BRAZIL Law and Practice Contributed by: Alberto Malta, Davi Ory, Ana Vogado and Maria Eduarda Amaral, Malta Advogados
5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets To carry out real estate transactions and acquisi - tions in Brazil, investors may adopt various legal structures. The limited liability company (LTDA) is the most common form due to its operational simplicity, contractual flexibility and limited liabil - ity tied to share capital. The corporation (S.A.) is preferred for structures involving multiple inves - tors or capital market fundraising, with share - holder liability limited to their equity interest. Two corporate vehicles are widely used in the real estate sector: • the special purpose company (SPE), designed for specific projects, allowing assets and risks to be segregated; and • the silent partnership (SCP), which formal - ises partnerships with undisclosed investors, exempting them from commercial registry requirements and offers greater discretion. In the capital markets, real estate investments may be structured through FIIs, FIAGROs, which also allow investment in rural properties and pri - vate equity investment funds (FIPs), often used to acquire stakes in companies that hold real estate assets. These vehicles offer advantages such as tax efficiency, enhanced governance and potential liquidity via secondary market trading. Foreign investors typically operate through local entities or Brazilian subsidiaries, subject to BACEN and RFB regulations. The appropriate legal structure depends on the investor’s profile, tax planning strategy and the required level of governance and transparency.
ronmental compensation and provision of pub - lic facilities, especially in land parcelling. These are formalised through the urban commitment agreement, which may include measures like the solidarity quota for social interest housing (HIS). Key instruments include the transfer or grant of the right to build (TDC), allowing construction beyond zoning limits in exchange for munici - pal compensation and public-private partner - ships (PPPs) for urban, housing and sanitation projects. For large-scale redevelopment, urban consortium operations (OUCs) enable zoning adjustments, with CEPACs issued as tradeable securities granting additional building rights and financing urban infrastructure. 4.7 Enforcement of Restrictions on Development and Designated Use Development and land use restrictions are enforced by municipal governments through planning, construction and environmental departments, using their police power. Inspec - tions may be routine or complaint-driven and sanctions include notices, orders to regularise, embargoes, permit revocations, and, in severe cases, demolition. Infractions may also trig - ger state or federal action, including fines and embargoes by IBAMA or state environmental agencies. The Public Prosecutor’s Office can initiate civil inquiries or public civil actions to halt irregulari - ties, seek compensation or enforce compliance. The City Statute authorises progressive urban building and land tax (IPTU) and, ultimately, expropriation for persistent non-compliance. Criminal liability applies in cases of illegal parcel - ling or environmental crimes. Courts adopt the fait accompli theory only exceptionally, prioritis - ing legality in urban enforcement.
199 CHAMBERS.COM
Powered by FlippingBook