Who has done it before knows that it can be a real challenge. Starting up a company in Brazil as a foreigner. A lot of bureaucracy waits for you when starting a company. In this column I’ll go over the types of companies that exist, and how much you can invoice with each of them.
Microempreendedor Individual The easiest for Brazilians who just need a company so they can emit invoices is a microempresa. They can just register a MEI (Micro Emprendedor Induvidual). You will only need your electoral title and personal contact details. Then you will get your CNPJ and you can emit invoices. This will only take you an hour or not even that much. The problem might be that you can only invoice up to R$ 60.000 per year, about R$ 5.000 per month. And there are a couple of other things you have to pay attention to. For example, it’s not aloud to open a MEI in your name if you are involved as a partner in another business or if you already have another company.
Micro empresa and Empresa de Pequeno Porte Who has bigger plans with a company, or is a foreigner, needs another type of company, the “simples” (LTDA) for example. With this system you can invoice up to R$ 360.000 yearly and in the case of Empresa de Pequeno Porte even up to R$ 3.600.000 on a yearly base. A good thing about the last system I mentioned is the tax percentage. This all depends on your turnover. At the beginning you would pay 6%, but when your company starts to run well, your tax percentage will raise as well. A fair system with good tax rates in my opinion. When comparing this to the Netherlands the rates a quite a bit lower here in Brazil. Though, to start this kind of company you need to bring in a lot of documents and be patient.
Talk to an accountant to see what kind of company suits your business or ideas; this can avoid a lot of trouble and surprises afterwards.
When you talk to an accountant about opening your company, mention right from the start in what area you want to start your business. This can be of importance later on when invoicing for your services or product.
Don’t give up!
It is not cheap to startup your own company here, I think I paid around R$ 3.500,00 to R$ 4.000,00 on taxes, fees and the accountant off course.
Once you got that done, what took me about a year, you have to think about a company bank account. That went pretty smooth, I think it took me a about two weeks to get it all done. The only problem I had with some foreign clients was that I couldn’t receive money from abroad until 3 months after opening the bank account. Keep that in mind in your planning. Good luck business(wo)men!