On November 24, 2016, the Central Bank of Brazil issued Resolution No. 4,533 of the National Monetary Council ("CMN"), which modifies Resolution 3,844 of March 23, 2010, with the purpose of simplifying the registration of Foreign Direct Investment.
Changes to Central Bank of Brazil′s Circular No. 3,689 of December 16, 2013 are also expected soon, in line with the changes brought by Resolution CMN No. 4,533 of 2016.
The purpose of the new rules, which will be effective as of January 30, 2016, is to simplify the procedures for registration of Foreign Direct Investment. Such records will no longer be carried out in the Central Bank′s system ("SISBACEN"), and a new registration system will be adopted.
It is important to note that the Laws and Decree that govern the foreign exchange market have not been changed and, therefore, foreign exchange restrictions and obligations remain unchanged. The changes are essentially operational.
Some registrations (such as dividends and interest on equity) will no longer be required and others will be simplified. The number of quotas or shares representing the corporate capital will no longer be reported, and it will be necessary to keep a corporate chart updated with information about the amount of the corporate capital, equity interest of each foreign shareholder and the total amount of Net Equity, among others.
On the other hand, obligation to file the economic-financial statements will resume and become due quarterly, but only for companies that have Net Equity equal to or higher than R$ 250,000,000.
The Brazilian entity recipient of the foreign investment will be the sole responsible for the registrations (i.e.: the foreign investors are no longer responsible) and they may appoint representatives to carry out the registrations on their behalf.
The current registries will be migrated directly by the Central Bank to the new system and no validation/ confirmation by the companies receiving investments will be necessary. However, since it is the companies′ duty to maintain its records updated, it is recommended that, after the migration, companies verify whether the information registered is correct.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
