Labor laws. Brazil has implemented meaningful changes to its labor laws that have the potential to benefit employers in structuring and carrying out their business plans in the country. Initially Law No. 13,42/17 secured the right of every company to outsource any of its activities. It modified the Superior Labor Court's previous decisions that prohibited companies from outsourcing their core activities. The outsourcing of core activities was upheld by a paramount decision of the Federal Supreme Court on 30 August 2018.

Another important change came with Law No. 13,46/17, which made substantial alterations to Decree-Law No. 5,452/43, (known as the Consolidation of Labor Laws (CLT)), by, among other measures:

Migration Law. The previous foreign statute was replaced by a more modern Law No. 13,445/17 (known as the Migration Law). However, the practical conditions to obtain temporary working visas for employees were not substantially modified.

Law of Economic Freedom. To encourage investment in and the development of businesses in Brazil, Law No. 13,874/19 (known as the Law of Economic Freedom) was enacted, which influences numerous aspects of the Brazilian legal system. Among other things, it reinforces freedom of negotiation among private parties, by incorporating provisions into the Civil Code (Código Civil) (Law No. 10406/02), stating that:

These changes are expected to limit courts interfering mandatory terms into a contract. However, since Law 13,874/19 only entered into force recently (September 2019), it is still unclear what effect it will have on court rulings.

Another major recent development was the enactment of Brazil's General Data Protection Law (Law No. 13,709/18), which came into force on 15 August 2020. Largely inspired by the General Data Protection Regulation ((EU) 2016/679) (GDPR), the new law provides for rules on the processing, by individuals and private and public entities, of data belonging to identified or identifiable persons. Among other aspects, the Law provides for stricter formal requirements for consent to be valid, and data security policies (see Question 36).

Other interesting recent developments are found in:

Brazil is a federal republic and its legal system is based on civil law. Therefore, Brazil relies primarily on statute, rather than on case law. However, the new Civil Procedure Code, which came into force in March 2016, strengthened the importance of judicial precedent by establishing that certain decisions issued by appeal courts are binding.

The Brazilian Federation is comprised of the federal government, states, federal districts, and municipalities. Each of these entities is competent to legislate on matters defined by the Constitution of the Federal Republic of Brazil (Constitution). As a rule, issues relating to corporate law and foreign investments fall within the federal government's legislative competence.

Brazil is generally receptive to foreign investments. However, investments in certain sectors (including foreign shareholders' acquisition and ownership of shares), which the Constitution classes as strategic, are restricted to nationals or subject to governmental authorization. They include:

Following the enactment of Law 13,097 on 19 January 2015, which altered Law 8,080/90, foreign investment has been admitted in certain healthcare sectors. Law 13,842 of 2019 allows up to 100% foreign investment in airline companies operating under domestic flight concession contracts (foreign shareholdings were previously limited to 20%).

Foreign direct investments must be registered with the Brazilian Central Bank. For investments in the securities market, registration with the Brazilian Securities Commission is also required. In addition, foreign investors must:

As a United Nations member, Brazil applies the Security Council Resolutions, some of which impose economic sanctions preventing or restricting trade with certain countries.

A list of Brazilian Decrees implementing Security Council Resolutions is available at www.bcb.gov.br/fis/supervisao/RELACAO_DECRETOS_CSNU.pdf.

Registration with the Brazilian Central Bank is required for:

Registration must be in Brazilian currency. Foreign currency can be converted into Brazilian currency through any banking institution authorized to operate in the foreign exchange market.

Foreign investors' investments in capital markets (acquisition of shares or other securities) are also subject to registration with the Brazilian Central Bank and the Brazilian Securities Commission.

A declaration to the Census of Foreign Capital in Brazil must be submitted on a yearly basis by:

(Circular no. 3.795/2016, Brazilian Central Bank.)

The declaration must be submitted every five years by:

(Circular no. 3.795/2016, Brazilian Central Bank.)

In certain cases, there may be further regulatory requirements that must be observed, prior to remitting funds abroad. For example, technology transfer or IP licensing contracts must be registered with the National Institute of Industrial Property (INPI) prior to the remittance of royalties.

No registration requirements are necessary under anti-money laundering laws, but companies are subject to the supervision of the anti-money laundering authorities.

Brazil offers a wide variety of federal, regional, and local incentives to national and foreign investors, for example:

The most common forms of business vehicle, and those most commonly used by foreign investors, are the following.

LLCs are subject to less strict rules regarding members' rights and obligations. Therefore, their incorporation documents can be drafted with more flexibility. Disclosure requirements are also more flexible. In 2019, Law 13,874 was enacted which enables LLCs to be incorporated, or a single-member company, or both.

Law No. 6,404/76 governs corporations and provides detailed rules regarding the rights and obligations of shareholders, controlling shareholders, and managers. Therefore, corporations are considered a more complex form of business vehicle. Corporations must have at least two shareholders and are subject to additional formalities and disclosure rules compared to LLCs. Corporations are usually preferred when there is a need for sophisticated corporate structures (for example, with different classes of shares including non-voting or plural voting shares), or alternative fundraising structures.

Investment funds are allowed in Brazil but are not a common form of business vehicle.

LLCs and corporations must file formation documents (articles of association and articles of incorporation, respectively) with the Commercial Registry of the state where the company will establish its headquarters.

All companies must be registered with the national taxpayer's registry (kept by the Brazilian Federal Revenue Office) and, depending on their activities, also with the state and the local taxpayers' registries.

Environmental licenses and additional registrations with other agencies or government bodies may be required, depending on the company's activities, for example:

If a company is exempt from registration with the above agencies, it can generally expect to be incorporated in Brazil within one week.

Corporate acts, for example, minutes of members', directors', officers', ordinary, and extraordinary general meetings must be filed with the Commercial Registry. Corporations must publish these acts in the Official Gazette and in another private newspaper (Article 289, Law No. 6,404/76), which can increase their compliance costs. In 2021, Supplementary Law No. 182/2021, altered Article 294 of Law No. 6,404/76, to authorize companies with annual gross revenue of up to BRL78 million to make these publications exclusively by electronic means, which can be less costly. As of 1 January 2022, corporations with annual gross revenue above BRL78 million can make public corporate acts in privately-owned newspapers, in summarized form, with simultaneous disclosure of the entire acts on the same newspaper’s website. Publications at the Official Gazette will cease to be mandatory. This will also be less costly compared to the previous rule.

Corporations must publish their annual financial statements (Article 133, section 3, of Law No. 6,404/76). This requirement does not apply to LLCs, with some exceptions provided for by law (for example, when these entities are considered large companies with total assets of more than BRL240 million or gross revenues above BRL300 million).

Corporations and LLCs have no minimum capital requirement, unless they are engaged in certain activities, for example, financial institutions and insurance companies. However minimum investment requirements apply when foreign individuals are appointed to management positions. There is no maximum share capital limit for corporations or LLCs.

Shares can be issued for cash, assets, or credit. Whenever a corporation issues shares for non-cash consideration an independent valuation report of the asset must be conducted (Law 6.404/76). This requirement does not apply to LLCs.

Restrictions on rights attaching to shares. Corporations may issue preferred shares with restrictions on voting rights, provided that these shares are granted other advantages over common shares. Other restrictions on rights attaching to shares may be established in a shareholders' agreement. As of 2021, corporations can also issue plural vote ordinary shares, that hold up to ten votes per share for seven years, which can be extended to any period of time if certain requirements are fulfilled.

Although it is generally accepted that quotas of interest in LLCs may have different rights, restrictions on voting rights are still controversial for limited liability companies.

Automatic rights attaching to shares. For corporations, both common and preferred shares are granted the following rights:

LLCs are managed by one or more individuals (officers). Corporations are managed by at least one officer (diretoria) and may also have a board of directors (conselho de administração). A board of directors is only mandatory for publicly-held corporations and authorized capital corporations (that is, corporations whose bylaws authorize the board of directors to issue new shares falling within a pre-determined amount, without the need for additional approval by a shareholders' meeting).

To serve as officers of LLCs and corporations, foreign individuals must hold permanent visas. Nationals or foreign individuals sentenced for certain crimes are precluded from serving as officers while the sentence remains in force.

Directors and officers have fiduciary duties of loyalty and care to the company. They must act in the company's interests. They are not personally liable for obligations regularly undertaken on behalf of the company. However, they are liable for breach of the company's bylaws or any applicable law, and for negligence or wilful misconduct in the performance of their duties. As a rule, directors and officers are precluded from intervening in transactions where they may have a conflict of interest.

In corporations, a shareholder's liability is limited to their amount of subscribed share capital and the value of any assets they have offered as consideration. In LLCs, all members are liable for the share capital that has not yet been fully paid in, irrespective of the amount their subscribed capital. They are also responsible for the value of the assets they have offered as consideration.

In addition, all shareholders are liable for damages arising from the improper exercise of voting rights (conflict of interest). Controlling shareholders are further liable for losses caused by the abuse of their controlling power.

Finally, shareholders may be held liable based on the doctrine of piercing of the corporate veil, when they have defrauded or abused an entity for personal purposes. When tax, consumer, or environmental issues are involved, the corporate veil may be pierced regardless of fraud or abuse.

Parent Companies can be held liable for their subsidiaries' actions or debts when they have defrauded or abused an entity for personal purposes, based on the doctrine of piercing the corporate veil. When tax, consumer, or environmental issues are involved, the corporate veil can be pierced regardless of fraud or abuse.

In Brazil, entities carrying out activities that are potentially or effectively damaging to the environment must be licensed by the competent authority.

The National Environment Policy, established by Federal Law 6,938/81, states that environmental licenses can be granted at federal, state and municipal level. Therefore, each member of the federation, within its territory of jurisdiction, is responsible for environmental policies and enforcement.

The environmental licensing procedure in Brazil includes analysis of documents, projects, and environmental studies submitted by the business (CONAMA (Conselho Nacional de Meio Ambiente) Resolution 237/1997). (CONAMA is a federal environmental agency.) The following three-step authorization process is used when an environmental operating license is granted:

A request for a renewal of an LO must be filed 120 days before its expiration date, so the activities remain licensed until the renewed license is issued (Article 134, Law No. 140/11).

Environmental licenses are issued for the activity or facility. Therefore, an environmental license can be transferred to a third party by a simple request to the relevant public authority confirming the purchase or acquisition of the operation.

The Superior Court of Justice (STJ) has declared that environmental obligations associated with real estate are propter rem, which means that the owner and the occupier are responsible for environmental damages (Precedent STJ 623 (Súmula 623)).

Other studies and plans are mandatory for the regular operation of a company, including:

In addition to the permits above, companies classified as potentially polluting must register for the Environmental Inspection and Control Fee (CTF) before operating, and deliver an Annual Environmental Report of Potentially Polluting Activities (RAPP) (Article 17-C, section 1, Law No. 6,938/81).

Employment relationships in Brazil are primarily regulated by the CLT and the Constitution. The CLT and other specific laws are equally applicable to Brazilian employees and foreign employees working in Brazil. Foreign employees are subject to visa requirements.

The employment relationships of employees hired in Brazil who provide services abroad are generally governed by the law of the country in which the services are provided. However, Brazilian law must be applied in all of the following cases:

In addition to what may have been agreed in a written employment agreement or in collective bargaining agreements, employees are entitled to the following main labor rights:

(Article 7, XIII, XVIII and IX, Constitution, Articles 58, 59, 73, 134, 192, 193, and 392, CLT; Article 1, Law No. 605/49, Article 1, Law No. 4,090/62, Article 1, Law No. 4,749/65, and Article 1, Law No. 7,418/85.)

The employer must also deposit an amount corresponding to 8% of the employee’s monthly compensation in an account at the Caixa Econômica Federal Bank. This account must be exclusively for deposits to the FGTS.

A written employment contract is not usually legally required, except for intermittent contracts and when certain special clauses are negotiated, for example, overtime, an individual "hour bank" and working from home. However, the basic conditions of employment must be registered on the eSocial (a new reporting obligation launched by the Brazilian Tax Authorities to gather employees and independent contractors' labor, social security, and tax information) and it is common practice for employment contracts to be written. A written contract is advisable to formalize the employee's working conditions.

If an employer provides a written contract, it is important to include the following:

The CLT and Constitution are applicable to all employment agreements. See Question 11, Mandatory Rules of Law.

Collective bargaining agreements apply to employment relationships and prevail over contractual arrangements, if their terms are more beneficial to the employee than the contract. However, the law provides for an exception when conditions are individually negotiated by employees with a college degree and who earn a monthly salary amounting to at least an approximate of BRL12,867.1 (that is, two times the maximum benefit granted by Social Security in 2020).

Foreign employees must obtain residency permits and visas to enter and work in Brazil. Different types of visa are applicable depending on the employee's situation.

First, the employer must apply to the Ministry of Justice and Public Security for the employee's residency permit. When the residency permit is issued, the employee must apply to the Brazilian consular authority with proper jurisdiction for a visa.

The fee for processing and evaluating residency permits is BRL168, and the process should take 30 days, extendable for another 30 days, once all information is fully submitted for analysis (Article 49, Law No. 9,784/99).

The procedures and fees for processing and evaluating visas depend on the specific procedures of the Brazilian Consulate with proper jurisdiction over the place of residence of the foreign employee.

These are available (subject to specific requirements depending on the type of work) to foreign employees that are hired for positions that do not involve administrating or representing a company in Brazil. Any company duly established in Brazil is eligible to hire foreign workers, subject to the specific requirements of each residence permit.

The residency permit is valid for up to two years, but it is possible to extend it for another two years, and to convert it into a permanent visa.

An employee's dependants can also work in Brazil with their respective temporary visas, issued with the same validity period as that of the employee. Spouses, common law partners, family members, and dependants must be granted residence permits on the grounds of family reunion (Article 4, III, Law No. 13,445/2017). If any of them decide to work, a specific residence permit would be required.

These are available to foreign employees that will work in Brazil in administrative positions, for example officers with management powers (powers to sign documents on behalf of the company) or directors. The maintenance of the authorization is subject to the employee's lawful exercise of the management role. To obtain this type of authorization the employer must make a foreign investment of:

(Resolution No. 11/2017, National Immigration Council.)

Employees are not entitled to management representation or to be consulted in relation to corporate transactions, unless otherwise provided in collective bargaining agreements. This is unusual.

Fair dismissals can occur at any time, if the requirements of Article 482 of the CLT are met, and it is not necessary to grant prior notice.

Unfair dismissals can occur at any time, if the employee is not legally entitled to employment stability, for example, in the event of pregnancy or a work accident, and the exercise of a management position in labor unions. A 30-day prior notice is required, plus three days per year of service with the company, up to a total of 90 days, and the severance payments described below.

Fair dismissal can occur whenever the employee's conduct (Article 482, CLT) is serious enough to justify their dismissal without severance payments. The most common legal grounds for fair dismissal are the employee's:

(Article 482, CLT.)

Statutory minimum notice. There is no minimum notice period.

Severance payment. This consists of wages, unused earned vacations, and the one-third vacation bonus.

Grounds for unfair dismissal. Unfair dismissal is usually possible on payment of the legal severance and satisfaction of the applicable collective bargaining agreement requirements. Dismissal without cause is illegal when the employee is legally entitled to employment stability due to, for example, pregnancy, a work accident, or their exercise of a management position in a labor union. An employee entitled to stability can only be fairly dismissed.

Employees that have an indefinite term contract are entitled to the following when dismissed without cause:

(Article 7, VIII, XVII, XXI, Constitution, Articles 129, 146, 147, 457, 487, and 488, CLT, Article 1, Law No. 12,506/11, Article 1, Law No. 4.090/62, Article 18, Law No. 8,036/90, and Precedent 171, Superior Labor Court.)

Since November 2017, when Law No. 13,467 entered into force, it has become possible to terminate employment contracts on agreement, in which case the prior notice and the 40% fine calculated on the deposits made to the FGTS are reduced by half. The other severance payments are due in full.

Employment contracts can also be terminated when an employee resigns. The employee must give prior notice to the employer and is entitled to receive the amounts normally owed until their last day including:

Payment of additional compensation is not required in this case.

The same rules apply to all workers, unless there is a specific provision in collective labor agreements applicable to the company and its professional category.

Until Law No. 13,467 entered into force on 11 November 2017, mass layoffs were not legally regulated. To fill this legislative gap, the Superior Labor Court established the general understanding that collective dismissals should be negotiated with the relevant employees' union, due to their large social and economic effects. Law No. 13,467/17 addressed the issue differently, establishing that group or collective layoffs are not subject to the union's previous authorisation. Although the Superior Labor Court has recently decided that Federal Law No. 13,467 supersedes its previous guidelines, this matter is under dispute before the Federal Supreme Court, which will decide whether there should be prior authorization by the relevant unions to implement collective unmotivated dismissals.

Redundancy is not regulated by Brazilian labor law.

If a foreign citizen qualifies as a tax resident, they are subject to Brazilian taxation. Tax residency varies according to the type of visa:

Brazilian citizens are taxed in Brazil when they qualify as Brazilian residents, which occurs in various cases including:

(Article 12, Law No. 9,718/98 and Articles 2, 3, and 4, Normative Instruction SRF 208/02.)

Tax resident employees must pay the following:

Non-tax resident employees must pay income tax. Non-tax residents are normally taxed at the rate of 25% (withholding tax).

Employers must pay the following:

Companies constituted under Brazilian laws are subject to Brazilian taxation on their worldwide income.

Every business domiciled in Brazil is a tax resident. Domicile exists whenever there is an economic or professional unit in Brazil, business administration is in Brazil, and the company's bylaws elect Brazil as its domicile (Article 158, Decree Law No. 9,580/18, Article 5, Normative Instruction RFB 1.700/18, and Article 75, Civil Code).

Branches and subsidiaries established in Brazil are taxed as Brazilian companies (tax treaty exceptions may apply).

The Brazilian tax system is highly complex. Several taxes can apply. The main ones are as listed below.

IRPJ is levied at 15% with a 10% surplus for annual income exceeding BRL240,000 (or for quarterly income exceeding BRL60,000). Most companies are taxed at 25%.

CSLL is levied at 9% of corporate profits. Financial institutions are subject to a 15% rate.

Social contribution on revenues is determined as follows:

This is a value added tax (VAT) levied on the circulation of manufactured goods at a rate that varies from 0 to 300%. Circulation means that the product leaves the company’s facilities, regardless of the legal operation, for example, sale and transfer are circulations. There are legal exceptions, for example, rental, use in services outside of a company’s facilities, and change of a company’s address are not considered circulation. Tax credits on inputs are allowed.

IOF is a federal tax used to regulate financial and capital markets, therefore its rates frequently vary. The currently applicable rates are as follows:

ICMS is a state tax similar to VAT and is levied on the sale of goods and on telecommunication, and inter-state and inter-municipal transportation services. Tax credits on inputs are allowed. ICMS rates vary by product and are normally levied at 17% to 19%. Inter-state rates are levied at 4%, 7%, or 12%.

ISSQN is a municipal tax levied on services at rates ranging from 2% to 5%. Tax credits are not allowed.

Dividends paid to foreign individuals or companies are not subject to income tax. The remittances are subject to a zero IOF-FX rate.

Dividends received from foreign companies are subject to taxes on income in Brazil (income tax for individuals; corporate income tax and social contribution on net profit for companies). IOF-FX at 0.38% is levied on the remittance.

Generally, interest remitted abroad is subject to a 15% withholding tax (income tax). The rate may be reduced by tax treaty provisions (for example, those in the tax treaty with Japan). Interest remitted to low-tax jurisdictions (tax havens) is subject to a 25% withholding tax (income tax). IOF-FX at 0.38% is levied on the remittance.

Royalty payments are subject to income tax at a 15% (25% if remitted to a low-tax jurisdiction). The withholding rate may be reduced by tax treaty specific provisions (for example, those with Spain and Israel).

Royalty payments are also subject to the Contribution for Intervention in the Economic Domain (CIDE-Royalties) at 10% (for the payer) and to IOF-FX at 0.38%.

For deductibility purposes, royalties must be based on contracts registered with the INPI. The law provides for limitations regarding the deductibility of royalty payments (limited to 1% to 5% of the net sales revenue).

Interest is not fully deductible by companies for corporate income tax and social contribution on net profit purposes when it is related to debts that exceed the limits imposed by thin capitalization rules. Debts are analysed on the ratio between either:

The limits are applicable not only to each inter-company loan, but also to all inter-company debt held by a company.

The ratios are as follows:

Profits arising from controlled foreign subsidiaries must be recognized by the Brazilian parent on a yearly basis. The same rule applies to affiliates (in some cases) and to entities deemed equal to controlled companies for that purpose. However, profits arising from affiliates are only taxed on the last day of the year when they are made available to the Brazilian company.

In some cases, the deduction and consolidation of tax losses carried forward by controlled and affiliate foreign companies are allowed.

Transfer pricing rules apply to imports and exports of goods, services, and rights (except for royalties, technical assistance, and similar fees), and to interest paid, due, or earned by Brazilian individuals or legal entities, in transactions involving either:

Brazil adopts both comparative and presumed fixed margins methods. The latter are more widely used in Brazil by comparison with other countries.

Generally taxes are levied on imported goods as follows:

Generally, taxes are levied on imported services as follows:

Most exports are free of taxes. However, the exportation of some products is taxed at rates that vary from 9% to 150%.

The references above are to nominal rates. The actual tax burden may vary according to each tax calculation basis.

Brazil is currently a party to effective tax treaties with Argentina, Austria, Belgium, Canada, Chile, China, Czech Republic, Denmark, Ecuador, Finland, France, Hungary, India, Israel, Italy, Japan, Luxembourg, Mexico, Norway, Peru, Philippines, Portugal, Russia, Slovak Republic, South Africa, South Korea, Spain, Sweden, the Netherlands, Trinidad and Tobago, Turkey, Ukraine, and Venezuela.

The treaties have very similar structures to the Organization for Economic Co-operation and Development (OECD) standards, although Brazil is not an OECD member state.

Restrictive agreements and practices, and unilateral conducts are regulated by Law No. 12,529/11, which provides a non-exhaustive list of practices that can be illegal if they harm or potentially may harm competition in Brazil.

Law No. 12,529/11 also applies to anti-competitive conducts involving foreign companies if their acts have, or may have, effects in Brazil.

The Administrative Council for Economic Defense (CADE) is the competition authority in Brazil.

Any conduct that has or may have the following effects (regardless of whether they are accomplished or not) is illegal, regardless of its form or the agent´s intent:

(Law No. 12,529/11.)

Perpetrators are subject to administrative fines (Law No. 12,529/11).

Anti-competitive agreements, for example cartels, can also be subject to criminal prosecution and penalties of two to five years' imprisonment and fines (Law No. 8,137/90). Intent is a necessary element for criminal unlawful conduct.

Law No. 12,529/11 adopted a pre-merger control system, where certain types of transactions must be filed for approval prior to implementation, provided that the turnover threshold is met.

The following types of transactions are subject to CADE's review:

The turnover thresholds are based on the parties’ annual revenues in Brazil. For notification purposes both of the following apply:

CADE's Resolution 2 of 29 May 2012 also establishes de minimis rules for the submission of minority shareholding.

Foreign-to-foreign acquisitions are subject to merger control whenever the above thresholds are met, and the transactions have, or may have, an effect in Brazil.

Failure to submit the transaction to CADE’s review prior to closing (gun jumping) is a violation. As a result, the transaction may be regarded as null and void and the parties involved may be subject to penalties ranging from BRL60,000 to BRL60 million.

If CADE concludes that a merger is potentially anti-competitive, it can either reject the operation as a whole or approve it with restrictions. These restrictions can be of a behavioral or structural nature or both.

The Competition Law expressly provides for the following remedies (other remedies can be imposed):

Merger control rules provided in Law No. 12,529/11 apply indistinctively to all industries. However, mergers may also be subject to the approval of other sectoral regulatory bodies, for example, the National Telecommunications Agency (ANATEL), the Central Bank of Brazil (BACEN), and the Brazilian Electricity Regulatory Agency (ANEEL).

Brazilian law has several provisions aimed at curbing and punishing the payment of bribes and corrupt practices. There are criminal laws, civil laws, and administrative regulations with these objectives. They apply cumulatively.

It is a criminal offense to promise, request, receive, or offer any gift or undue advantage in relation to a public office (Articles 317 and 333, Decree-Law No. 2,848/40 (Brazilian Criminal Code)). The commission of any of these crimes carries a penalty of 2 to 12 years imprisonment.

There are two main civil statutes concerning anti-bribery and corruption:

There are different regulations regarding gifts to public officials at federal, state, and municipal levels. However, they are valid only if they comply with the legal guidelines aforementioned. The Code of Conduct of the Federal Administration provides that no public federal officer can receive a gift, unless either:

A public federal official can also receive a gift if the following conditions are cumulatively met:

The main IP rights in Brazil are copyright, patents, trade marks, industrial designs and geographic indications.

Definition and legal requirements. Inventions are patentable if they are:

(Law No. 9,279/96 (also known as the Industrial Property Law).)

In addition, objects that are fit for practical use can be patented as a utility model if they:

(Law No. 9,279/96.)

Registration. Patent applications must be filed with the INPI (Brazilian Registry Office). Patent applications are subject to a substantial examination. The INPI examines whether the application:

The INPI provides guidance for patent applicants.

Brazil is a party to the Patent Co-operation Treaty (PCT), which means that Brazilian patents can be obtained either when:

Enforcement and remedies. Patent rights are enforceable by the right-holder. Administrative oppositions to patent applications or invalidation pleas can be submitted to the INPI. Infringement proceedings are brought in state courts and annulment proceedings in federal courts. The right-holder can seek:

Criminal sanctions, for example, imprisonment and fines, can also apply.

Length of protection. Invention patents are valid for 20 years and utility model patents are valid for 15 years from the filing date. There has been an important legislative change regarding the term of patents. There was a provision in Law No. 9,279/96 that established that the term of patents could not be less than ten years for invention patents and seven years for utility model patents. This provision has been revoked by the Brazilian Supreme Court in 2021. Therefore, patents granted after 13 May 2021 are not be subject to the minimum term rule. The general rule is that patents granted before this date will not have their term modified. The exception to this rule concerns patents for pharmaceutical products and processes and for health care equipment and materials. For these patents, the Supreme Court's decision will be retroactive. This means that some of these patents will be extinguished if they were in force due to the revoked provision.

Definition and legal requirements. Any distinctive and visually perceptible sign is eligible for registration as a trade mark, unless otherwise provided (Law No. 9,279/96). Smell, sound, and taste cannot be protected as trade marks. A trade mark is not eligible for registration if it resembles another trade mark, applicable to the same goods or services, and, therefore may cause confusion or association among consumers. The law further prevents registration of signs considered descriptive or generic (with respect to the covered goods or services), deceitful, unlawful, or contrary to public order and morality.

Protection. Trade mark applications are filed with the INPI. Trade mark applications are subject to a substantial examination. The INPI examines whether the application:

Protection for unregistered trade marks may be available under unfair competition rules and under the Paris Convention provisions regarding well-known trade marks.

The INPI provides guidance on filing trademark applications.

Enforcement and remedies. Trade mark rights are enforceable by the right-holder (the registered trade mark owner or the unregistered trade mark user).

Administrative oppositions to trade mark applications or invalidation pleas can be submitted to INPI. Infringement proceedings are brought in state courts and annulment proceedings in federal courts. The right-holder can seek:

Length of protection and renewability. A trade mark is protected for a ten-year period from the date of registration. On application, protection may be extended for equal and successive ten-year periods, without limitation.

Madrid Protocol. The Madrid Protocol entered into force in Brazil in October 2019. As a result, Brazil is one of 122 jurisdictions in which members benefit from greater convenience and lower costs when protecting their trade marks internationally. In practice, Brazil’s national applicants are able to file an international trade mark application (effective in other countries) before INPI based on an existing trade mark application in Brazil. Applicants located in other Madrid Protocol member countries enjoy the same benefits when designating Brazil for protection of their trade marks.

Definition. An industrial design is an ornamental form of an object or an ornamental arrangement of lines and colours that can be applied to a product (Law No. 9,279/96). To be eligible for protection, the industrial design must provide the object with a distinctive visual configuration, which must be new, original and capable of being industrially manufactured.

Registration. Industrial design applications are filed with INPI. There is no substantial examination of the applications. They are only examined for compliance with formal requirements. Substantial examination may be carried out on request.

The INPI provides guidance on industrial design applications.

Enforcement and remedies. Industrial design rights are enforceable by the right-holder. Annulment proceedings can be submitted to INPI. Infringement proceedings are brought in state courts and annulment proceedings in federal courts. The right-holder can seek:

Criminal sanctions, for example, imprisonment and fines can also apply.

Length of protection and renewability. Protection of registered designs must remain in force for a ten-year period from the filing date and it may be extended for three successive five-year periods.

Definition and legal requirements. Brazil does not provide specific protection of unregistered designs. Protection may be available under unfair competition rules, depending on the circumstances of the case. Unregistered designs may be entitled to copyright protection if the design is considered a work of authorship unattached to a product and if it complies with the requirements of Law No. 9,610/98 (Copyright Law).

Enforcement and remedies. The right-holder can enforce their rights under unfair competition rules (Law No. 9,279/96). Cases are argued before state courts, unless one of the parties is a federal entity (in which case proceedings are brought in federal courts). The right-holder may seek:

Criminal sanctions, for example, imprisonment and fines can also apply.

Length of protection. As there are no specific provisions regarding unregistered designs, there is no specific term of protection. If eligible for copyright protection, protection Copyright protection lasts from the date of creation to 70 years from 1 January of the year following the creator's death.

Definition and legal requirements. Original works of authorship that are expressed through any means or fixed in any tangible or intangible form are protected by copyright (Law No. 9,610/98). These works include literary, artistic, and scientific works, and databases and software (Law No. 9,609/98). Copyright laws in Brazil grant the right-holder both property and moral rights. The latter includes, among others, the rights of attribution, integrity, and disclosure.

Protection. Copyright protection does not require registration. To provide evidence of authorship and of the date of creation of the work, the right-holder can register the work in different institutions, depending on its nature.

Enforcement and remedies. The right-holder can bring infringement proceedings in state courts, unless one of the parties is a federal entity (in which case proceedings are brought in federal courts). The right-holder can seek:

Criminal sanctions, for example, imprisonment and fines can also apply.

Length of protection and renewability. Copyright protection lasts from the date of creation to 70 years from 1 January of the year following the creator's death. For anonymous or pseudonymous works, and audio-visual works and photography, the term of protection is 70 years from 1 January of the year following the first publication or disclosure. Software is protected for 50 years as from 1 January of the year of publication or, if unpublished, of the year of creation. Copyright protection is non-renewable.

Intellectual property rights can also be granted for:

Confidential information, business secrets, and know-how are protected under unfair competition and other general rules.

Agency agreements are regulated by Law No. 4,886/65 and Law No. 10,406/02 (Civil Code). Unless otherwise provided in the agreement, the relationship between the principal and the agent is considered exclusive. Unilateral termination without cause is limited to the cases provided for in the applicable laws. Otherwise the agent is entitled to compensation, the calculation of which depends on whether the agreement has a fixed term.

There are no nationality restrictions for local representatives. There are no notarization and registration formalities. Unless otherwise agreed, a principal cannot have, at the same time, more than one agent in the same area, with identical assignments and an agent cannot take on the responsibility of carrying out business of the same type on behalf of other principals.

Even though the Civil Code refers to distribution and agency contracts, the prevailing understanding is that traditional distributor contracts (where a distributor purchases goods to resell) are not specifically regulated. Agreements specifically covering the distribution of motor vehicles are an exception and regulated by Law No. 6,729/79 (known as the Ferrari Law).

The Civil Code provisions concerning contracts in general are applicable to distributor contracts, including a provision that unilateral termination is only possible after a reasonable period, sufficient for a party to recover relevant investments, has accrued (Article 473, Civil Code).

Since 26 March 2020 franchising agreements have been regulated by Law No. 13,966/19, which replaced Law No. 8,955/94. The main changes in the new legislation are:

Before signing a franchising agreement, the franchisor must provide to the franchisee a detailed description of the franchise through a written COF. The document must be in clear and accessible language, in Portuguese (for local franchise agreements) or in a foreign language accompanied by a sworn translation in Portuguese (for international franchise agreements).

It must include, among other things, the following information:

The agreement can be void if the COF is

In international franchises, parties are free to choose the jurisdiction of either the franchisor’s or the franchisee’s domicile to settle disputes. The parties must constitute and maintain a legal representative or attorney duly qualified and domiciled in the country of the chosen jurisdiction, with powers to represent them administratively and judicially, including to receive summons.

If the franchisor is a foreign entity, the agreement must be registered with the INPI, to enable the remittance of royalties and payment of other fees.

Decree 7,962/13 regulates e-commerce transactions when they are subject to consumer protection laws. It specifies the information that the seller must provide to consumers, among other obligations. The decree also reinforces a seven-day period applicable to cases of distance selling, during which the consumer can exercise a "right of regret" in accordance with the Consumer Protection Code (Law No. 8,078/90).

General rules regarding contracts and consumer protection are also applicable to any e-commerce transactions.

Specific state consumer legislation can also be relevant for e-commerce activities. For example, those offering products through distance selling in the state of Rio de Janeiro must inform consumers of the date and time of delivery (State Law No. 3,669/2001). Similarly, in the state of São Paulo, sellers must grant consumers, without additional cost, the option to choose the time of the day for product delivery (State Law No. 13,747/2009).

There are currently no specific regulations regarding online platforms with regards to their use for marketing and sales purposes. These businesses are currently subject to general contract and consumer law, IP law (including unfair competition rules), and competition law provisions.

Specifically with regard to price comparison tools and marketplaces, decisions of the Superior Court of Justice have settled that

Advertising is a self-regulated industry in Brazil. The non-governmental organization Conselho Nacional de Autorregulamentação Publicitária (CONAR) is the authority in charge of enforcing the Brazilian Self-Regulation Advertising Code. CONAR assesses complaints presented by its own members, consumers, and authorities. It may recommend the media to suspend publication of a specific advertisement or send warnings to the advertiser and the advertising agency. Its recommendations are usually followed by the media.

In December 2020, CONAR issued a specific guide focused on the marketing by digital influencers. The guide complements the Brazilian Self-Regulation Advertising Code and reinforces relevant aspects. For example, the need to ensure full transparency with regards to posts on social media and other platforms.

Unfair competition and intellectual property rules (Law No. 9,279/96), and consumer protection rules (Law No. 8,078/90), are also applicable to advertising practices. For example, the following are not permitted:

There are also specific rules for advertising certain products, including firearms (Law No. 10,826/03), medicine, tobacco, and alcohol (Law No. 9,294/96), and general rules on child-oriented advertising (for example, Law No. 8,069/90).

Promotional offers must comply with the Brazilian Consumer Protection Code (Law No. 8,078/90), which provides, for example, a prohibition of tie-in sales and obligations that all product offerings are binding to the supplier.

Also, specific regulations, including Law No. 5,768/71 and Decree No. 70,591/72, apply where a promotional offer consists of free distribution of prizes through contests or sweepstakes. They must be authorized by the SCPC (Secretaria de Controle de Promoção Comercial). The promotional offer's rules and information about the organizers must be submitted to the SCPC and the applicable fees paid. Once the promotion is finished, the organizers must provide a full report of the activities to SCPC. The distribution of cash prizes and conversion of prizes into cash is prohibited.

Free distribution of prizes exclusively for cultural, sports, or recreational purposes does not require authorization if it is not subject to elements of luck, not subordinated to any type of payment by competitors, and there is no commitment that participants acquire or use any particular goods or services. If those requirements are met, the distribution of cash is also allowed. In this type of promotion there are restrictions regarding advertising. The organizer’s name can only appear in the promotional materials to identify it as the organizer of the contest in a discrete fashion.

Brazil recently enacted Law No. 13,709/18 (General Data Protection Law (LGDP)), which came into force on 18 September 2020. The LGPD’s enforcement provisions took effect on 1 August 2021. Based on the EU's GDPR, this law intends to prevent abuse in the processing and usage of personal data. Apart from a few exceptions, the Law applies to any operation, whether by individuals or public and private entities, involving information related to an identified or identifiable person.

The LGDP applies to foreign companies to the extent that they:

If any data collected in Brazil is transferred abroad, for example through the sharing of information with parent companies, the sender must ensure that the recipient countries adopt a similar degree of protection (or that the controller will otherwise guarantee this protection, for example through contract clauses or global business standards).

The gathering and use of personal data, in general, depend on the holder's written and informed consent, and must be restricted to the minimum use necessary to accomplish legitimate purposes (LGDP). In addition, companies that handle personal information are required to implement data security measures and may need to adopt privacy and governance policies under the minimum standards contained in the LGDP. Depending on the company's turnover and on its activities, the competent authority, named National Data Protection Authority (ANPD) can require specific operational procedures are established and the company to nominate an internal data protection officer.

Infringing parties are civilly liable and can receive administrative sanctions, including fines of up to BRL50 million, and an order to publicly acknowledge the breach.

The National Data Protection Authority (ANPD) was created by the LGDP. Further regulations detailing how it will implement the LGDP and its requirements are expected in the near future.

Aside from the specific requirements of the LGDP, data protection is covered by constitutional principles and other general rules, including:

There are also specific rules concerning the protection of data held by governmental entities and data that may be relevant for national security purposes, for example, Decree No. 9,637/18.

Product liability is mainly regulated by the Consumer Protection Code. Suppliers involved in a supply chain are strictly and jointly liable for damages suffered by consumers because of defective products and for improper or incomplete information made available to consumers about the product and risks of its use (Articles 12, 13, 17, 18, 19, 23, 24, and 25, Consumer Protection Code).

Products and services must not cause unreasonable risks to the consumers' health or safety, as per Article 8 of Consumer Protection Code. Specific regulations on product safety and quality standards are also issued by federal regulatory agencies, including the:

Consumer protection policies are further covered by general rules on contract and civil liability (tort) provided by the Civil Code. Claims for damages can be brought in state courts by an individual plaintiff or in a class action.

Brazil has several key regulatory authorities, which are relevant to doing business in the country. Below are the most prominent ones:

Main activities. The Administrative Council for Economic Defense (CADE) is the competition authority in Brazil. Certain types of transactions (for example, mergers, acquisitions, joint ventures, and associative agreements) are subject to CADE's pre-merger control, provided that the turnover threshold is met.

Main activities. CONAMA (Conselho Nacional de Meio Ambiente) issues federal environmental licenses.

Main activities. Brazilian Water Agency (ANA) regulates contracts and the operation of services involving water resources throughout the national territory.

Main activities. The Securities and Exchange Commission (CVM) supervises, regulates, disciplines, and develops the securities market.

Main activities. The Central Bank of Brazil ensures the country's economic stability, by maintaining the purchasing power of the currency and regulating the financial system.

Main activities. The Superintendence of Private Insurance (SUSEP) controls and supervises the insurance, open private pension, capitalization, and reinsurance markets.

Main activities. The Brazilian Electricity Agency (ANEEL) supervises and regulates the production, transmission, commercialization, and distribution of electric energy in the national territory. ANEEL also grants, authorizes, or permits electric energy facilities and services.

Main activities. The Brazilian Telecommunications Agency (ANATEL) regulates the telecommunications sector by entering into and managing concession contracts, supervising the provision of services, applying sanctions, controlling tariff reviews, issuing norms on the provision of services, and even carrying out interventions.

Main activities. The Brazilian Petroleum, Natural Gas and Biofuels Agency (ANP) promotes the regulation, contracting, and inspection of the economic activities that are part of the petroleum industry.

Main activities. The Brazilian Health Surveillance Agency (ANVISA) regulates the production and consumption of products subject to sanitary surveillance, for example, medicines, pesticides, and cosmetics. The agency is also responsible for sanitary control at ports, airports, and borders.

Main activities. The Brazilian Supplementary Health Agency (ANS) regulates, controls, and inspects supplementary health care.

Main activities. The Brazilian Land Transportation Agency (ANTT) regulates, supervises, and inspects the activities of service provision and the exploitation of land transport infrastructure, performed by third parties, aiming to:

Main activities. The Brazilian Waterway Transportation Agency (ANTAQ) regulates, supervises, and inspects the activities of waterway transport services and the exploitation of port and waterway infrastructure.

Main activities. The Brazilian Civil Aviation Agency (ANAC) regulates, supervises, and inspects all activities in the civil aviation sector and aeronautical and airport infrastructure in Brazil.

Main activities. The Brazilian Mining Agency (ANM) promotes the planning and promotion of mineral exploration and exploitation of mineral resources and oversees geological, mineral, and mineral technology research. It also controls and inspects the exercise of mining activities throughout the national territory.

Main activities. Brazilian Film Agency (ANCINE) is the federal entity responsible for implementing public policies for the audiovisual sector in Brazil.

There are no other important considerations relating to doing business in Brazil.