Foreign Directors or Administrators in Brazilian Companies: Legal Aspects and Procedures

Brazilian legislation allows any foreign individual to establish or hold interests in a Brazilian company, regardless of their tax residency or visa status. However, a common concern among foreign investors is how they can manage their business in Brazil without being residents.

Previously, only Brazilian residents could hold management positions. However, with the enactment of Federal Law n. 14.195/2021, this requirement has been relaxed, allowing non-resident individuals to serve as directors or administrators in Brazilian companies. This change reflects Brazil's ongoing efforts to attract foreign investment by facilitating the involvement of global investors in company management.

However, to comply with Brazilian regulations, in IN DREI 112/2022, the Ministry of Economy requires that non-resident managers appoint a Brazilian resident as an attorney-in-fact, who will represent them before local authorities. The legal representative is appointed by a power of attorney document that must be valid during management term and for three years thereafter.

This requirement ensures that companies have a local representative who can address administrative and legal matters in accordance with local regulatory frameworks.

Conclusion: Brazilian legislation is evolving to make it easier for foreign investors to take leadership roles in their companies without the need for residency. However, the appointment of a local attorney remains a crucial legal requirement. It is essential for foreign investors to seek specialized guidance to ensure full legal compliance.

For any questions or legal assistance on this matter, feel free to contact M&F Klein Advogados for legal guidance and advice.

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