A frequent question of foreigners in process of incorporating a new company in Brazil is whether non-resident foreigners may hold administration role in limited liability companies (sociedades limitadas).
Until 2021, the Brazilian Corporate Law (Law No. 6.404/76) allowed non-residents to act as members of the board of directors in corporations (publicly-held companies). From 2021 on, the legislation broadened the possibility for non-residents to act in any management position in such companies, subject to certain conditions.
The doubt that arose was whether the same understanding could be applied to limited liability companies, which ended up being accepted by Brazilian authorities, provided that the following conditions were observed:
(i) The non-resident administrator must appoint a representative (attorney) in Brazil with powers to receive summons in judicial and administrative procedures; and
(ii) The limited liability company’s articles of association must provide for the supplementary regency of the Brazilian Corporate Law.
Another caution to be taken by non-residents aiming to assume management positions in Brazilian companies concerns the field of activity in which the company will operate, since when it comes to financial activities (subject to Brazilian Central Bank regulation), such as fintechs and payment institutions, there may be specific requirements regarding administrators’ residence. For example, in the case of Payment Institutions, the Brazilian Central Bank establishes as a condition for holding management positions that the nominee is a Brazilian resident.
