Registration of Foreign Investment in Brazil
Every capital that enters in Brazil, being it an equipment, a good or money, has to be registered in the country. In this article we will explain how to do it using the Central Bank's system.
The definition of foreign capital, according to the Brazilian Foreigner Capital Law, is: every good, machine and equipment brought to Brazil, without an initial outlay, destined to the production of goods or services, as well as any financial or monetary resources brought to Brazil to be invested in economic activities, as long as they belong to private people or companies resident, domiciled or headquartered abroad (non-residents of Brazil).
The Central Bank of Brazil regulates the markets of commercial and financial exchanges and of tourism. The legal treatment given to the foreign capital is the same as the one given to the national capital, with no distinctions.
For a foreigner, private person or legal entity, to subscribe a share of the capital or to acquire a share in an existent Brazilian company, it is necessary to send the money for the investments through banking establishments authorized to operate with exchange. This remittance can be made without any previous authorization of the Central Bank of Brazil.
The registration of the foreign capital is made after the remittance. Before that, however, it is necessary to make a clearance at the Central Bank Information System, known as SISBACEN, and to have a provision of information from all the parts involved in the operation, as well as the information of its representatives at the Registry of Companies, known as CADEMP.
The register of the foreign capital that entered in the country is made based on the declaration of the responsibles, directly at SISBACEN, using the system of RDE, the Electronic Declaration Register. It is done within 30 days counting from the moment the operations began. In this register there must be the necessary information to identify the parts and to individually characterize the operations related to the foreign capital invested in the country. The foreign investments have to be registered in the module IED.
IED – Investimento Estrangeiro Direto
Translated as Direct Foreign Investment, IED is every amount of money sent from abroad that is applied in the domestic productive structure of a country. In other words, it's a way of requesting a share in a pre-existent company or investing money in a new one.
This type of resource is the most interesting one because the money enters the country and stays there for a long term, helping the development of the industries and increasing the production capacity. It is not like the speculative investment, that can leave the market at any time.
Between the decades of 1960 and 1980, Brazil was among the countries that received most of direct foreign investment in the world. However the country lost its position after the dissolution of the Union of Soviet Socialist Republics and a great number of countries, recently out of the Communist regime, became good alternatives. With globalization, the flow of capital became easier and, nowadays, Brazil disputes with emergent economies, such as India, China and South Africa.
How to Register
To use the system RDE-IED, there are some steps that need to be followed:
1 - Obtain access to SISBACEN as a special user (usuário especial), through the accreditation of the receiving company, according to the instructions available, in Portuguese, here. Another alternative is to use services provided by financial institutions for the initial registration and also use other service providers, or a private person that represents the company, to update the registrations.
2 - Check if the national receiving company and the non-resident investor are registered at CADEMP through the transaction PEMP600 of SISBACEN. In case they're not, it's necessary to register them using the transaction PEMP500.
3 - Register a number of RDE-IDE to every pair national receiving/non-resident investor using the transaction PRDE600, Option 1 - Cadastramento de RDE-IDE/Consultas.
4 - In case there are resources coming, it's necessary to do the exchange operation with an specific code, presenting the operating bank a copy of the statement consolidated of RDE-IDE (Option 1-20 of transaction PRDE600).
5 - Register, using the transaction PRDE600, the relevant company events that usually requires registers in Option 2 - Declarações de Receptora (Receiving Company Declaration) and in Option 3 - Declarações do Investidor (Investor's Declarations).
6 - Register until April, 30th of each year, through Option 2-11, the economic-financial statement, based in December, 31st of the previous year.
The accreditation to SISBACEN can be made through letter, personally or via internet, using the website of the Central Bank of Brazil and having an e-CPF.
Use of Transactions at SISBACEN
After obtaining the accreditation, it's necessary to download the app PASCS10 here. Download the .exe version to run the program; in case it doesn't work, download the .zip version.
1 - At the app home screen, choose the type of person: legal (pessoa jurídica; choose Institucional) or private (pessoa física).
2 - In the part Tipo de Emulação, it's possible to use Navegador (Browser) or Aplicativo Emulador (Application). This last one doesn't accept commas, so when typing information of costs and including cents, there must be used a dot to separate them.
3 - For the registration of the direct foreign investment you must use the Option 11 – PRDE600 – Investimento Estrangeiro Direto – Declarante. The options for registering and consulting at CADEMP are: 20 – PEMP500 Cadastro de Empresas Área Desig – CADEMP – Atualização Cadastro (to update information) and 21 – Cadastro de Empresas Area Desig – CADEMP – Consulta (for consulting).
If there is a mistake in typing an information in another field than the one it should be, the keyboard is blocked by the system and the only way to make typing work again is pressing ESC.
The system offers two different types of buttons in case you have problems:
- help in the screen (press F1) – gives you the information about each one of the fields
- help in the field (press “?” in the field and ENTER) – shows the possible numbers that can fill the gaps.