How to Open a Trading Company in Brazil
The actuation of a Trading Company can be mixed up with the actuation of a Commercial Exporter; this article explains their differences and also outlines what is necessary to open a Trading Company in Brazil.
In Brazil, the law of trading companies was created by the government based on the Japanese and American legislation. Unlike these countries – where the presence of trading companies is large and extremely active in the economic development – in Brazil, the legislation was slow to take off due to conceptualization and understanding errors as to the role of tradings in the country.
In response to such difficulties and obedient to the legislation that created them, trading companies arise in the business landscapes of Brazil - supported by their skills and translating their commercial vocations, almost always due to the expertise of their business people or business operations.
What a Trading Company is?
A commercial company that works as an importer and exporter, and operates in the sector of outsourced foreign trade is recognized worldwide as a trading company. The actuation of this type of company can vary in the commercial or operational area.
The role of tradings is fundamental. They are responsible for work as a communication and an actuation channel between the national producers and the external importers, since the full export process comprises a series of specific knowledge, such as:
- commercial procedures
- markets and their respective characteristics
- commercial and fiscal risks
- necessary procedures to the hiring of transportation and insurance
- ways of payment
- available financing
Documents Required to Open a Trading
Aiming to develop and encourage international commercial activity, the Brazilian government, through Decree-Law 1,248, of 11/29/1972, extended the purchases of domestic goods, when carried out by trading companies, for the specific purpose export.
The Decree supports the tradings by deferring to them, all the benefits that would be assigned if the product was commercialized directly by its manufacturer. This guarantees that the trading can acquire the tax benefits granted by Brazilian laws to encourage exports.
According to the Decree, to act as trading, the companies must comply with the following requirements:
- have special registration in SECEX – The Brazilian Secretariat of Foreign Trade
- have special registration in the SRF – Foreign Revenue Secretariat
- be constituted in the form of a corporation, the shares must be nominative with voting rights
- present minimum capital fixed by the National Monetary Council – BRL 748,466.66
Register the Trading as a Corporation
After being registered as a company, the trading must deliver the following information to DECEX - the Brazilian Department of Foreign Trade:
- name of the company
- CNPJ number
- address
- telephone and fax numbers
- indicate the places where they will operate as Trading
Trading Company X Commercial Exporter Company
The actuation of a trading can be confused with the actuation of international representative companies or to companies that produce some good to export it. The trading is characterized mainly by the acquisition of goods in the internal market and by the exportation of this same product abroad.
| Trading Company | Commercial Exporter Company |
| Must present a minimum capital to start operating. | It's exempt from presenting a minimum capital to start operating. |
| The Company needs to register in Siscomex to engage in export and import and get the Certificate of Special Register to operate as a Trading Company, issued jointly by Secex/Decex and Regional Superintendent of Federal Revenue of the State where it is located. | The Company is subject to registration in Siscomex, to operate in export and import, and enrollment at REI - Registration of Exporters and Importers of Secex/Decex, performed automatically by performing the first export through Siscomex. |
| If the goods purchased domestically by the Company, with the specific purpose of export, is not exported within 90 renewable days (primary and semi-manufactured) or 180 (manufactured) days, it is up to the Company to collect IPI and to the manufacturer to collect ICMS. | If the goods purchased domestically by the Company, with the specific purpose of export, is not exported within 90 renewable days (primary and semi-manufactured) or 180 (manufactured) days, it is up to the Company to collect IPI and to the manufacturer to collect ICMS. |
| The manufacturer that sells internally to the Company, with the specific purpose of export, is benefited by the exemption from the Pis and Cofins payment. | The manufacturer that sells internally to the Company, with the specific purpose of export, is benefited by the exemption from the Pis and Cofins payment. |
| The access to export incentives by the manufacturer only occurs after the Company delivers the document "Memorandum-Export", accompanied by the bill of lading and proof of export issued by Siscomex, characterizing the performance of the export for the purpose of IPI and ICMS. | The access to export incentives by the manufacturer only occurs after the Company delivers the document "Memorandum-Export", accompanied by the bill of lading and proof of export issued by Siscomex, characterizing the performance of the export for the purpose of IPI and ICMS. |