BRAZIL LAW AND PRACTICE Contributed by: Alan Campos Elias Thomaz, Juliana Sene Ikeda, Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Campos Thomaz Advogados
• a preliminary legal and regulatory overview of the sector of investment and determination of the own - ership structure and level of foreign participation; • submission of an application to the competent authority to request prior authorisation from the regulatory body, submitting the necessary docu - ments; and • registration with BACEN. Foreign companies that do not obtain the necessary prior approval to operate in Brazil may face various consequences, including fines, confiscation of goods and even a ban on operating in the country. 7.2 Criteria for National Security Review In Brazil, there is no single review authority or uniform test for assessing the security implications of foreign investment. Instead, security-related scrutiny arises only in specific contexts, such as land, border areas, media, telecommunications and financial institutions. The determining factor is control and influence, not the structure of the investment. Partnerships, sover - eign investors and minority shareholders are treated according to the same principles, with greater atten - tion only when national interests, sovereignty or defence considerations may be directly affected. 7.3 Remedies and Commitments Foreign investors operating in Brazil are generally required to comply with a range of economic, social and environmental commitments, ensuring that their activities align with the country’s development goals and regulatory standards. These obligations vary by sector but typically include: • job creation for Brazilian workers; • minimum capital investment requirements, par - ticularly in strategic sectors such as infrastructure, renewable energy and manufacturing; • environmental impact assessments (EIAs) prior to undertaking projects in environmentally sensitive industries such as mining, energy and agriculture; • local content requirements, obliging investors in sectors like oil, gas and construction to prioritise Brazilian goods, services and labour; • joint venture obligations in certain strategic or sensitive industries (eg, defence, telecommunica -
tions, media), where foreign investors may need to partner with Brazilian entities; • compliance with domestic legislation, including labour, tax, environmental and anti-corruption laws; • sector-specific licensing and approvals, particularly in regulated areas such as infrastructure, energy and mining; • adherence to corporate governance standards that promote transparency, accountability and ethical business practices; • periodic reporting obligations, requiring the sub - mission of operational and financial information to Brazilian authorities to demonstrate compliance with legal and contractual commitments; • reinvestment requirements, which may encourage or oblige investors to reinvest a portion of their profits into local projects that foster job creation or regional development; and • non-compete obligations, applicable in certain cases to prevent foreign investors from engaging in direct competition with local enterprises for a defined period or under specific conditions. Foreign investors who are denied investment authori - sation by Brazilian authorities have the right to chal - lenge such decisions in court. As a general rule, inves - tors are expected to exhaust administrative remedies before resorting to judicial action, unless the refusal clearly violates a constitutional or legal right. At the administrative level, the investor may request clarification by the relevant regulatory authority and, where permitted, file an appeal within the agency or to a higher administrative body. The specific procedure depends on the authority involved and the applicable regulations. In case the administrative options are exhausted or deemed ineffective, the investor may file a lawsuit before the Brazilian judicial courts. In general, com - mon options include a civil lawsuit, writ of mandamus ( mandado de segurança ) and constitutional claims. Although judicial proceedings in Brazil may take sev - eral years, the timeframe for challenging a decision will depend on the type of legal action being pursued. When successful, such legal challenges may result in
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