How to Set Up an Entity in Brazil

Brazil, the largest economy in Latin America and a gateway to a massive South American market, presents enormous opportunities for companies looking to expand globally. Establishing a local entity in Brazil can unlock access to a population of over 200 million people, diverse industries ranging from agribusiness and manufacturing to technology and services, and the benefits of operating under Brazilian corporate law.

That said, the process for opening an entity in Brazil involves navigating several layers of regulation (from federal to state to municipal), which makes setting up a local company more bureaucratic than in many other jurisdictions. Common challenges include securing required registrations (federal tax ID, state or municipal registrations, foreign-capital declarations), translating and legalizing foreign documents, and obtaining a local legal representative. But once established, a Brazilian entity gives you autonomy, control over revenue and operations, and full compliance with local laws—benefits that make this investment worthwhile for companies serious about expansion in Latin America.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Brazil?

In Brazil, opening an entity means formally incorporating a company (typically a local corporation or limited-liability company) and registering it with the relevant federal and state authorities. This grants the company legal status (a “pessoa jurídica”), enabling it to operate, issue invoices, hire staff, and comply with tax and regulatory obligations. Foreign businesses often set up a local subsidiary or limited liability company rather than a branch.

Entity overview in Brazil

Below is an overview of the main features of setting up a company in Brazil, especially as a foreign investor:

Step-by-step guide: How to open an entity in Brazil

Step 1: Choose the right structure

Foreign investors most commonly choose an LTDA (Limited Liability Company) because it combines liability protection with simpler governance and lower maintenance compared with a corporation (S.A.). An LTDA suits small to medium enterprises or service companies. An S.A. is more appropriate if you plan to raise capital, bring on many shareholders, or aim for a future public offering. A single-member company may be used if you're a solo entrepreneur; a branch of a foreign company is another possible route, though it involves additional regulatory and registration requirements.

Step 2: Verify business name availability

You must choose a unique business name and register it with the relevant state’s Board of Trade (Junta Comercial). The name must not already be in use by another company. This step — checking and reserving the name — is typically done during preparation of the incorporation documents filed with the Junta Comercial.

Step 3: Prepare incorporation documents

At a minimum, you’ll need the following:

• Articles of Association (Contrato Social) (outlining shareholders, share percentages, and company purpose)
• Passport or ID of each shareholder and director (appended with CPF for foreigners).
• Proof of a registered address in Brazil (a local business address).
• If shareholders are foreign and located abroad, notarized and—if required—apostilled and translated incorporation documents from the parent company (for foreign entities acting as shareholders).

Depending on the state and activity, additional licenses or consent may be required (e.g., municipal business license, environmental, or sector-specific permits).

Step 4: Register with the Board of Trade and obtain CNPJ

Submit the Articles of Association and required forms to the state-level Junta Comercial. Once approved, your company is incorporated at the state level. After that, you obtain a CNPJ (tax identification number) issued by the Receita Federal, which identifies your business as a legal entity under Brazilian law.

Upon registration, you receive an official corporate registration number and CNPJ, enabling you to issue invoices, sign contracts, open a bank account, and hire staff.

Step 5: Register for tax and social security

After incorporation and CNPJ issuance, register the company with federal and—if applicable—state and municipal tax authorities. For foreign shareholders or directors, ensure their CPF (Individual Taxpayer Registration Number) is obtained.

If you plan to hire employees or operate in regulated sectors, you might need social security registration and possibly municipal labour-related registrations or permits.

Step 6: Open a corporate bank account

Once you have the company registration (CNPJ), share certificates or Articles of Association, and proof of address and identity for your legal representative, you can open a corporate bank account at a Brazilian bank. Brazilian banking rules enforce KYC and compliance, and many banks require the account holder (or legal representative) to be present in person.

Opening a local bank account is mandatory for conducting operations: invoicing, payroll, domestic transactions, and foreign capital inflows.

Step 7: Set up payroll and employment compliance

If you intend to hire staff, you must set up payroll under Brazilian labour law. This includes employment contracts in Portuguese, social security and payroll tax registration, compliance with local labour regulations, and possible enrollment in social benefits or municipal licensing, depending on activity.

If the company is operating services subject to municipal regulation, you may need a municipal operating license (alvará), and in some sectors also inspection licenses (e.g., from fire safety authorities).

Discover how Elemental Enzymes accelerated regulatory approvals and market entry with Deel.

Post-registration obligations

After incorporation, Brazilian companies must adhere to several ongoing compliance obligations. You need to file corporate income tax (federal), possibly quarterly or annually, depending on revenue and chosen tax regime, and report any state or municipal taxes, depending on activity.

You must maintain accurate and up-to-date corporate records of shareholders, directors, and beneficial owners; if there are any changes, you must update the registry at the relevant Junta Comercial and notify the Receita Federal.

You’ll also need to track deadlines for filings, payroll and social security contributions, labour-law adherence, and renew any operational licenses or permits (e.g., municipal alvará, sector-specific licenses).

Maintain bookkeeping and retain accounting, payroll, HR, and transaction records as required under Brazilian accounting standards. For many companies, compliance with national accounting standards and statutory audit thresholds may apply depending on size and business type.

Taxes and financial considerations

You are responsible for:

• Corporate income tax: Commonly 15% federal IRPJ rate plus a 10% surtax on annual taxable profits exceeding BRL 240,000
• VAT / Sales & Services Taxes: Instead of a single VAT, Brazil uses a combination of federal and state levies; for goods and interstate/municipal transport of goods, state-level ICMS may apply; for services, municipal service tax (ISS) often applies
• Payroll / Social contributions: Standard 9% rate for social security contributions, and 15% for legal entities considered financial institutions, private insurance companies, and capitalization companies
• Accounting standards: Companies must comply with Brazilian accounting standards; larger companies may need audited financial statements depending on size and legal form

Discover how Climate-KIC navigated complex restructuring with Deel.

Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Brazil?
Typically, 60–90 days from the start of preparation to full registration and the ability to legally operate. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
For the most common structure (LTDA), there is no fixed minimum share capital requirement.

Can foreign companies own 100% of an entity in Brazil?
Yes. Foreign individuals or foreign entities can hold 100% ownership.

Do I need a local director or representative?
While directors can be foreign, if none of the directors or shareholders reside in Brazil, you must appoint a local legal representative (resident in Brazil) to act on behalf of the company for administrative and regulatory matters.

How much does it cost to register an entity?
Costs vary by state and complexity. Typical expenses include registration fees, notary and legalization, legal representation, and bank account setup. Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no. However, Deel’s Employer of Record (EOR) lets you hire and pay talent immediately while your entity setup is in progress.

Can Deel help me open an entity in Brazil?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.