LEGAL GUIDE: BUSINESS IN BRAZIL COORDINATED BY DURVAL DE NORONHA GOYOS, JR. 9TH EDITION 2014 DADOS INTERNACIONAIS DE CATALOGAÇÃO NA PUBLICAÇÃO (CIP) (Câmara Brasileira do Livro, SP, Brasil) Legal Guide: Business in Brazil coordinated by Durval de Noronha Goyos, Jr. 9th Ed. São Paulo: Observador Legal, 2014 English Edition Edição em inglês ISBN 978-85-85548-36-0 1. Brasil -Política Econômica -Leis e legislação 2. Direito Econômico -Brasil I. Goyos Júnior, Durval de Noronha. 01-1123 CDU-34:33(81)(094.56) Índices para catálogo sistemático: I. Brasil: Leis comentadas: Direito Econômico 34:33(81)(094.56) 2. Leis: Direito Econômico: Comentários: Brasil 34:33(81)(094.56) ISBN 978-85-85548-36-0 Copyright © 2014 by OBSERVADOR LEGAL EDITORA LTDA. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, and any information storage and retrieval system, without the express written permission of the publisher. Printed in the Federative Republic of Brazil. OBSERVADOR LEGAL EDITORA LTDA. Rua Branco de Moraes, 80, cj. 05 04718-010 – São Paulo – SP – Brazil Tel. (11) 5184-2471 Fac Simile (11) 5184-0097 www.observadorlegal.com.br LEGAL GUIDE: BUSINESS IN BRAZIL Coordinated by Durval de Noronha Goyos, Jr., member of the Brazilian and Portuguese Bars and solicitor of the Supreme Court of England and Wales, Senior Partner of Noronha Advogados. Authors of this edition: Durval de Noronha Goyos, Jr. Jose Paulo L. Alves Pequeno Robert E. Williams Ingrid Schwarz R. de Mendonça Vera Helena de Moraes Dantas Monica Missaka Rodrigo Gomes Maia Thiago Santos Barroca Daniel Henrique Calvoso Alvarenga Luana Silva Santoro João Guilherme G. Ferreira David Benoliel Pedro Ivo de Menezes Cavalcante Victor Ti Yuen Ng Fernanda C. Uip Pinheiro Pedro Jaqueline Hye Jin Chang Eric Robert Batista Cíntia Silva Busse Ana Carolina Rochedo Emy Takahashi Tamehiro Although every effort has been made to assure the accuracy of the information contained in this guide as of the date of publication, nothing herein should be construed as giving legal advice. Obviously, the law is subject to change, and it changes very often in Brazil. In addition, the application of the law to specific circumstances can present complex issues that are beyond the scope of this guide. This publication is intended to provide general legal information pertaining to investing or doing business in Brazil. NORONHA ADVOGADOS will be pleased to provide more detailed information on request. NORONHA ADVOGADOS www.noronhaadvogados.com.br Av. Brigadeiro Faria Lima, 1485 Av. Rio Branco, 89, sala 901 Torre Norte, 17º andar Edificio Manhattan Tower 01452-002 - São Paulo – SP – Brasil 20040-004 - Rio de Janeiro – RJ – Brasil Tel.: +55 11 5188-8090 Tel.: +55 21 2233-9322 Fax.: +55 11 5184-0097 Fax.: +55 21 2233-9407 [email protected] [email protected] SHS - Quadra 6, Bloco C, Conj. 715 Av. Sete de Setembro, 4214, Conj.505 Edifício Business Center Tower Brasil XXI 80250-210 - Curitiba - PR - Brasil 70316-109 - Brasília - DF - Brasil Tel.: +55 41 3343-2909 Tel./Fax: +55 61 3202-1877 Fax: +55 41 3082-2884 [email protected] [email protected] Rua Antônio Maria Coelho, 2989 Rua do Chacon 335, Casa Forte 79020-210 – Campo Grande - MS - Brasil 52061-400 - Recife - PE – Brasil Tel./Fax.: +55 67 3316-1000 Tel/fax.: +55 81 3441-9080/3267-5787 [email protected] /3304-7342 [email protected] Rua Erê, 42 - Bairro Prado 4th floor, 193/195 Brompton Road 30411-052 - Belo Horizonte - MG - Brasil London SW3 1NE - England Tel: +55 31 3337- 2711 Tel.: +44 20 7581-5040 Fax: +55 31 2555 -6792 Fax.: +44 20 7581-8002 [email protected] [email protected] 1221 Brickell Avenue, 9th floor Av. António Augusto Aguiar, 148, 4ºC/5ºC Miami - Florida - 33131- USA 1050-021 - Lisboa - Portugal Tel.: +1 305 377-8782 Tel.: +351 21 389-4178 Fax.: +1 305 374-6146 Fax.: +351 21 389-4179 [email protected] [email protected] Bouchard, 557/599, Piso 20 450 Fushan Road 14th floor, Suite F Edificio Bouchard Plaza 200122 - Pudong - Shanghai - China C1106ABG - Buenos Aires - Argentina Tel.: +86 21 6876-6311 Tel./Fax.: +54 11 4850-1379 Fax.: +86 21 6876-6312 [email protected] [email protected] 9F, Tower II, China Central Place 14, Community Centre, East of Kailash 79 Jianguo Road, Chaoyang District New Delhi – 110065 – India Beijing 100025 – China Tel.: +91 11 2642-4942/4943 Telefone : +86 10 5920-4499 Fax.: +91 11 2622-0287 Fac simile: +86 10 5920-4222 [email protected] [email protected] 1401, 14/F World Commerce Centre, Harbour City, 7-11 Canton Road, Tsimthatsui, Kowloon, Hong Kong Tel.: +852 2736-7372 Fax.: +852 2736-8895 [email protected] Services: International Business Transactions; Mergers and Acquisitions; Contracts; Corporations; Banking; Securities and Financial Law; Insurance Law; Administrative Law; Taxation; Social Security; Commercial Litigation; Labour; International Trade Law; Foreign Capital; Intellectual Property; Real Estate; Environment; Agrarian; Energy, Petroleum and Mining; Privatisation; Maritime and Aviation Law; Competition and Antitrust Law; Consumer Law; Electronic Commerce Law; Sports Law; Filming; Arbitration. INDEX LEGAL GUIDE: BUSINESS IN BRAZIL I. INTRODUCTION TO THE FIRST EDITION .................................... 13 II. INTRODUCTION TO THE SECOND EDITION ............................... 15 III. INTRODUCTION TO THE THIRD EDITION ................................... 17 IV. INTRODUCTION TO THE FOURTH EDITION 2000 ...................... 19 V. INTRODUCTION TO THE FIFTH EDITION 2001 ........................... 21 VI. INTRODUCTION TO THE SIXTH EDITION 2003 .......................... 23 VII. INTRODUCTION TO THE SEVENTH EDITION 2007 .................... 25 VIII. INTRODUCTION TO THE EIGHTH EDITION 2011 ........................ 27 IX. INTRODUCTION TO THE NINTH EDITION 2014 .......................... 29 BASIC INFORMATION .............................................................................. 31 1. FORMS OF FOREIGN INVESTMENT .............................................. 33 1.1. General Features .......................................................................... 33 1.2. The Central Bank of Brazil and Foreign Capital ......................... 34 1.3. Foreign Direct Investment ........................................................... 35 1.4. Stock and Securities Market ........................................................ 38 1.5. Foreign Loans .............................................................................. 41 1.6. “Contaminated Capital” ............................................................... 42 1.7. Foreign Capital Restrictions......................................................... 43 1.8. Integrated System of Foreign Trade on Services, Intangibles and Operations that Result in Variation on Assets (Sistema Integrado de Comércio Exterior de Serviços, Intangíveis e Outras Operações que Produzam Variações no Patrimônio - SISCOSERV).............. 47 2. BUSINESS ORGANIZATION ............................................................. 49 2.1. Types of Companies ..................................................................... 49 2.2. The Sociedade Anônima (S.A.) .................................................... 49 2.3. The Sociedade Limitada (LTDA). ................................................ 63 2.4. Rules Common to the S.A. and the LTDA. .................................. 68 2.5. Incorporation Procedures ............................................................. 69 2.6. Additional Considerations............................................................ 70 2.7. The Individual Limited Liability Organisation - EIRELI ............ 70 3. TAXATION ............................................................................................ 72 3.1. The Brazilian Tax System ............................................................ 72 3.2. Taxation of Individuals ................................................................ 73 3.3. Taxation of Legal Entities ............................................................ 78 3.4. Double Taxation Treaties Entered Into By Brazil ........................ 95 3.5. Transfer Pricing ............................................................................ 95 3.6. Thin Capitalization Rules............................................................. 99 4. INTELLECTUAL PROPERTY ........................................................ 101 4.1. Patents ........................................................................................ 102 4.2. Trademarks ................................................................................. 103 4.3. Microchip Designs ..................................................................... 104 4.4. Technology Supply and Technical and Scientific Assistance Services ...................................................................................... 105 4.5. Copyright ................................................................................... 106 4.6. Software ..................................................................................... 106 5. INTERNATIONAL TREATIES ........................................................ 108 5.1. Preamble..................................................................................... 108 5.2. United Nations ..........................................................................