Against this backdrop, foreign companies are increasingly interested in expanding their presence in the region. South America combines a significant consumer market, a strong presence in global commodity chains, and a strategic position in trade relations with partners such as China and the United States. Among the bloc’s countries, Brazil stands out as a strategic hub for those seeking to expand their operations.

Why Brazil?
Brazil is the largest economy in Mercosur and remains the main gateway for foreign companies interested in expanding across South America. In 2025, the country recorded 2.3% GDP growth, reaching R$ 12.7 trillion in current values, according to IBGE data released by the federal government. This result was driven by growth in agriculture, services, and industry, which underscores the diversity and resilience of the Brazilian economy.

Regional integration is also a key factor. Mercosur, comprising Brazil, Argentina, Paraguay, and Uruguay, was created to facilitate trade among its members through tariff reductions and the coordination of trade policies. In practice, companies based in Brazil can use the country as a base to reach other markets in the region.

Benefits for foreign companies
Establishing a presence in Brazil can bring significant strategic advantages for international companies. In addition to accessing one of the world’s largest consumer markets, with over 200 million inhabitants, companies begin operating from within Mercosur’s leading economy, which expands their potential for regional operations.

This position also facilitates integration with established supply chains across various sectors, such as manufacturing, agribusiness, and services, and allows the country to serve as a base for expansion throughout South America.

Furthermore, the country boasts a dynamic business ecosystem, featuring startups, innovation hubs, and local companies that often become strategic partners for new investments.

The country offers scale, economic diversity, and regional integration.

The desire to have your own business can arise from the desire for more autonomy or the perception of a market opportunity, for example. In a country as diverse as Brazil, there is no shortage of promising ideas. But to turn them into reality, the path can be more complex than you might think.

The first obstacle is usually cost. Starting a business in Brazil involves a series of expenses that go beyond the initial idea. Registration fees, issuing certificates and permits are just a few examples. According to a survey by Serasa Experian, the cost of starting a business in 2024 ranged from R$ 500.00 to R$ 3,000.00, not counting indirect expenses.

In addition to costs, bureaucracy is also a point of attention. The opening process can require various registrations and authorizations. It all starts with defining the legal nature (MEI – Individual Microentrepreneur, EI – Sole Proprietor, Simple Partnership, or Limited Liability Company), followed by registering with the Board of Trade, obtaining a CNPJ from the Internal Revenue Service, state and/or municipal registrations, choosing a tax regime (Simples Nacional, Actual Profit, or Presumed Profit) and applying for operating permits. Depending on the sector, it may also be necessary to obtain environmental, health or specific regulatory licenses.

What does Brazilian law say?

Brazilian legislation, under the Civil Code (Law No. 10.406/2002), mandates the appointment of a legal representative/ attorney-in-fact for foreign companies operating in the country. This individual must have broad authority, including handling legal and tax matters, ensuring compliance with the General Data Protection Law (LGPD), and maintaining formal communication with the National Data Protection Authority (ANPD).

A legal representative is essential for obtaining the necessary governmental authorizations, registering with agencies such as the Board of Trade and the Federal Revenue Service, and ensuring compliance with local regulations.

The legal representative can be either Brazilian or a foreign resident in Brazil. For “S.A.” companies, the representative must also be a board member and hold a power of attorney for at least three years after their term ends to ensure continued legal compliance.

Beyond legal and regulatory responsibilities, the representative plays a crucial role in tax compliance and in managing interactions with public and tax authorities. In X’s case, the absence of a legal representative led to severe operational limitations. This underscores the importance of appointing a qualified legal representative to ensure regulatory compliance and safeguard the company’s operations and interests in Brazil.

For foreign companies looking to establish themselves in new markets, such as Brazil, corporate governance becomes a competitive differentiator. Adopting good governance practices is essential for building a solid foundation of trust and credibility, which are fundamental factors for long-term business success.

Brazil has a complex regulatory environment and a diverse market, requiring foreign companies to adapt quickly and effectively. Good governance practices can facilitate this process, promoting a better understanding of the local scenario and more efficient integration.

Among the most important points of corporate governance are:

1) Transparency

Corporate governance promotes transparency and accountability, important elements for attracting investors and strengthening the company’s image in the eyes of the market and society. Companies with well-structured governance tend to have better financial and operational performance.

2) Protection of shareholders’ interests

Good corporate governance ensures that the interests of all shareholders are preserved. It ensures transparency, accountability and fairness in decision-making, preventing the abuse of power by company executives.

3) Risk management

Effective corporate governance includes the identification, assessment and mitigation of risks, ensuring that the company is prepared to face uncertainties and minimize negative impacts.

By fulfilling their legal obligations, board members strengthen the company’s legal position, as well as contributing to building a solid foundation that promotes the long-term sustainability of the business.

Let’s find out more about the legal duties that every board member must fulfill.

1) Duty of care

The duty of care is inherent in the role of every board member and represents a fundamental obligation that permeates all their actions. This principle imposes the need for diligence in the exercise of responsibilities, requiring board members to act in an informed manner.

Applying the duty of care not only safeguards the interests of the organization, but also strengthens stakeholder confidence, promoting sound corporate governance.

2) Duty of loyalty

The duty of loyalty is an essential pillar in the role played by board members. This principle requires board members to act ethically, avoiding any conflict of interest that could compromise integrity or harm the organization. Board members must prioritize the interests of the company over any personal interests, ensuring that their decisions are guided by the pursuit of collective benefit.

This commitment to loyalty reflects the moral and ethical responsibility inherent in the exercise of board duties.

3) Duty of commitment

By taking on the duty of commitment, directors are committed not only to the company itself, but also to its stakeholders, shareholders and employees. This implies a constant willingness to stay informed, up-to-date and ready to face the dynamic challenges of the business environment.

The legal representative acts on behalf of the foreign company, assuming responsibilities and acting in direct line with the company’s strategic decisions. This involves signing contracts, carrying out financial transactions and fulfilling tax obligations on behalf of the company. In addition, they play a key role in communicating with local authorities, clients and business partners, ensuring a solid and reliable presence in the Brazilian market.

Here at Pryor Global, this legal representative is also called attorney-in-fact. Their work is essential to ensure the successful operation of the foreign company in Brazil, protecting its interests and guaranteeing legal compliance in all aspects.

Choosing a qualified attorney is essential, as they will represent the foreign company’s interests before the authorities and third parties. It is therefore essential to carry out careful research and ensure that the attorney selected has solid experience and comprehensive knowledge of Brazilian laws and business practices.

For foreign investors, however, it is essential to be familiar with some aspects of Brazil, especially those related to legislative complexity, which require an in-depth understanding. In addition, it is necessary to consider the country’s economic, cultural, and social dynamics, which significantly influence investment strategies.

In this context, how does foreign capital enter the country?

According to the Foreign Capital Law, foreign capital includes goods, machinery, equipment, and financial resources intended for the production of goods or services in Brazil, without any initial outlay of foreign currency. These resources belong to individuals or legal entities resident, domiciled, or headquartered abroad.

Foreign capital must be registered through the RDE – IED (Central Bank’s Electronic Declaratory Registry – Foreign Direct Investment) module, which is part of the Central Bank’s Information System – Sisbacen. It is essential to register all foreign investment with the Central Bank of Brazil (BCB). This registration is indispensable for procedures such as remitting profits abroad, repatriating capital, and formalizing the reinvestment of profits.

1. Legal representative

The appointment of a legal representative for the foreign investor is a requirement. This professional will play a key role in the process of establishing and operating the company in the country. They will be responsible for representing the foreign investor’s interests before the Brazilian authorities and ensuring compliance with all the legal and tax obligations necessary for the company to operate.

Therefore, appointing an attorney is a crucial step and must be made with care and consideration.

2. Legal nature

Choosing the legal nature of the company is an important step in the process of opening a business in Brazil. It consists of defining the company’s legal structure and the partners’ responsibilities under Brazilian law. To make this decision, you need to consider the objectives of the business, the type of activity to be carried out, the number of partners involved etc.

It is important to understand that the legal nature selected will have a direct impact on issues such as taxation, corporate structure, and legal obligations.

3. Tax regime

The most common tax regime options in Brazil include National Simples, Actual Profit, and Presumed Profit. Each has its own rules and tax rates, as well as specific requirements. The choice of tax regime should be based on the nature of the company’s activity, its estimated revenue, corporate structure, and other relevant factors.

The legal representation of a foreign member of the Board of Directors in a Brazilian Limited Liability Corporation is an essential process. The foreign board member, who is an individual of foreign nationality, becomes part of the company as a board member. However, due to their foreign nationality, they require a legal representative to sign board meeting minutes on their behalf.

This legal representation is established through a power of attorney issued by the foreign member, granting the legal representative the authority to sign board meeting minutes and receive legal notices on their behalf. This is a common practice in this context.

The Brazilian company holds regular meetings, at which the legal representative of the foreign member signs the minutes on behalf of the latter, always with the board member’s own approval. The workflow usually involves the client’s lawyer in Brazil informing the legal representative of a pending resolution, which must be signed on behalf of the foreign member. After the deliberation, the legal representative signs the minutes, and the document is submitted to the corresponding public body to formalize the decision taken.

It is important to note that, according to the Corporations Law, powers of attorney for board members are valid for up to three years after the end of that board member’s term of office, providing continuity of proper legal representation.

The main purpose of taking out reinsurance is to share the risks, so as to limit the financial impact on a direct insurer, especially in cases of serious claims.

The reinsurer has specialized knowledge and experience in various markets, which allows it to offer technical assistance to insurance companies, helping them to better understand complex risks and reducing their risk exposure.

Thus, reinsurance plays a key role in the insurance market, making it more stable and efficient to protect policyholders against possible adversities.

How does reinsurance work?

Reinsurance occurs when a direct insurer takes on a risk proposed by the client. However, in order not to be fully exposed to this risk, the insurer signs a contract with a specialized company, called a reinsurer.

In this contract, the reinsurer undertakes to reimburse the direct insurer in the event of a claim, assuming part of the risks covered. In return, the insurer reimburses part of the insurance premium paid by the insured.

This contract may cover a portfolio of risks located in the same market. It is important to note that the reinsurer works only with insurers, so reinsurance can be considered secondary insurance, while primary insurance is represented by the insurer that directly assumes the risk.

In this way, reinsurance allows insurers to better manage their risks, making the insurance market safer and more stable.