Juliana Mello

Juliana Mello

The Brazil Business


Forming a Non-governmental organization in Brazil

Juliana Mello

Juliana Mello

The Brazil Business


This article is a practical guide with the main steps of forming an NGO in Brazil. We also provide information about the most important legal aspects and procedures involving NGOs in the country.

According to ABONG, the Brazilian Non-Governmental Organization Association, there are currently 338 thousand NGOs in Brazil. They started to actuate in the country during the 1970s, in the context of the military dictatorship (1964-1986). However, by that time, the institutions weren’t defined as NGOs or ONGs in the acronym in Portuguese. They used to develop advisory to activities for social movements, usually in education or popular base, with a more political focus.

From 1990, the profile of these civil institutions changed dramatically. They started developing partnerships with the State and private companies, establishing the concept of entrepreneurial philanthropy in Brazil, and adopting the speech of sustainable development. The model followed by these institutions was copied from the United States.

Alongside the expansion of NGOs in the early 1990s, took place the spread of another term imported from the United States, and incorporated by several scholars and activists from NGOs, the so-called Third Sector.

The Third Sector was presented as a way found by civil society to fill the gap left by the State in meeting the social demands. This view has acquired great popularity and has been repeated widely in academic and disseminated by the media what contributed to the ever-increasing number of NGOs formed.

As the number of NGOs increased, that was a pressure for the creation of specific laws for them. Until in 1999, the Third Sector Law (Lei do Terceiro Setor), which we will see further.

Legal status of NGOs in Brazil

The Third Sector Law, nº 9.790, from 1999, provides for the qualification of legal persons of private law, as nonprofit Civil Society Organizations of Public Interest (Organizações da Sociedade Civil de Interesse Público, known as OSCIPs).

The law also disciplines and establishes the partnerships to be formed with the State and private companies, among other matters. In Brazil, four types of institutions comprise the Third Sector: associations, foundations, cooperatives and religious organizations.

Organizations of more than an year of existence can request the Ministry of Justice to be qualified as OSCIP. The qualification as OSCIP, allows an NGO to establish relationship with a government, having access to public resources, through a Partnership Agreement (Termo de Parceria.

The Partnership Agreement is a legal document for creation of partnerships solely between the Government and the NGO, is also an alternative to agreement between the parties for the realization of projects.

Under this law, can be qualified as OSCIP the institutions that:

  • Promote of social welfare
  • Promote of culture, protection and conservation of historic and artistic heritage
  • Promote of free education
  • Promote of free health services
  • Promote of food security and nutrition
  • Protect, preservation and conservation of the environment and promotion of sustainable development
  • Promote volunteerism
  • Promote economic and social development and fighting poverty
  • Experimental, non-profit, new socio-productive models and alternative systems of production, trade, employment and credit
  • Promote of established rights, construction of new rights and free legal advisory
  • Promote ethics, peace, citizenship, human rights, democracy and other universal values
  • Produce studies and research, development of alternative technologies and dissemination of information and technical and scientific knowledge.

After the Third Sector Law was implemented, the process of forming a Non-Governmental Organization got much less bureaucratic, what doens’t mean that it’s easy to establish an institution of that category in Brazil.

Basically, the formation of a NGO in Brazil can be divided in 5 steps, as follows:

Step 1: Convocation

As the name indicates, the first step is to gather a group of people with the same goals and ideas to create an NGO. Here, these people will do a research to prove the viability of the institution’s creation.

There is no minimum or maximum number of people to form an NGO, however, it is advisable to have at least a number of positions covering the managing positions and the board of directors. In the case of cooperatives, the Civil Code requires that the NGO must have at least seven integrants.

Step 2: Constituent Assembly

The Constituent Assembly is a meeting gathering all the components of the future NGO, its founding members. At this meeting, will be approved important points, such as name, mission, goal, headquarters and management of the NGO. This information is present in the NGO’s Statute draft, which is discussed, modified if necessary and then approved during the Assembly.

Before the meeting started, one should choose the member who will chair the assembly and the person who will act as secretary, taking note of all the issues discussed at the meeting, which will be noted in the Minutes of the Assembly.

Step 3: Statute

Below you can check a few essential items that should be contained in the NGO’s Statutes:

  • Name and acronym of the organization
  • Headquarters and jurisdiction
  • Goals and objectives
  • If the partners liable for the obligations of the company
  • Who is responsible for the entity
  • Members and their types, input and output, rights and duties
  • Assembly, board of directors, supervisory board
  • Duration
  • How the statutes are modified
  • How the entity is dissolved
  • What is the destination of the assets in case of dissolution

Step 4: Announcement of the Administration body

The election of the Board of Directors must follow what was approved in the NGOs Statute, and after elected, should be given ownership of the elected positions.

Finally, the NGO was founded, however, it still doesn’t have "status" of legal entity, which only occurs after some bureaucratic procedures.

Step 5: Legal registration

In order to register the NGO, the integrants must be prepared to bear with the costs of registration and third parties, as it is necessary to contract the services of a lawyer or an accountant. Costs vary from registry to registry office and professional professional.

On top, the founding members can count on values ranging from BRL 500,00 (five hundred reais) to BRL 1.000,00 (one thousand dollars) of total costs (copies, endorsements, rates and outsourced services). The money is often achieved through donations, especially if the group already has a history of previous actions in the community.

With the statute approved, the Minutes and attendance list signed, the NGO must hire a lawyer to legitimize the documents adopted at the meeting and forward them to the local Civil Registry Office (Cartório de Registro Civil) along with other documents.

The most commonly required documents are:

  • Three copies of the NGO’s Statute on the letterhead of the NGO
  • Three copies of the Constituent Assembly’s Minutes, signed by the NGO’s president and other officers
  • Book of original proceedings;
  • Payment of the Civil Registry Office’s fees
  • Copies of the Qualified Relationship Management (name, position, marital status, birth, address, occupation, identity and social security numbers);
  • Three copies of the list of charter members.

After this step, the NGO is legally registered before the Ministry of Justice. However, it’s also necessary to be registered at the Federal Revenue Service. It is recommended at this time that NGOs have an accountant or accounting firm qualified that will provide the tax records, labor and require the registration of for obtaining the CNPJ (National Register of Legal Entities).

With the CNPJ in hands, NGOs can access a bank account, make terms of partnerships and contracts, hire employees, receive resources, issue receipts, among other actions.

Besides the legal records, there may be needed to register the NGO supervisory bodies related to the object of its social status: social assistance, children and adolescents, education etc.

NGOs and taxes

In most cases, Non-Governmental Organizations are legalized in the form of civil nonprofit organizations. The Income Tax Regulations establishes certain conditions for which these institutions enjoy tax exemption of Income Tax (IRPJ) and Social Contribution on Net Income (CSSL). It is noteworthy that no obedience to such conditions may result in taxation by IRPJ and CSLL, like a for-profit company.

Are considered nonprofits the institutions that do not have the surplus or, if present, the revenue is fully intended to maintain and develop their social goals. For that, any value the NGO receives, from donations or other transfer of resources is taxable. Are considered exempted all the institutions listed on the “Legal Status of NGOs in Brazil” topic. Remembering that the exemption applies only for IRPJ and CSLL taxes. The exemption doesn’t cover income tax returns and capital gains earned on investments in fixed or variable income.

For the enjoyment of exemption the entities are required to:

  • Not compensate in any way, its officers for services rendered
  • Fully apply their resources in maintaining and developing their social goals.
  • Full bookkeeping all the revenues and expenses in the formal books to ensure its accuracy
  • Retain, for a period of five years from the date of issuance, documents proving the origin of their revenue and realization of their expenses, as well as performing any other actions that modify the state of its assets
  • Report annually, Income Statement, in accordance with the provisions of the act of the Internal Revenue Service
  • Ensure the allocation of its assets to another institution that meets the above conditions, in the case of merger, spin-off or closure of its activities, or public agency.

Currently, civil nonprofit institutions pay PIS based on their employee's payroll and don’t pay COFINS.

Brazilian NGOs

Below, we prepared a short list of better known Brazilian NGOs. By clicking on their names, you can have access to their institutional websites to get further information.