BRAZIL Law and Practice Contributed by: Alberto Malta, Davi Ory, Ana Vogado and Maria Eduarda Amaral, Malta Advogados
panies may also resort to structured trans - actions, securitisation, fund of investment in receivables (FIDCs) and customised contractual arrangements such as built-to-suit and sale and leaseback transactions. These approaches pro - vide competitive terms and risk mitigation. 3.2 Typical Security Created by Commercial Investors The securities typically created by commercial investors are primarily fiduciary alienation and mortgages of real estate. The main distinction between these forms of securities lies in the property of the real estate. Unlike a mortgage, where the debtor is the owner of the real estate, in a fiduciary alienation the creditor holds the property until the debt is fully paid, while the debtor only retains possession of the asset. This distinction results in a faster enforcement pro - cess in fiduciary alienation compared to mort - gages (see 3.5 Legal Requirements Before an Entity Can Give Valid Security ). Although less common, other forms of securi - ties are also created by investors, such as seg - regated estate, corporate guarantee from the parent company and others (see 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance ). 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders There are no restrictions preventing foreign lend - ers from receiving real estate guarantees over urban or rural properties, especially after Statute No 13,986/2020 (the Agro Law), removed previ - ous obstacles. It now allows fiduciary transfers of rural properties in favour of foreign lenders and consolidation of ownership in case of default, with no obligation to resell the asset. There are also no restrictions on remitting amounts abroad resulting from enforced guarantees or debt pay -
ments. However, the transaction must be regis - tered with BACEN. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Creating real estate security does not trigger ITBI, as it does not by itself transfer full owner - ship. The tax is only levied when the security is enforced and the creditor consolidates owner - ship due to the debtor’s default. However, there are registry costs for creating the security, including notarial fees for executing a public deed, registration or annotation fees at the Real Estate Registry Office and the issu - ance of a certificate of encumbrance, which is required for the transaction. These costs depend primarily on the transaction value (calculation base) and state-level fee schedules, which are typically adjusted annually by the state court’s regulations. 3.5 Legal Requirements Before an Entity Can Give Valid Security For transactions involving legal entities to be valid, the formal requirements set out by law and the internal rules in their constitutional documents must be observed. There are no limitations regarding the purpose or merit of the offered security, provided that all formal require - ments are respected. 3.6 Formalities When a Borrower Is in Default After default, extrajudicial enforcement of real estate security, whether through fiduciary sale or mortgage, follows a structured procedure. The debtor is notified to remedy the default within 15 days. If unpaid, ownership is consolidated in the creditor’s name, triggering ITBI payment. This is before consolidation in fiduciary sales and after
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