Deadline for companies and others obliged to provide information about their ultimate beneficial owners is 12/31/2018.
National entities, as well as entities domiciled abroad that hold interest in a company in Brazil must provide information to the Brazilian Federal Revenue Service about their ultimate beneficial owners (UBO)1.
- Who must provide information about beneficial owners?
- What is a beneficial owner?
- What documents and information must be submitted?
- Who does not need to provide information?
- When must entities provide such information?
- What happens if the information is not provided by entities domiciled abroad?
1. Who must provide information about beneficial owners?
- Investment clubs;
- Entities domiciled abroad that hold rights or perform certain activities in Brazil;
- Foreign banking institutions that carry out purchase and sale of foreign currency with banks in Brazil; and
- Special partnerships.
2. What is a beneficial owner?
It is an individual:
- who, at the end of the chain, directly or indirectly owns, controls or has significant influence over an entity; or
- on whose behalf a transaction is conducted.
Significant influence is presumed when the individual:
- directly or indirectly has more than 25% of the capital of the entity; or
- directly or indirectly holds or has preponderance in corporate resolutions and the authority to elect the majority of the administration of the entity, even if he/she does not control it.
3. What documents and information must be submitted?
- The articles of incorporation/association/bylaws or certificate of entire information of the entity;
- ID or passport of the legal representative of the entity in the country of origin;
- Document demonstrating the authority of the legal representative in the country of origin of the foreign entity (minutes of election or equivalent document), if this information is not in the articles of incorporation/association/bylaws;
- Certified copy of the power of attorney appointing its legal representative in Brazil (if not in the articles of incorporation/association/bylaws), who must be domiciled in Brazil, with authority to manage the assets and rights of the entity in Brazil and represent it before the Brazilian Federal Revenue Service;
- Certified copy of the ID of the representative of the foreign entity with CNPJ; and
- Members and Administrators Table – QSA.
All documents must be apostilled and accompanied by its sworn translation, pursuant to the formalities/templates of Instruction 1,634/2016.
4. How to submit the documents and information?
After the enrollment of the entity and within 90 days, the legal representative must access the app "Coletor Nacional" and inform who its beneficial owners are, issuing a DBE (Basic Entry Document) for CNPJ.
Information relating to the beneficial owner must be provided in a new specific form (Beneficial Owners Form), by checking the option "Beneficial Owners" on FCPJ, at the beginning of the information process.
The information required for each beneficial owner are "name", "date of birth", "country of citizenship" and "country of residence". If the beneficial owner resides in Brazil and/or is Brazilian, the Individual Taxpayer Registration Number will also be required.
5. Who does not need to provide information?
Among other cases, publicly-held companies in Brazil or in countries in which there is disclosure of significant shareholders that are not domiciled in a jurisdiction of favored (tax haven) or privileged taxation.
6. When must entities provide such information?
- For entities already enrolled with CNPJ before 07/01/2017, when there is any amendment to the registration information after that date or, if not, by 12/31/2018;
- For entities incorporated as from 07/01/2017, this information should have already been provided on the date of its enrollment with CNPJ.
7. What happens if the information is not provided by entities domiciled abroad?
- will have their CNPJ suspended;
- will be prevented from trading with banking institutions, like using their current accounts, investing and getting loans;
- may only perform transactions for investment return to the country of origin or for the fulfilment of obligations assumed before the suspension.
 According to Instruction 1,634/2016 of the Revenue Service of Brazil that brought provisions about the National Registry of Corporate Taxpayers ("CNPJ").
Originally published October 22 2018
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.