Brazil Now Allows Non-Resident Administrators

In theory, doing business in Brazil just got easier.

Brazil has a requirement that every company have an administrator. In fact, we wrote about this requirement last year because it’s a hurdle that all Americans face when starting a business in Brazil. In the past, the administrator had to be a resident of Brazil.

But that’s not the case anymore. Law 14.195/2021 and IN DREI 112/2022 changed this requirement. While Brazilian companies must still have an administrator, this person no longer has to be a resident.

Although the change benefits foreign owned entities, all is not perfect. A non-resident administrator, like a non-resident shareholder, must appoint a legal representative who resides in Brazil. The legal representative should be appointed by means of a power of attorney that’s valid during the admnistrator’s term and for three years thereafter.

The big question is how this will all work out in practice. Sure, now someone from outside Brazil can manage a Brazilian company. But will it actually work? How will she open a corporate bank account from abroad? Will the bank even accept documents that she signs? What about trade boards and government agencies? Will they accept signatures from a non-resident who doesn’t have a digital certificate?

The government should be applauded for its attempt to lessen the bureaucracy of doing business in Brazil. However, only time will tell if these efforts pay off. At least for now, the status quo may be your best option.