Last year, we provided a practical guide to the incorporation process in Brazil which you can find here.

For companies that want to keep a light presence, the next logical question is how much will the on-going costs be?

It is important to remember that Brazilian companies must have, from day one, a local accountant and an administrator (director) who lives in Brazil.

Foreign partners must also have a local representative in Brazil. This representative may, sometimes, be the director or a Brazilian partner. In other cases, they must be hired to perform this particular job.

Because of all this, generally, every company will face some mandatory monthly expenses. It is important to remember that these are ranges only to give you an idea of how much you should budget.

  • Monthly cost for a nominee administrator is at least USD$600.00 per month. A professional administrator, hired for the job, would cost around USD$1,500.00.
  • The administrator must collect social security, which is based on the value he receives. The minimum payment is about USD$90.00.
  • Monthly cost for an accountancy firm starts around USD$350 per month. The average cost in São Paulo is USD$500.
  • Monthly cost for a local representative for the foreign investors starts at USD$350 per month

Starting July 2017, this representative will be subject to more government scrutiny and, at the same time, will be required to have more managerial power over the investor`s assets. This will increase the representatives risk of being liable for tax fraud or labor debts.

This comes along with a rule that requires that the ultimate beneficial owners of any company investing in Brazil be revealed to the Federal Government.

The result of these rules, I think, is that the cost of keeping local representatives will increase. Instead of using young professionals or junior accountants as representatives, the investors will have to select lawyers or executives. Costs with Directors and officers' liability Insurance (D&O insurance) should also go up.

On the plus side, it looks like the new president is trying taking steps to speed up the registration of foreign investment. We sure hope so!

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.