Copyright 2020 Britcham Brasil The British Chamber of Commerce and Industry in Brazil - Britcham Rua Ferreira de Araújo, 741 - 1st floor 05428-002 São Paulo SP Brazil First published by The British Chamber of Commerce and Industry in Brazil - Britcham in 1998. This digital edition published in 2020. All rights reserved. This digital book may not be reproduced in whole or in part, stored in a retrieval system or transmitted in any form or by any means without prior permission from the publishers. This digital book is distributed subject to the condition that it may not, by way of trade or otherwise, be lent, sold, hired out or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser. Britcham Coordination Fabrício Soares Legal, Tax & Regulatory Committee Luiz Guilherme Gomes Primos - President, São Paulo Paula Costa - President, Rio de Janeiro Rômulo Cristiano Coutinho da Silva - Vice-President, São Paulo Paula Abreu - Vice-President, Rio de Janeiro Designed by Review by Illustration by André Bogdan Steve Wingrove Odilon Moraes www.aloby.com.br Wordplay Traduções São Paulo, Dec. 1999 Disclaimer This digital publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting or other personal services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. 2 Doing BUSINESS IN BRAZIL 7th edition The British Chamber of Commerce and Industry in Brazil BRITCHAM São Paulo Centro Brasileiro Britânico Rua Ferreira de Araújo, 741 - 1st floor 05428-002 - Pinheiros - São Paulo - SP Phone: +55 11 3819-0265 Rio de Janeiro Av. Graça Aranha, 1 - 6th floor 20030-002 - Centro - Rio de Janeiro - RJ Phone: +55 21 2262-5926 Paraná Rua Mauá, 1248 80030-200 - Centro Cívico - Curitiba - PR Phone: +55 41 3021-2100 Minas Gerais Rua Timbiras, 1.754 30140-061 - Lourdes - Belo Horizonte - MG Phone: +55 31 3248-2300 [email protected] www.britcham.com.br 3 Contents FOREWORD ...................................................................................... 8 ACKNOWLEDGEMENTS .............................................................. 10 ABBREVIATIONS ........................................................................... 12 1. AN OVERVIEW OF BRAZIL ................................................. 26 Introduction ................................................................................ 26 The Political System ................................................................... 30 Political Divisions ...................................................................... 34 The Legal System ....................................................................... 36 Recent Political and Economic History .................................. 38 International Treaties ................................................................. 43 Logistics ...................................................................................... 46 2. FOREIGN INVESTMENT IN BRAZIL ................................ 50 Direct Investment ....................................................................... 50 Indirect Investment ................................................................... 54 4 3. CORPORATE LAW ................................................................. 60 Different Types of Corporate Entities ..................................... 60 Duties and Liabilities of Directors and Officers .................... 78 Resignation of Directors and Officers ..................................... 82 Restructuring and Insolvency .................................................. 82 Media and Foreign Investment ................................................ 87 Managers and Investors’ Liability .......................................... 89 4. CORPORATE CRIMINAL LAW ........................................... 114 5. CONTRACT LAW ..................................................................... 124 The Agency and Distribution Relationship ........................... 124 The Franchising Agreement ..................................................... 132 Electronic Commerce ................................................................ 138 6. TAX LAW .................................................................................... 146 General Rules of Brazilian Tax System ................................... 146 Taxation of Indirect Investment ................................................ 169 Transfer Pricing on Commercial and Financial Transactions .... 178 Tax Aspects of Electronic Commerce ...................................... 183 Importing and Exporting .......................................................... 195 Tax Incentives ............................................................................. 197 7. LABOUR LAW ......................................................................... 214 Employment Law ...................................................................... 214 Immigration and Expatriate Rights ........................................ 220 Stock Option Plans .................................................................... 238 8. BANKING LAW ...................................................................... 244 The Brazilian Securities and Exchange Commission ........... 244 B3 S.A. ......................................................................................... 248 Public Offerings ......................................................................... 250 Debentures .................................................................................. 253 Mortgage and Securitisation Companies ............................... 256 Investment Funds ..................................................................... 260 9. PROJECT AND TRADE FINANCE ...................................... 274 5 Project Finance ........................................................................... 274 Trade Finance ............................................................................. 280 10. COMPETITION LAW ............................................................ 286 11. PUBLIC UTILITY BIDS AND CONTRACTS .................. 294 Public Bidding and Public Contracts .................................... 294 Public Private Partnerships .................................................... 309 12. ENVIRONMENTAL LAW .................................................... 316 Brazilian Biodiversity and the ABS Laws ............................. 316 The Legal Framework for Environmental Protection ......... 321 Enforcement of Laws and Regulations: The Question of Liability .. 324 13. REAL ESTATE AND PROPERTY ....................................... 332 14. REGULATED SECTORS ....................................................... 344 Telecommunications (ANATEL) ............................................ 344 Electric Energy (ANEEL) ........................................................ 350 Oil & Gas (ANP) ....................................................................... 355 Health (ANVISA and ANS) .................................................... 368 Hydro Resources (ANA) .......................................................... 380 Cinema (ANCINE) ................................................................... 383 Transport (ANTAQ, ANTT and ANAC) ............................... 389 15. SOCIAL SECURITY ............................................................... 394 Public Social Security ............................................................... 394 Complementary Social Security ............................................. 399 16. INSURANCE & REINSURANCE ....................................... 404 Insurance ................................................................................... 404 Reinsurance .............................................................................. 406 17. INTELLECTUAL PROPERTY .............................................. 412 Patents ....................................................................................... 412 6 Trademarks ................................................................................ 420 Well-Known Trademarks ......................................................... 422 Law for Innovation in Technology ......................................... 424 Domain Names ......................................................................... 431 IP and the Internet .................................................................... 434 Biotechnology ............................................................................ 436 Copyright and Software .......................................................... 441 Piracy ......................................................................................... 442 18. CONSUMER RIGHTS ........................................................... 446 19. AVIATION ............................................................................... 454 The Brazilian Aeronautical Registry ...................................... 454 Aircraft Agreements ................................................................. 456 Aircraft Mortgages ................................................................... 460 Repossession and Foreclosure ................................................. 463 Air Services