Establishing a Chemical Company in Brazil
The bureaucratic process of establishing a company in Brazil is already complicated and stressful, but it gets even more so for chemical companies. In this article, we will take a look at how to establish a chemical company in Brazil.
Registering in the state’s Board of Trade
First of all, in order to establish any company in Brazil, the person or partners if it´s a liability company, willing to establish a company must first register the company’s activities with the Board of Trade of the state in which the company will establish itself. In order to do so, the following documents must be presented:
- Verification if the company’s name is not already in use, since two companies with the same name can not exist in the same State
- DARF, Documento de Arrecadação da Receita Federal which is Portuguese for Collection Document of the Federal Revenue, a payment slip used for the payment of fees to the Federal Revenue. The code that should be used is 6621, which is related to the registration of a business
- Capa de processo, which is the requirement for the Board of Trade filing the act
- Ficha de Cadastro Nacional, the National Registration Form, informing the identification of the company (name, location, legal nature), equity and economic activities
- Articles of association also known as Estatuto Social da Empresa
- If the company is a Micro or Small Business, the owner must present a Declaração de Enquadramento, stating that the business fits the definition of a Micro or Small Business
- Notarized copy of Identification Document and CPF of the owner or of the partners. In case there is a legal entity that is a partner in the new business, a notarized copy of the CNPJ must also be provided
- Copy of proof of residence of the holder or of the partners
- Declaração de Desimpedimento dos sócios, a statement informing that any partner is not prevented, nor convicted or is under effects of conviction, to become an administrator of a company
- Previous approval by the government agency, if necessary. This refers mostly to credit related companies like banks or currency exchange bureaus
When the registration of a company is completed by the state’s Board of Trade, a NIRE, Company Registration Identification Number, is issued.
Registering for a CNPJ
After receiving the NIRE, it is time to register the company as a taxpayer, which means getting a CNPJ.
By means of an agreement between the Federal Revenue Service and most states’ Board of Trade, the process for applying or changing a CNPJ can be done through most state’s Board of Trade, which can accelerate the process. A network - REDESIM, National Network for Simplification of Registration and Legalization of Business - has been established to simplify the process.
To start the process, the applicant, who is responsible for the legal entity, must download software called PGD to generate the required forms from the Federal Revenue Service’s website. It is necessary to complete the DBE, Basic Entry Form. Once this is completed, the applicant must download the software application named ReceitaNet, available here.
Throughout ReceitaNet, the DBE, along with the Ficha Cadastral de Pessoa Jurídica which is Portuguese for Registration Form for Corporate Entities, are sent to the state’s Board of Trade. The Board of Trade will check all the documentation and once verification is completed they will send it to the Federal Revenue Service office where the CNPJ number will be issued.
Applying for the Business License
With a registered CNPJ number, the applicant must then contact the municipality or state government to obtain a Licença de Funcionamento, Portuguese for Business License. This license allows the operation of commercial activities. This is done at the Treasury Department in each State. The necessary documentation for obtaining a Business License is:
- Prior consultation of address made by local authority, since each municipality has different laws concerning where High Risk activities can be carried out
- Application for business license
- Statement of Responsibility
- Articles of Association registered with the Board of Trade
- CNPJ card
- Documento de Arrecadação Avulso, DAR, a document, similar to the DARF, for the payment of administrative fees to the government
Getting the Inscrição Estadual
Inscrição Estadual is the registration of the ICMS taxpayer and is administrated by Receita Estadual, the Treasury Department of each State. Once the Inscrição Estadual is issued, the ICMS taxpayer will have its company formally registered at the Treasury Department of the State in which it was established.
Currently, most states have an agreement with the Federal Revenue Service, which allows getting the Inscrição Estadual and the CNPJ through a single procedure. The Inscrição Estadual is mandatory for companies dealing with trade of goods, industry and intercity and interstate transportation services. Communication and energy services are also required to obtain a Inscrição Estadual. These companies, as they perform trade of goods and services, are required to obtain registration of the ICMS, Tax on Circulation of Goods and Services, and the documentation requested for registration is:
- Documento Único de Cadastro, DUC, and Documento Complementar de Cadastro, DCC, informing data from the taxpayer
- Notarized copy of document proving right of use of the property where the company is located, lease of the property or property deed
- CPF number of the accountant
- Proof of payment of the ISS, for service providers
- Simplified Certificate from the Board of Trade
- Copy of:
- Articles of association
- Business license
- Identification Document and CPF of the holder or all partners
- Proof of residence of the holder or all partners
Registry in the INSS
After receiving the Business License, the company is able to start trading. Regardless of whether the company employs people, it is required to register with the INSS, Brazilian’s Social Security institution. Despite being just the initial partners, the company must be registered with Social Security and pay the corresponding taxes. Thus, the company representative must contact a Social Security Agency to request the registration of the company and the ones responsible for it. The deadline for registration is 30 days from when trading commenced.
Authorization to print invoices
The company must apply for authorization to print invoices and authentication of tax books. This is done at the local administration of each city. Companies that perform activities relating to industry and commerce should contact the Department of Treasury of each state.
Further information on how to register for this authorization can be found in this article.
Registration with the CRQ
All companies involved in the production, commercialization, packing or application of chemical products are required to be registered with the Regional Chemistry Council, the CRQ. These companies are also required to hire a professional chemist duly qualified and registered as the Responsible Technician. The Responsible Technician needs to have a Chemistry degree and be registered with the CRQ. The chemist’s presence is of upmost importance since they will also supervise the process of applying for the environmental license and regularization at the health surveillance entity, be it ANVISA or any state’s department of health surveillance. When the company and its Responsible Technician are duly registered in the CRQ, it will receive a Certidão de Anotação de Responsabilidade Técnica. The following documents are required when registering at the CRQ:
- Form DA 002 which can be found here
- Articles of association duly registered at the state’s Board of Trade
- Copy of CNPJ card
- Proof of bond with the Responsible Technician
- CTPS of the Responsible Technician
- Termo de Responsabilidade Técnica form stating who the chemists working for the company are
- Description of the chemists’ job
- Professional curriculum of the Responsible Technician
- Copy of proof of payment of fees
The registration process costs about BRL 350 and the company must also pay an annual fee depending on its revenue.
Chemical companies, due to their environmental risks, need an environmental license in order to start operating.
Environmental licenses are often issued by each state’s competent authority, but it can be that they are issued by IBAMA, the Brazilian Institute of Environment and Renewable Natural Resources, in cases when the company may generate environmental impact to more than one state.
Environmental licensing is the administrative procedure by which each state’s environmental department authorizes the location, installation, expansion and operation of projects and activities using environmental resources considered effectively or potentially polluting or those which, in any form, may cause environmental degradation.
There are three different types of environmental licenses:
- Licença Prévia (LP), which is valid for up to five years
- Licença de Instalação (LI), which is valid for up to six years
- Licença de Operação (LO), which is valid from between four and 10 years
The deadline for the local authority to determine if it will or will not issue the license is of six months, although in some cases it can be extended to 12 months. The deadline for analysis will be suspended at the request of the local authority in order for the company to prepare additional environmental studies, in specific cases only. The company has a deadline of four months in order to meet the requests of the environmental agency.
More information on Environmental Licenses can be obtained in this article.
Applying for Outorga de Direito de Uso de Recursos Hídricos
If the company needs to make use of the waters of a river, lake or underground water, the company will have to apply for a permit to the state government called Outorga de Direito de Uso de Recursos Hídricos. This granting is to be requested at the Agência Nacional de Água, the National Water Agency, in cases where the use of a water source that runs through more than one state or that run into other countries. In cases where the water source used by the company remains within the boundaries of the state, the company must then request the granting next to the institution managing the water resources of that state.
Firefighters security measures
All facilities must be compliant to the fire department requirements regarding prevention, adoption of security measures and fire fighting actions. Each state has its own firefighters’ department responsible for supervising all companies.
Registration with ANVISA
A National Health Surveillance Agency, ANVISA, license is required for all companies that perform activities of extracting, producing, transforming, synthesizing, packing, importing, exporting, storing, shipping, distributing and transporting products in the following sectors:
- Tobacco products
- Pharmaceutical supplies
- Health products
- Sanitizing products
- Healthcare services
Chemical companies therefore must first apply for a Laudo Técnico de Avaliação, which consists of a report produced by ANVISA personnel who supervise the company’s facilities. Then, the company is allowed to apply for a Autorização de Funcionamento de Empresa, a document issued by ANVISA and filed at the municipality’s Department of Health Surveillance. This license needs to be renewed every year.
Authorization for handling controlled products
Some chemical products are controlled by the government because they feature or are used in the creation of inputs for the production of:
- Dangerous gases
In order for the company to handle these products, it must apply for authorization and be registered at the following supervising bodies:
- Civil Police for all the controlled products mentioned above
- Federal Police, for psychotropics, narcotics or products that may cause physical or psychological dependence. Registration with the Federal Police can be done here
- Military, for products controlled by the Armed Forces, especially chemical products with explosive features or that are used in the production of explosives. The company must apply for a Certificado de Registro or Título de Registro, which will be valid for three years