Brazil Tightens the Clock on Beneficial Ownership Reporting

If your company is doing business in Brazil, take note: the deadline for reporting beneficial owners to the Brazilian tax authority (Receita Federal) has been cut from 90 days to just 30 days under regulation 2119/2022.

According to the new rules, legal entities in Brazil now have only 30 days from the date they receive their taxpayer ID number (CNPJ) to disclose who owns or controls the company. For foreign-owned companies, a one-time 30-day extension may be granted by the Receita Federal.

So who qualifies as a beneficial owner? It’s anyone who ultimately owns, controls, or significantly influences the company, either directly or indirectly. That includes individuals who hold more than 25% of the equity or voting rights, or who otherwise exercise effective control over decisions and management.

For the first time, trusts are explicitly included in the definition of beneficial owner. The new rules require disclosure of settlors, trustees, beneficiaries, and anyone else who exercises effective control.

Failing to report by the deadline can create real problems for a Brazilian company. The Receita Federal can suspend its CNPJ, meaning it can’t issue invoices, operate bank accounts, or generally conduct business until the issue is fixed.

Like other countries, Brazil has long required beneficial ownership reporting as part of broader efforts to promote transparency and combat tax evasion and money laundering. The new rules, however, raise the stakes a bit. If you’re forming a company or already have one, make sure your filings are accurate and submitted on time.