EXTENSION OF THE DEADLINE FOR THE APPOINTMENT OF THE FINAL BENEFICIARY

Today (28.12), Brazilian Federal Revenue published Normative Instruction No. 1,863 (“IN RFB No. 1,863/2018“) which extended in 180 (one hundred and eighty) days the deadline for all Brazilian companies duly incorporated to update their registration data and appoint final beneficiaries. IN RFB No. 1,863/2018 also revoked the Brazilian Federal Revenue’s Normative Instruction No. 1.634/2016.

For purposes of updating the registration data before Brazilian Federal Revenue, based on article 8, paragraphs 1 and 2 of IN RFB No. 1,863;2018, the following are considered final beneficiaries:

(i) a natural person who, in as a last instance, direct or indirectly, has controle or significant influence over the entity.
(ii) natural people on whose behalf a transaction is conducted;
(iii) a natural person who owns, directly or indirectly more than twenty-five percent (25%) of the company’s capital; and
(iv) a natural person who, directly or indirectly, exercises control of the company, and/or holds or exercises a preponderance in corporate resolutions and the power to elect a majority of the company’s management, even without controlling it;

Compliance with the obligation to appoint a final beneficiary is essential, since, pursuant to article 9 of IN RFB No. 1,863/2018 noncompliance may result in sanctions against foreign companies and foreign banking establishments, such as suspension of a Company’s CNPJ/MF registration and obstacles to transactions with banking establishments, including; current account transactions, performance of financial investments and obtaining of loans, except for transactions required to return the investment to the country of origin and the compliance with obligations assumed before the suspension.

We emphasize that the process for appointing a final beneficiary is not usually quick as it depends on various procedures, as well as the analysis of an extensive list of documents. Therefore, the prompt compliance with this obligation should be the focus of companies that have foreign companies in their corporate structure, except those exempted of this obligation by IN RFB No. 1,863/2018.

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

Fabio Alonso Vieira
Phone.: +55 11 3149-6111
fabio.vieira@kgvlaw.com.br

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.