be approved by INMETRO. 

Many exporters and even Brazilian companies do not know about it, and incur great losses when the goods are retained by customs. 

Please note that only Brazilian residents or Brazilian companies can handle the agencies' approval and the importation procedures, including the licensing of special products. 

This means that you must either assign a Brazilian partner to take care of the import licensing and customs clearance in your place, or you must incorporate a Brazilian company in order to do it yourself.

Of course, you can also sell directly to a local buyer. In this case, the local buyer must take care of the import procedures.

Approval procedures from the agencies mentioned above vary immensely. Some products need only be registered, while other (specially electronics and medicines) need to go through expensive tests. 

I will write more about it later.  

ARBITRATION IN BRAZIL IS LESS SAFE NOW

I have written before about how Brazil was in the right way regarding arbitration. This post it to take that back.

I'm not recommending Brazil as a venue for arbitration anymore. At least not until some very sensitive issues are solved.


Here is the story:

In February, the Brazilian Revenue Service (which I will call Beast from now on) has contacted many arbitration chambers, asking them for information about the fees their arbitrators were receiving. I read the news at the time (I read everything related to Brazilian taxes compulsively, as the old readers already now), but didn't pay too much attention.

The Beast has the right to ask for commercial information, of course. Arbitration chambers are organized as foundations, associations or companies, all of which must keep financial books, collect labor taxes over what the pay their employees, etc. So, nothing wrong about asking to check the chamber's own books.

But the Beast has required a full copy of all the arbitration procedures, evidences and confidential documents included !

You know what that means? It means delivering your computer codes, commercial plans and, theoretically, even the Coca Cola Formula to some government employee. 

Not to mention that the Revenue Service employs several law interns, who usually are 18 or 19-year-olds and who have full access to all the data and procedures.

Why would they do that?

1) The Beast is afraid that arbitration will turn out to be big money laundering and tax evading schemes;
2) Brazilian government's "zeitgeist" is that professional secrecy, specially regarding lawyers, it getting in the way of tax collection (if destroying professional secrecy is against the constitution does not seem to bother them)
3) The Beast has noticed that many arbitration procedures are not conducted by lawyers, and, therefore, are easier to break in, since other professions are not as well protected regarding confidentiality (one should note that the chambers managed by the Bar Association have not suffered any attack)
4) The Beast wants to use the information it acquires from the arbitration procedures, specially regarding corporate structures, offshore subsidiaries, etc to plan raids and investigations against big companies.


And can they do it?

It depends.

If there is no lawyer involved in the arbitration, the Revenue Service could, theoretically, ask for the documents that are strictly necessary in order to assess how much the arbitrators have been paid, and how much the chamber has received in fees. A previous agreement or some excerpts of the final decision should suffice.

But I understand that full disclosure is way out of their powers, and completely illegal.

How to prevent it?

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.


I'm very sad, but I'm serious.

What do you think about that?


You may check part 3 and part 2.