Brazilian Legal System: What You Should Know
Companies seeking to do business in Brazil should first become familiar with the Brazilian legal system and legal landscape that governs businesses activities. From civil law concepts to heavy government regulation, a foreigner doing business in Brazil can quite easily get lost. Avoid such confusion by engaging qualified legal counsel to help guide you to success. Below are a few things to keep in mind.
- Codified System. Brazil is a civil law country that is governed by laws and statutes for each area of the law. For example, there is a tax code, a civil code, commercial code, consumer code and criminal code, all drafted and implemented by government legislators. Have a doubt about a particular law? The first step is to look at the respective code.
- Civil and Commercial Law. Civil and commercial law matters are governed by the civil code and commercial code, respectively. Contracts are important for business deals, but it is necessary to ensure that what is written in the contract does not contravene what is in the code. Frequently, even if you contract to certain terms, the law written in the code will supersede the terms of the contract.
- Regulatory Agencies. Depending on the type of activities you or your company will engage in, you may need the authorization of certain governmental regulatory agencies. Some such regulatory agencies include:
- Energy sector (ANEEL)
- Oil and Gas sector (ANP)
- Telecommunications sector (ANATEL)
- Water sector (ANA)
- Pharmaceutical sector (ANVISA)
- Corporate Taxes. Organizations are taxed in Brazil at each level of the government: federal, state and municipal. Primary business taxation includes taxes on earnings (corporate income tax depending upon selected business structure and social contribution on corporate profits), taxes on consumption and transactions (sales and services tax, municipal services tax and excise tax), production taxes, import taxes and financial transactions taxes.
Each of these key legal factors should be examined and considered when developing a business strategy in Brazil. For clarification on any of these key legal matters, it is advisable to speak with a reputable business attorney.