Besides the possibility of creating a Sociedade Limitada — the Brazilian version of a Limited Liability Company — by just one member (which was not a possibility before), the Economic Freedom Law (Lei da Liberdade Econômica, Law n° 13.874/2019) brought many other changes in filing procedures that made it easier to invest in Brazil.
First, one of the most important changes is the possibility of automated filings and the equal period of analysis for all the Commercial State Boards. For the acts that include conversions, mergers, spin-offs, the incorporation of a Sociedade Anônima — the Brazilian counterpart to Corporation —, corporate groups (as of the Brazilian Company Law or Law nº 6.404/1976) and others, the analysis cannot take longer than 5 business days.
For the remaining acts the deadline is 2 business days, and except for the cases specified herein, when the act requires previous approval by the authorities or when the company uses the standard document as established by the governing body for specific acts, the filing can occur automatically. That means several acts can be filed without the need of analysis by the Commercial Board’s Officer. That is the case of business dissolutions, for example.
In every case that a period is established, the law also states that if the deadline is not observed, the corporate filing will be automatically approved upon request by the interested party.
In addition, it was defined that the company whose main business purpose is a low risk activity will no longer be required a license to operate, which was formerly issued by the City Hall. It is worth mentioning that the list of activities that are considered low risks depends on the city that the company is doing business.
Furthermore, the law included the use of technology resources to ensure the communication between the Federal Union, states and municipalities, such as the automatic incorporation of branches at other states, and the possibility of archiving official documents in digital format.
Those new rules were enacted with the clear goal to facilitate the corporate and reduce the time and cost of operating a business in Brazil. The government facilitated the filings, ensuring more control and transparency through the substantial reduction of bureaucracy when related to companies’ corporate acts.
Marina Breves is a corporate lawyer at Drummond Advisors Belo Horizonte office. She focus on assisting multinational companies in incorporating and transacting business in Brazil.