It is increasingly common for Brazilian technology professionals to provide services to North American companies. In some cases, it is not even necessary to leave Brazil to work for an American company. Pedro Drummond, partner at Drummond Advisors, was with Gabriel Rangel, founder of Seven Apps, and Drummond lawyers who are experts in the field in a webinar discussing these and other topics.
Gabriel mentioned the growth of the Brazilian market in the technology field, especially with the startups that are emerging in the country. “Brazil has been very forthcoming, even more so with the large startups that we have in the country today, with this huge movement that has been taking place. In general, the developers have mastered very well all the cutting edge technologies”, he emphasized.
In the tax-related aspect, Maikon Luiz – Head of Operations BR at Drummond Advisors – discussed what taxes companies in Brazil need to pay when hiring an employee in the legal entity (PJ) or individual (PF) regime.
“Regarding the developer’s company point of view, if he is a PJ developer and he is hired by another company here in Brazil to provide this service, he will have all taxation levied upon his CNPJ Reg. No. depending on the tax regime he chooses.” Maikon added that, in this model, the taxes that must be paid are: PIS/COFINS, ISS, IRPJ/CSLL.
As for a hiring under the PF regime, the Head of Operations BR mentioned that “if you are an individual hired directly from a company here in Brazil (PJ), and if such an individual does not have a CNPJ Reg. No., you will have to pay the income tax directly according to the progressive table.”
In some cases, mainly for jobs with shorter duration, the employee can be hired as a freelancer. Maikon mentioned that, in this framework, the RPA does not exist. “If the American legal entity does not have a physical entity, a legal entity in Brazil, the RPA does not exist, you pay according to the income tax table, which is also more expensive.”
Immigration and labor aspects of the legislation of digital nomads in Brazil
After the critical period of the pandemic, many companies adopted a new way for employees to work remotely. In this sense, countries have opened their borders to the new modality of “digital nomads” who intend to live temporarily in these locations.
Based on Brazilian immigration legislation, immigrants who are “digital nomads” must be able to perform their work for foreign employers remotely and using technologies and communications. Brazil is on the list of countries with an immigration legislation with the publication of RN 45/2021 intended for Digital Nomads.
“The term digital nomad will be applied provided such a professional has a relationship with the entity abroad,” said Ana Gabriela Francelli, immigration manager at Drummond Advisors.
You also need to prove your livelihood in the country, Francelli emphasized. “You have to prove your subsistence in Brazil. So, this subsistence will be demonstrated with US$ 1,500 on a monthly basis or US$ 18,000 in a bank fund […] and also the proof of the relationship, service contract with the entity abroad.”
Regarding the period allowed by the legislation, Ana Gabriella pointed out that Brazil created an interesting modality. “You can enter with a visitor visa provided you meet the deadline, as Brazil has a reciprocity agreement with other countries. So, developers can enter Brazil with a visitor visa and become regularized through digital nomads, provided they meet these requirements.”
In the scope of the employment relationship, Daniel Rangel, labor lawyer at Drummond Advisors, emphasized the importance of creating a labor planning.
“The hiring of developers as legal entities is rather common. For this hiring, within the scope of companies, it is very important to make the labor planning. You need to structure your service agreement with this developer very well to avoid the characterization of an employment relationship, to prevent courts from recognizing any kind of employment relationship. The characterization of the relationship is also very important for us to emphasize and avoid on the digital nomad visa in Brazil, as the characterization of an employment relationship disqualifies this person for a digital nomad visa.”
A new aspect in the end of March was Provisional Presidential Decree No. 1,108, which addresses the extraterritorial application of the Brazilian National Labor Regulations (CLT). Rangel also spoke about the subject that concerns Brazilians working abroad.
“The provisional presidential decree was brought in to regulate this possibility of maintaining the employment agreement, as there was great concern about the lack of regulation regarding this situation… discuss whether it would be an expatriation action… the company did not exactly have legal certainty to be able to encourage their professionals to make such a move abroad.”
STEM and US immigration policy
The current US administration announced a series of measures to attract global talent in order to strengthen the economy and increase technological competitiveness in the areas of science, technology, engineering and mathematics, called STEM.
Louanni Ribeiro, a lawyer specializing in immigration at Drummond, emphasized that the proposal is in line with other programs of the administration. “They tried to align some of that also with the Biden administration’s own campaign agenda, where they also talked a lot about green technology, renewable energy, getting the US back into treaties…”
One of the public visas intended for the persons that fit the STEM is the EB-1A. It is for individuals with extraordinary ability in the sciences, arts, education, business or athletics that has been demonstrated by sustained national or international acclaim.
The USCIS (U.S. Citizenship and Immigration Service) has updated the national interest exemption policy, cases that can apply for the EB2-NIE visa. Chris Costa, immigration attorney at Drummond Advisors, commented on this visa category.
“As opposed to the EB-1A, the criterion for the EB2-NIE is that the person is exceptional in their field, not extraordinary. For the NIE, the government would want to see that the person has a related degree, has ten years of experience, a high salary… And unlike the EB-1A, the government specifically changed their internal policy to facilitate people in the STEM area, to help US competitiveness.”
Do you want to know more about the visa categories to live, work or travel to the US? Just download the Go Global Visa Guide E-book, in which you will have access to insider tips and an overview of the purpose of each visa. Download it here: https://drummondadvisors.com/lp/guia-de-vistos-2/
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Written by Marcos Ferreira, Content Assistant at Drummond Advisors