BRAZIL Law and Practice Contributed by: Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Azevedo Sette Advogados
• registration with the Central Bank of Brazil. Foreign companies that do not obtain prior approval to operate in Brazil may face various consequences, including fines, confiscation of goods, and even a ban on operating in the coun - try. The specific penalties depend on the type of activity the foreign company is carrying out and the laws that regulate this activity in Brazil. For example: • foreign companies that carry out imports or exports without the proper licence/authorisa - tion can have their goods seized, be fined, and even have their products vetoed at customs, according to the Brazilian Federal Revenue Service; • foreign companies that invest in activities that require prior registration and fail to do so can be fined and have their investments blocked; and • foreign companies that provide services in Brazil without the appropriate registration/ licence can be fined and banned from operat - ing, in accordance with the applicable laws. In general, the following consequences should be considered: • administrative sanctions – fines imposed by regulatory agencies, suspension or revocation of licenses/concessions; • BACEN penalties – failure to register foreign capital may result in fines, restriction on profit remittances or capital repatriation, exchange rate penalties or tax liabilities; and • civil and criminal proceedings – violations in sectors involving national security may trigger civil and criminal proceedings, including asset forfeiture, revocation of ownership rights, and
court injunctions or bans on future participa - tion. It is essential that foreign companies wishing to operate in Brazil inform themselves in detail about the specific laws and regulations applica - ble to their type of activity and seek legal advice to ensure that they comply with Brazilian leg - islation. Non-compliance with laws can lead to serious consequences for the company, includ - ing being banned from operating in the country. 2.3 Commitments Required From Foreign Investors Foreign investors in Brazil are required to meet a range of commitments aimed at ensuring that their investments align with Brazilian’s econom - ic, social and environmental goals. The following commitments are typically required from foreign investors in Brazil: • creation of job for local workers; • minimum capital investments may be required, especially in sectors of infrastruc - ture, renewable energy, and manufacturing; • conduction of environmental impact assess - ments (EIA) before investing in certain indus - tries (eg, mining, energy, agriculture); • investors in sectors such as oil, gas and con - struction are often required to use Brazilian goods, services and labour; • in certain strategic or sensitive sectors (eg, defence, telecommunications, media), foreign investors may be required to form joint ven - tures with Brazilian companies; • compliance with local laws (labour, anti-cor - ruption and tax); • licensing and approvals in sectors such as infrastructure, energy and mining; • adherence to Brazilian corporate governance standards that prioritise accountability, trans - parency, and ethical business practices;
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