The Federal Revenue of Brazil has established new rules concerning the Taxpayer Numbers (“CNPJ”) of foreign entities holding assets in Brazil, as one of the means to prevent and control corruption, money laundering and tax evasion.
Currently, for the issuance or updating of CNPJ enrollment information based on documents on the foreign company’s legal representatives and its chain of control up to the final beneficiaries or certain type of entities will have to be provided.
The foreign entities already registered with the CNPJ must adapt their enrollments to the new rules and submit such information/documents until December 31st, 2018 or, before such date, in case they proceed with any enrollment updating. For new enrollments, foreign companies will have up to 90 days to present the required information and documents.
As a general rule, a final beneficiary is considered an individual who holds, directly or indirectly, more than 25% of the foreign entity’s capital and/or holds or exercises preponderance in the corporate resolutions and the power to elect the majority of the managers of the entity, even if it does not control it.
Certain entities are excluded from the obligation to inform the final beneficiaries, as publicly-held foreign companies duly incorporated in countries that requires the public disclosure of all the shareholders and that are not submitted to favored taxation, and the investment funds regulated by Brazilian Securities and Exchange Commission – CVM.
Legislation also provides specific rules for the entities domiciled abroad that are enrolled with the CNPJ exclusively to carry out investments in the financial or capital market.
We would like to emphasize that as of January 1st, 2019, foreign companies that have not complied with the new rules imposed by the Federal Revenue will have their enrollments with the CNPJ suspended, and will be prevented from transacting with financial institutions, including operating bank accounts, carrying out financial investments and obtaining loans.
Our Corporate team, led by our partner Renata Antiquera, is at your disposal to assist you in regularizing CNPJs. Please contact firstname.lastname@example.org