Amendments to the Foreign Investment Register System in Brazil

The Brazilian Central Bank (“BACEN”) requires the registry, in different modalities, of the foreign capital entered or existing in Brazil, in currency or in assets, and the financial transactions resulting of it, in the Electronic System of the Brazilian Central Bank (“SISBACEN”).

On January 30 of 2017, new procedures for the registration of the foreign investment before the BACEN shall come into effect, in accordance to the Resolution No. 4,533/2016 and to the Circular No. 3,814/2016 of BACEN. The main changes are briefly described below.

The company receiving the foreign investment, by means of mandataries, shall be the sole responsible for the Electronic Registration Statement (“RDE”) of the Direct Foreign Investment (“IED”) in Brazil. The non-resident investors may constitute a mandatary in Brazil to consult its registered investments.

Additionally, the new rules determine that the capitalizations of profits, of dividends, of interests on shareholders’ equity and of reserves of profits shall be registered as re-investment. The registration of the distribution of profits and of interests on shareholders’ equity, when involving remittance of capital abroad, shall be automatically effected on module RDE-IED, based on the exchange transactions.

In addition, the requirement of registering the import of assets intended to the Brazilian companies’ capital pay-up, on module RDE-ROF (Financial Operation Registration) previously to the IED register on module RDE-IED, has been revoked.

Furthermore, the information related to the net equity amounts and to the paid-up corporate capital of the receiving companies, as well as the foreign investors paid-up amounts, shall be duly updated up to January 31 of each year, regarding December 31 of the latest year, or within thirty (30) days, counted as from the occurrence of an event that modifies the foreign investor corporate interest.

Finally, the new procedures determine that the receiving companies of IED with assets or net equity equal to or exceeding R$ 250,000,000.00 shall provide quarterly economic-financial statements to the BACEN.

The Corporate Department of Kestener, Granja & Vieira Advogados is available to provide any further information required on this subject.

This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from KGV Advogados in relation to the matters herein addressed. Copyrights are reserved to Kestener, Granja & Vieira Advogados.