Foreign capital entering Brazil requires registrations that varies depending on its purposes. The Central Bank of Brazil is the authority in charge of foreign capital registration through the Electronic Declaratory Registry (Registro Declaratório Eletrônico, or RDE).
RDE is a functionality of the Central Bank’s electronic system (SISBACEN) and includes some registration subsystems designed for different types of foreign capitals, as follows:
- RDE-IED – Direct Foreign Investment: capital and reinvestments registration;
- RDE-ROF – Financial Operations Registry: loans and other cross-border financial transactions; and
- RDE-Portfolio – Portfolio Foreign Investments: foreign capitals destined to Brazilian financial and capital markets.
Any nonresident individual or company who wishes to make direct investments in local companies or financial transactions, must register with the CDNR, the Declaratory Non-Resident Register.
CDNR registration is interconnected with other Central Bank subsystems like RDE-IED and RDE-ROF, and it is a condition for foreign companies to obtain a tax ID number (CNPJ).
The chart below shows the transactions that require the foreign company to register with CDNR and obtain a CNPJ.
|Type of transaction||RDE type||CDNR required?||CNPJ required?|
|Foreign direct investment||IED||Yes||Yes|
|Technology services (ex. trademarks, patents, franchise contracts)||ROF||Yes||No|
|Advance receipt of exports||ROF||Yes||No|
|Operational leases, rentals, and freights||ROF||Yes||Yes|
|Financing from international organizations||ROF||Yes||Yes|
David Roberto R. Soares da Silva, expert in tax, estate and succession planning, founding partner of do Battella, Lasmar & Silva Advogados, and coauthor of Planejamento Patrimonial: Família, Sucessão e Impostos, and Tributação da Economia Digital no Brasil, published by Editora B18.