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
and infrastructure concessions involving foreign spon - sors or multilateral financing. Data Protection, Cybersecurity and Digital Regulation In addition to financial and sectoral oversight, FDI in data-intensive or technology sectors may engage data protection and cybersecurity regulations. The Brazilian General Data Protection Law ( Lei Geral de Proteção de Dados , or LGPD; Law No 13,709/2018) establishes comprehensive rules for the processing of personal data, requiring foreign companies operating in Brazil or handling the data of individuals located in Brazil to appoint a local representative and com - ply with data subject rights, security obligations and cross-border transfer restrictions. The National Data Protection Authority ( Autoridade Nacional de Proteção de Dados ANPD) oversees com - pliance for data protection, with increasing jurisdic - tion over AI and digital markets regulation, and may impose fines up to 2% of a company’s Brazilian rev - enue (capped at BRL50 million per violation). Inves - tors acquiring companies with large user databases, AI systems or digital platforms should conduct privacy and cybersecurity due diligence, as non-compliance can significantly affect valuations and regulatory exposure. Environmental and Social Licensing Environmental approval is a cornerstone of project finance and infrastructure investment. Brazil’s Nation - al Environmental Policy (Law No 6,938/1981) and its implementing regulations require an EIA/environmen - tal impact report ( relatório de impacto ambiental RIMA) for projects with significant environmental effects, such as mining, energy or transport infrastructure. Federal, state or municipal environmental agencies issue licences at different stages (preliminary, instal - lation and operation). Foreign investors must ensure compliance with these multi-level procedures, which can affect project timelines. Conclusion Brazil’s regulatory landscape for foreign investment combines openness with selective oversight in sectors of strategic, financial or environmental relevance. Most foreign investments proceed without prior approval,
subject only to BACEN registration, tax compliance and sectoral licensing where applicable. However, projects involving defence, border lands, media, data or critical infrastructure require heightened scrutiny and co-ordination with specialised agencies. Foreign investors are encouraged to conduct early regulatory mapping and engage local counsel familiar with Central Bank, sectoral and compliance regimes, ensuring full alignment with Brazil’s evolving legal standards and international investment best practices. Brazil’s tax system is complex and multilayered, with powers divided among the federal, state and munici - pal governments. Companies operating in Brazil are subject to a combination of corporate income tax ( imposto de renda da pessoa jurídica IRPJ), social contribution on net profits ( contribuiçãosocialsobreo- lucrolíquido CSLL), value added and turnover taxes, and payroll-related contributions. Corporate profits are taxed under two primary regimes: the actual profit regime, in which tax is calculated on accounting profit adjusted for statutory inclusions and exclusions, and the presumed profit regime, which applies simplified presumptive margins to gross rev - enue. The actual profit regime is mandatory for large companies and financial institutions, while the pre - sumed profit regime is available to smaller entities. The combined nominal corporate tax rate, compris - ing 25% corporate income tax (IRPJ) and 9% social contribution (CSLL), results in an overall effective rate of approximately 34%. 9. Tax 9.1 Taxation of Business Activities Brazil does not treat partnerships as fiscally trans - parent. All corporations, whether domestically or for - eign-owned, are considered independent taxpayers. Branches of foreign companies are rare in practice, as they require prior authorisation and are subject to the same taxation as local entities. Most foreign investors therefore establish an Ltda or SA, both considered Brazilian tax residents if management is located in Brazil.
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