Tax | Relevant Tax Aspects for Foreigners Investing in Brazilian Real Estate Investment Funds

There are basically 2 taxation regimes for foreigners that invest in Brazilian real estate investment funds (“FIIs”) and some exceptions to take into account.

There are special rules that can be very interesting for tax saving, but the whole legal framework needs to be considered. Let’s check some aspects:

1. General regime for foreign investors: a withholding (WHT) tax income of 20% will be levied over the income distributed by the FII and over capital gain when selling equity, for individuals and for companies. This equals the general rule for Brazilian investors too.

The income will be tax exempt for foreign investors (just individuals, not companies), including who is a tax haven, if certain conditions are met: (i) the investor does not own more than 10% of the FII’s quotas or more than 10% of the distributed income; (ii) there are more than 50 investors in the FII; (iii) FII is exclusively negotiated through the stock exchange or the over-the-counter market. On the other hand, it is subject to a withholding tax income of 20% for companies. 

2. Special regime for foreign investors: the WHT will be 15% if the two following criteria are met (i) do not be a resident or domiciled in jurisdictions regarded as tax haven to Brazilian tax authorities (for instance Ireland, Cayman Islands, Panama)  – individuals and companies; (ii) invest in Brazil through the mechanisms regulated by CMN Resolution nº 4.373/14 (National Monetary Council of the Central Bank of Brazil), such as Depositary Receipts. 

Capital gains (sale consideration reduced by cost of acquisition) will be tax exempt for foreign investors in the special regime above when the quotas are negotiated through the stock exchange. 

It is essential to understand the characteristics of the FII and to evaluate if it is interesting or not from a tax standpoint, considering each investor’s needs.


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