Foreign investors can own 100% in Brazil, but what’s the catch?

Starting a Business in Brazil in 2025: Your Step-by-Step Guide

Brazil remains one of the most promising (and also complex) markets in Latin America for foreign entrepreneurs in 2025. With a huge consumer base, rich natural resources, and growing digital adoption, opportunities are abundant, but knowing how to register properly and comply with regulations is essential.

Below, I walk you through everything you need to know to choose the right entity, handle key steps, understand the tax burden, and get up and running smoothly in Brazil.

Why Brazil? The opportunity + the challenge

 • Brazil has a large domestic market with strong demand across agriculture, tech, energy, services, and e-commerce.
 • Foreign investment is welcome: in most sectors you can own 100% of your company, though some restricted sectors (e.g. petroleum, defense, etc.) may impose foreign ownership limits.
 • Regulatory, tax and bureaucratic complexity is high, and processes take time, but with good local advice or a service provider, you can often streamline many steps.

Entities: LTDA vs. S.A.

Two legal forms are most common:

ENTITY - FULL NAME - CHARACTERISTICS:

Foreigners can be shareholders in either entity, and in most cases you can have 100% foreign ownership, except in restricted sectors.

Key Steps to Register a Company in Brazil

Here’s how to get from idea to operating business:

1. 
   

   Choose the company name + reserve it
   Go to the relevant State Commercial Registry (Junta Comercial) and check availability of the name. Reserve the name.

   
   


2. 
   

   Draft incorporation documents
    • For an LTDA: prepare the Contrato Social (Articles of Association) with required clauses
    • For an S.A.: more formal documents like bylaws (estatuto social), board structure, etc.
    • Documents usually need to be notarized.

   
   


3. 
   

   Appoint a local legal representative
   If you’re a foreigner owning 100% or otherwise, Brazilian rules typically require a local legal representative (resident or someone with legal credentials in Brazil) to represent the company in administrative, fiscal and sometimes judicial matters.

   
   


4. 
   

   Obtain a tax ID (CNPJ)
   Apply with the Federal Revenue Service (Receita Federal) to get a CNPJ number (Cadastro Nacional da Pessoa Jurídica), which is essential for taxes, invoicing, opening bank accounts, etc.

   
   


5. 
   

   Select your tax regime (important and updated requirement)
   Starting July 27, 2025, you must declare upon registration which tax regime the company will follow:
    • Simples Nacional (simplified regime for small businesses)
    • Lucro Presumido (presumptive profit)
    • Lucro Real (actual profit)

   
   


6. 
   

   Register with state & municipal tax authorities
   Depending on where your business is located and what it does, you’ll need to register for state taxes (ICMS, ISS) and municipal licensing.

   
   


7. 
   

   Open a corporate bank account
   Banks will require CNPJ, identification documents, proof of address, legal representative, etc. Foreign businesses sometimes face more rigorous “know your customer” (KYC) procedures.

   
   


8. 
   

   Register with labor / social security authorities if hiring
   If you hire employees, you must register with INSS (social security), FGTS (severance fund) and comply with labor laws (CLT).

   
   


9. 
   

   Obtain sector-specific licenses or regulatory approvals
   Some sectors require special authorization (e.g. health, environment, imports/exports). Also environmental approvals where relevant.

   
   


10. 
    

    Compliance and ongoing obligations
    Annual filings, bookkeeping, auditing (if required), maintaining licenses, paying taxes and social contributions, etc.

    
    

Timeline & Costs: What to Expect

Costs vary by state and size of business. Some ballpark figures from providers:
 • Legal/documentation, notarization: several thousand BRL depending on entity size / complexity.
 • Junta Comercial fees, name reservation: often in the lower thousands of BRL. 

Tax & Regulation: What you’ll pay

 • Corporate Income Tax (IRPJ) + Social Contribution on Net Profit (CSLL) combined nominal rate is around 34% for most companies (this includes the base corporate rate, surtax if profits exceed a threshold, and the CSLL).
 • There are simplified tax regimes (Simples Nacional, Lucro Presumido) which may reduce compliance cost and effective tax load for smaller businesses.
 • Starting July 2025, when you register, you must declare the tax regime you’ll use.

Common Pitfalls & Tips for Success

• Choose the right tax regime up front.- switching later can be costly or constrained.
 • Local representative matters.- they must be reliable and aware of Brazilian law.
 • Banking delays are frequent for foreign owned companies. Plan buffer time.
 • Licenses & environmental approvals take time; if your business operates in regulated sectors, begin those processes early.
 • Good accounting from day one.- Brazil has many detailed rules (deductions, loss carryforwards, etc.). Mistakes can be costly.

Employer of Record (EOR): Fast-track option

If you need to start operations before a legal entity is fully established, or want to test market, using an Employer of Record (EOR) can be useful. The EOR hires employees on your behalf (legally), handles payroll, social security contributions, and compliance. This lets you begin operations, hire staff, and deliver services while your legal entity rolls through the registration process.

How DBI Helps You

At Doing Business International, we provide full-service support to ensure your Brazil company is registered compliantly and efficiently. We help with:
 • Choosing the right entity (LTDA or S.A.)
 • Drafting and notarizing all required documents
 • Local representative appointment
 • Tax ID (CNPJ) application and selection of the correct tax regime
 • Municipal, state, and federal tax registrations
 • Bank account opening assistance
 • Labor, social security, environment licensing where needed

Final Thoughts

Brazil is big, diverse, and full of opportunity, but you won’t succeed by winging it. Following process, planning for delays, using good local partners, and staying on top of regulatory changes is key. If you do that, you’ll turn complexity into competitive advantage.