The submission of the Electronic Declaratory Registry (RDE) in the Direct Foreign Investment (IED) module is among the first requirements of the year. Check out additional information below.
What is it?
The Electronic Declaratory Registry (RDE) in the Direct Foreign Investment (IED) module is intended for the records of foreign investments made by non-resident, non-domiciled investor or investor with headquarters abroad, through the ownership of shares or quotas representing the share capital of Brazilian Companies. The DEF – Economic and Financial Statement or the new Shareholding Structure must be submitted in the RDE system, for the fulfillment of the annual periodic updating, under the terms of Circular Letter no. 3.689, of December 16, 2013, issued by the Brazilian Central Bank (“Central Bank”).
Who is required to submit it?
The DEF must be submitted by companies with foreign capital that, on the base date of December 31, 2021, have total assets or equity equal to or higher than R$ 250 million.
Shareholding Structure: the new Shareholding Structure, in turn, must be submitted by companies with foreign capital that, on the base-date of December 31, 2021, had total asset and equity of less than R$ 250 million.
Amounts with the following origins must be recorded in the IED module of the RDE:
a) inflow of tangible or intangible asset, in Brazil, for capitalization in the beneficiary company;
b) corporate reorganization, understood as consolidation, merger or spin off of companies in Brazil, in which at least one of them has foreign capital participation documented in the Central Bank;
c) exchange of shares and quotas in Brazil, understood as the exchange of share participations in Brazilian companies, being at least one a beneficiary of direct foreign investment documented in the Central Bank, performed between resident and non-resident investors, or between non-resident investors;
d) granting of shares or quotas in Brazil, understood as the giving (payment agreement) of paid-up shares or quotas of the capital of a Brazilian company, held by the non-resident investor, for paying in of capital subscribed thereby in another beneficiary company in Brazil;
e) reinvestment, understood as the capitalizations of profit, dividends, interests on net equity or profit reserves in the beneficiary company in which they were produced;
f) distribution of profits/dividends, payment of interest on net equity, divestiture, capital refund and net assets resulting from liquidation used for reinvestment in other beneficiary companies in the Country;
g) distribution of profits/dividends, payment of interest on net equity, divestiture, capital refund and net assets resulting from liquidation used for payments in Brazil or directly abroad.
What are the deadlines?
The update of information must be carried out following the directions below:
a) within 30 days, as from the date of the event that changes the equity interest of the foreign investor;
b) yearly, by March 31, 2022, regarding the base date of December 31, 2021.
What are the fines in case of delay or failure to submit?
In case of failure to register or submit the documentation supporting the information provided to the Brazilian Central Bank, the fine is 5% of the amount subject to registration or statement, limited to R$ 250,000.00.
If in doubt, contacts us at firstname.lastname@example.org.
Written by Maikon Luiz, Head of Operations BR at Drummond Advisors
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