Академический Документы
Профессиональный Документы
Культура Документы
Brazil
Brazil
Brazil
CONTENTS
Introduction .................................................................................................................................. 4
The business environment .......................................................................................................... 6
Starting a business ..................................................................................................................... 16
Dealing with construction permits ........................................................................................... 29
Getting electricity ....................................................................................................................... 42
Registering property .................................................................................................................. 49
Getting credit .............................................................................................................................. 60
Protecting minority investors ................................................................................................... 67
Paying taxes ................................................................................................................................ 76
Trading across borders .............................................................................................................. 82
Enforcing contracts .................................................................................................................... 86
Resolving insolvency .................................................................................................................. 95
Labor market regulation ........................................................................................................... 98
Distance to frontier and ease of doing business ranking .................................................... 106
Resources on the Doing Business website ............................................................................ 109
Brazil
INTRODUCTION
Doing Business sheds light on how easy or difficult it is
for a local entrepreneur to open and run a small to
medium-size business when complying with relevant
regulations. It measures and tracks changes in
regulations affecting 11 areas in the life cycle of a
business: starting a business, dealing with construction
permits, getting electricity, registering property, getting
credit, protecting minority investors, paying taxes,
trading across borders, enforcing contracts, resolving
insolvency and labor market regulation.
In a series of annual reports Doing Business presents
quantitative indicators on business regulations and the
protection of property rights that can be compared
across 189 economies, from Afghanistan to Zimbabwe,
over time. The data set covers 47 economies in SubSaharan Africa, 32 in Latin America and the Caribbean, 25
in East Asia and the Pacific, 26 in Eastern Europe and
Central Asia, 20 in the Middle East and North Africa and
8 in South Asia, as well as 31 OECD high-income
economies. The indicators are used to analyze economic
outcomes and identify what reforms have worked, where
and why.
This economy profile presents the Doing Business
indicators for Brazil. To allow useful comparison, it also
provides data for other selected economies (comparator
economies) for each indicator. The data in this report are
current as of June
Brazil
Brazil
ECONOMY OVERVIEW
Brazil
Brazil
Figure 1.2 How Brazil and comparator economies rank on the ease of doing business
Note: The rankings are benchmarked to June 2014 and based on the average of each economys distance to frontier (DTF) scores
for the 10 topics included in this years aggregate ranking. The distance to frontier score benchmarks economies with respect to
regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economys
distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.
For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities.
Source: Doing Business database.
Brazil
Note: The rankings are benchmarked to June 2014 and based on the average of each economys distance to frontier (DTF) scores
for the 10 topics included in this years aggregate ranking. The distance to frontier score benchmarks economies with respect to
regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economys
distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.
For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities.
Source: Doing Business database.
10
Brazil
Figure 1.5 How far has Brazil come in the areas measured by Doing Business?
Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency
which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100,
with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for
more details on the distance to frontier score.
Source: Doing Business database.
11
Brazil
Brazil DB2014
So Paulo DB2015
Chile DB2015
Colombia DB2015
Mexico DB2015
167
160
--
--
59
128
84
67
63.37
62.42
58.30
71.30
89.83
77.43
86.13
88.85
Procedures (number)
11.6
12.2
12.0
11.0
7.0
11.0
8.0
6.0
Time (days)
83.6
86.6
102.5
54.0
5.5
31.4
11.0
6.3
4.3
4.7
4.2
4.5
0.7
0.9
7.5
18.6
Slovenia (0.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Dealing with
Construction Permits
(rank)
174
171
--
--
62
179
61
108
Dealing with
Construction Permits
(DTF Score)
48.31
48.25
47.14
50.14
76.13
43.75
76.45
68.43
Indicator
Starting a Business
(rank)
China DB2015
Brazil DB2015
12
Brazil DB2014
So Paulo DB2015
Chile DB2015
China DB2015
Colombia DB2015
Mexico DB2015
Brazil
Brazil DB2015
Procedures (number)
18.2
18.2
19.0
17.0
13.0
22.0
10.0
11.3
Time (days)
426.1
426.1
400.0
467.0
152.0
244.3
73.0
87.6
Singapore (26.0)
Cost (% of warehouse
value)
0.4
0.5
0.5
0.3
0.7
7.6
7.4
10.3
Qatar (0.0)*
Getting Electricity
(rank)
19
19
--
--
49
124
92
116
89.20
89.18
88.52
90.26
81.34
66.35
74.20
68.47
Procedures (number)
4.0
4.0
4.0
4.0
6.0
5.5
5.0
6.8
12 Economies (3.0)*
Time (days)
53.3
53.3
58.0
46.0
30.0
143.2
105.0
78.9
31.6
34.4
31.6
31.6
62.1
459.4
504.4
346.1
Japan (0.0)
Registering Property
(rank)
138
137
--
--
45
37
42
110
Georgia (1)
Registering Property
(DTF Score)
56.18
56.13
57.07
54.79
78.96
80.67
79.33
62.45
Georgia (99.88)
Procedures (number)
13.6
13.6
14.0
13.0
6.0
4.0
6.0
6.8
4 Economies (1.0)*
Time (days)
31.7
31.7
25.5
41.5
28.5
19.4
16.0
63.6
3 Economies (1.0)*
Cost (% of property
value)
2.5
2.5
2.6
2.4
1.2
3.6
2.0
5.1
4 Economies (0.0)*
89
86
--
--
71
71
12
45.00
45.00
45.00
45.00
50.00
50.00
95.00
80.00
12
3 Economies (12)*
Indicator
13
Brazil DB2014
So Paulo DB2015
Chile DB2015
China DB2015
Colombia DB2015
Mexico DB2015
Brazil
Brazil DB2015
Depth of credit
information index (0-8)
23 Economies (8)*
52.5
50.4
52.5
52.5
44.7
33.2
0.0
0.0
Portugal (100.0)
63.6
63.4
63.6
63.6
8.8
0.0
87.0
100.0
23 Economies (100.0)*
35
35
--
--
56
132
10
62
62.50
62.50
62.50
62.50
58.33
45.00
71.67
57.50
Extent of conflict of
interest regulation
index (0-10)
5.7
5.7
5.7
5.7
6.7
5.0
8.0
6.0
Singapore (9.3)*
Extent of shareholder
governance index (010)
6.8
6.8
6.8
6.8
5.0
4.0
6.3
5.5
France (7.8)*
Strength of minority
investor protection
index (0-10)
6.3
6.3
6.3
6.3
5.8
4.5
7.2
5.8
177
175
--
--
29
120
146
105
41.31
41.31
41.37
41.21
84.50
67.44
59.71
71.17
9.0
9.0
9.0
9.0
7.0
7.0
11.0
6.0
2,600.0
2,600.0
2,600.0
2,600.0
291.0
261.0
239.0
334.0
Luxembourg (55.0)
123
126
--
--
40
98
93
44
Singapore (1)
66.11
64.36
68.87
61.80
82.05
71.68
72.69
81.26
Singapore (96.47)
Indicator
Protecting Minority
Investors (rank)
Protecting Minority
Investors (DTF Score)
14
Brazil DB2014
So Paulo DB2015
Chile DB2015
China DB2015
Colombia DB2015
Mexico DB2015
Brazil
Brazil DB2015
Documents to export
(number)
Ireland (2)*
13.4
13.4
13.0
14.0
15.0
21.0
14.0
12.0
5 Economies (6.0)*
2,322.8
2,414.3
1,925.0
2,945.0
910.0
823.0
2,355.0
1,499.3
Timor-Leste (410.0)
2,588.2
1,925.0
2,945.0
910.0
823.0
2,355.0
1,499.3
Indicator
(DTF Score)
Documents to import
(number)
Ireland (2)*
17.0
17.0
17.0
17.0
12.0
24.0
13.0
11.2
Singapore (4.0)
2,414.3
1,925.0
2,945.0
860.0
800.0
2,470.0
1,887.6
Singapore (440.0)
2,588.2
1,925.0
2,945.0
860.0
800.0
2,470.0
1,887.6
Enforcing Contracts
(rank)
118
118
--
--
64
35
168
57
Singapore (1)
Enforcing Contracts
(DTF Score)
53.60
53.60
53.20
54.24
63.85
68.21
37.66
64.61
Singapore (89.54)
Time (days)
731.0
731.0
731.0
731.0
480.0
452.8
1,288.0
388.9
Singapore (150.0)
Cost (% of claim)
16.5
16.5
16.5
16.5
28.6
16.2
47.9
30.9
Iceland (9.0)
Procedures (number)
43.6
43.6
44.0
43.0
36.0
37.0
33.0
36.8
Singapore (21.0)*
Resolving Insolvency
(rank)
55
60
--
--
73
53
30
27
Finland (1)
Resolving Insolvency
(DTF Score)
54.52
51.13
54.52
54.52
47.38
55.31
70.00
72.59
Finland (93.85)
15
Mexico DB2015
Colombia DB2015
China DB2015
Chile DB2015
So Paulo DB2015
Brazil
Brazil DB2014
Indicator
Brazil DB2015
Time (years)
4.0
4.0
4.0
4.0
3.2
1.7
1.7
1.8
Ireland (0.4)
Cost (% of estate)
12.0
12.0
12.0
12.0
14.5
22.0
6.0
18.0
Norway (1.0)
Outcome (0 as
piecemeal sale and 1 as
going concern)
25.8
19.5
25.8
25.8
30.0
36.0
72.0
68.1
Japan (92.9)
Strength of insolvency
framework index (0-16)
13.0
13.0
13.0
13.0
10.0
11.5
10.0
11.5
5 Economies (15.0)*
Note: DB2014 rankings shown are not last years published rankings but comparable rankings for DB2014 that capture the effects of such
factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in
DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific areafor example, insolvencyit receives a no practice
mark. Similarly, an economy receives a no practice or not possible mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a no practice mark puts the economy at the bottom of the ranking on the
relevant indicator.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economys name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.
16
Brazil
STARTING A BUSINESS
Formal registration of companies has many
immediate benefits for the companies and for
business owners and employees. Legal entities can
outlive their founders. Resources are pooled as
several shareholders join forces to start a company.
Formally registered companies have access to
services and institutions from courts to banks as well
as to new markets. And their employees can benefit
from protections provided by the law. An additional
benefit comes with limited liability companies. These
limit the financial liability of company owners to their
investments, so personal assets of the owners are not
put at risk. Where governments make registration
easy, more entrepreneurs start businesses in the
formal sector, creating more good jobs and
generating more revenue for the government.
For the 11 economies with a population of more than 100 million, data for a second city have been added.
17
Brazil
STARTING A BUSINESS
Where does the economy stand today?
What does it take to start a business in Brazil? According
to data collected by Doing Business, starting a business
there requires 11.6 procedures, takes 83.6 days, costs
4.3% of income per capita and requires paid-in minimum
capital of 0.0% of income per capita (figure 2.1). Most
indicator sets refer to a case scenario in the largest
Brazil
18
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business
website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter.
Source: Doing Business database.
19
Brazil
STARTING A BUSINESS
Globally, Brazil stands at 167 in the ranking of 189
economies on the ease of starting a business (figure 2.2).
The rankings for comparator economies and the regional
Figure 2.2 How Brazil and comparator economies rank on the ease of starting a business
20
Brazil
STARTING A BUSINESS
Economies around the world have taken steps making it
easier to start a businessstreamlining procedures by
setting up a one-stop shop, making procedures simpler
or faster by introducing technology and reducing or
eliminating minimum capital requirements. Many have
undertaken business registration reforms in stagesand
Table 2.1 How has Brazil made starting a business easieror not?
By Doing Business report year from DB2010 to DB2015
DB year
Reform
DB2010
DB2011
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
21
Brazil
STARTING A BUSINESS
What are the details?
Underlying the indicators shown in this chapter for
Brazil is a set of specific proceduresthe
bureaucratic and legal steps that an entrepreneur
must complete to incorporate and register a new
firm. These are identified by Doing Business through
collaboration with relevant local professionals and
the study of laws, regulations and publicly available
information on business entry in that economy.
Following is a detailed summary of those procedures,
along with the associated time and cost. These
procedures are those that apply to a company
matching
the
standard
assumptions
(the
standardized company) used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators measure).
STANDARDIZED COMPANY
Legal form: Sociedade Limitada
Paid in minimum capital requirement: BRL 0
City: So Paulo , Rio de Janeiro
Start-up Capital: 10 times GNI per capita
Table 2.2 Summary of time, cost and procedures for starting a business in Brazil - So Paulo
No.
Procedure
Time to
complete
Cost to complete
no charge
1 day
fees included in
procedure 3
With the systems of the State Treasury Affairs of the State of So Paulo
(SEFAZ-SP) and the Federal Revenue Department now synchronized, the
issuance of the CNPJ (National Corporate Taxpayer Registry), INSS
(National Institute of Social Security) and the NIRE (Register of
Enterprises State enrollment) are performed at the same time. With the
partnership between the Federal Revenue Department and the
Commercial Registry the procedures to obtain the authorization to
enroll before the Treasury Affairs of the State of So Paulo (SEFAZ-SP)
and the CNPJ are made prior to the filing of the Articles of Association
with the Commercial Registry.
7 days
R$75 registration +
R$50 (expediting
fee)
No.
22
Brazil
Procedure
Time to
complete
Cost to complete
1 day
no charge
1 day
no charge
2 days
Apply and obtain digital certification (token) for the use of einvoice
No.
23
Brazil
Procedure
Time to
complete
Cost to complete
90 days
no charge
R$ 425.46 (for
1 day
retailing
business),
Once the company has been registered with the Secretaria Municipal de (simultaneous with
may
vary
in
Finanas, it shall pay an annual fee for the control and compliance with
previous
accordance
with
municipal laws. This payment is due on the tenth day of the second
procedure)
the companys
month following commencement of company operations. The TFE tax is
related to the operations permit (alvar de funcionamento) and it is a
activities
post- incorporation procedure.
1 day,
(simultaneous with
procedure 7)
no charge
No.
24
Brazil
Procedure
Time to
complete
Cost to complete
10
1 day,
(simultaneous with
procedure 7)
no charge
11
no charge
12
no charge
Summary of time, cost and procedures for starting a business in Brazil - Rio de Janeiro
No.
Procedure
Time to
complete
Cost to complete
no charge
No.
25
Brazil
Procedure
Time to
complete
Cost to complete
The payment must be made with Banco Bradesco (since 2012). A receipt
Less than one day
of payment must be obtained for use in Procedure 3.
(online procedure)
fees included in
procedure 3
7 days
R$ 313
7 days
R$ 143
7 days
no charge
With the systems of the State Treasury Affairs of the State of So Paulo
(SEFAZ-SP) and the Federal Revenue Department now synchronized, the
issuance of the CNPJ (National Corporate Taxpayer Registry), INSS
(National Institute of Social Security) and the NIRE (Register of
Enterprises State enrollment) are performed at the same time. With the
partnership between the Federal Revenue Department and the
Commercial Registry the procedures to obtain the authorization to
enroll before the Treasury Affairs of the State of So Paulo (SEFAZ-SP)
and the CNPJ are made prior to the filing of the Articles of Association
with the Commercial Registry.
For registering a company before the Institute of Social Security (INSS),
it is necessary to present to the INSS the company's Articles of
Association registered before the Register of Commerce of State of So
Paulo and the CNPJ Certificate. After the enrollment registration, the
contributor has 24 hours to make any cadastral amendment online.
Registration can be done through: http://www.receita.fazenda.gov.br
Agency: Board of Trade of Rio de Janeiro and Brazilian Federal Revenue
Two days after the payment of the Taxpayers' Registry tax, the registry
before the Municipal Taxpayers' Registry shall be made through an
electronic form named DOCAD (Documento de Cadastro do ICMS),
which must be sent to the State Department of Finance through an
online procedure available on the website of such department
(www.fazenda.rj.gov.br/sefaz).
No.
26
Brazil
Procedure
Time to
complete
Cost to complete
2 days
30 days
no charge
Apply and obtain digital certification (token) for the use of einvoice
After duly registering the new hire in the employee registry book (livro
de registro de empregados), the employer must proceed to register the
employees in the social integration program (Programa de Integrao
Social, PIS/PASEP). The PIS/PASEP registry is intended to identify the
worker in order to establish an unemployment guarantee fund (FGTS)
account, to request unemployment insurance, and to be entered in the
National Registry of Social Information (Cadastro Nacional de
1 day,
Informaes Sociais). The employee must thus be registered into the (simultaneous with
PIS/PASEP to not only set up an FGTS account but also to be eligible for
previous
unemployment insurance, if necessary. To register the employee, the
procedure)
employer must complete a PIS/PASEP registry form (documento de
cadastramento do trabalhador, DCT), to be delivered to the federal
savings bank responsible for the FGTS account. The enrollment is
completed in about 5 to 10 business days from application if all
enrollment requirements are met. The employee is enrolled with the
Social Integration Program (Programa de Integrao Social, PIS) upon
entry, and if the employee has already a PIS/PASEP registry, the
employer must only inform the Federal Savings Bank of the new
employment relationship. The employer will obtain the receipt of the
application to PIS within 15 days.
no charge
No.
27
Brazil
Procedure
Time to
complete
Cost to complete
no charge
1 day,
(simultaneous with
previous
procedure)
no charge
No.
28
Brazil
Procedure
Time to
complete
Cost to complete
11
The procedure details for the registration of the Company with the
Patronal Union and with the Employees Union vary according to the
5 days,
representative Unions. Generally, in order to be registered with the
unions, the Company must present the following documents: company (simultaneous with
previous
registration form, Federal Register of Corporate Taxpayers, articles of
procedure)
association, employee's list etc. These documents can generally be
submitted to the unions through their websites.
Agency: Patronal Union and Employees Union
no charge
29
Brazil
The warehouse:
30
Brazil
Figure 3.1 What it takes to comply with formalities to build a warehouse in Brazil - So Paulo
Brazil
31
What it takes to comply with formalities to build a warehouse in Brazil - Rio de Janeiro
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the
Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the
end of this chapter.
Source: Doing Business database.
32
Brazil
Figure 3.2 How Brazil and comparator economies rank on the ease of dealing with construction permits
33
Brazil
BUILDING A WAREHOUSE
Estimated cost of
construction :
BRL 1,186,000
City :
Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Brazil - So Paulo
No.
Procedure
Time to
complete
Cost to complete
1 day
BRL 38
0.5 days
BRL 168
Request and obtain proof of land ownership from the Real Estate
Registry
The ART is required for each project according to the Federal Law N
6.496 of 7 December 1977. It is possible to obtain it online within a
couple of hours and it costs BRL 167.68. The value of the fee varies
according to the value of the contract or the cost of the work:
- Contracts or works up to BRL 8,000: BRL 63.64
- Contracts or works between BRL 8,000.01 and BRL 15,000: BRL 111.37
- Contracts or works of more than BRL 15,000.00: BRL 167.68
34
Brazil
Procedure
Time to
complete
Cost to complete
0.5 days
no charge
0.5 days
no charge
274 days
BRL 4,200
60 days
BRL 75
* Request and obtain proof of land tax payment from the Treasury
Department of the Municipality
Agency: Municipality
35
Brazil
Procedure
Time to
complete
Cost to complete
30 days
BRL 79
1 day
no charge
1 day
no charge
0.5 days
no charge
1 day
no charge
1 day
no charge
Build Co must present the building project to the Fire department for
approval and obtain a report which includes all the fire security
measures that need to be implemented.
The cost related to obtaining the fire assessment is BRL 78.58.
The formula that should be used for a built area superior to 750 square
meters is:0.003*UFESP*sqm = 0.003*20.14*1300.6 = BRL 78.58
Agency: Fire Department
9
Agency: Labor Public Attorneys' Office
10
11
Agency: Fire Department
12
36
Brazil
Procedure
Time to
complete
Cost to complete
29 days
BRL 105
1 day
no charge
1 day
no charge
28 days
BRL 460
60 days
BRL 25
14
Agency: Municipality
15
Agency: Municipality
16
Agency: Municipality
17
37
Brazil
Procedure
Time to
complete
Cost to complete
30 days
no charge
15 days
BRL 980
18
19
Summary of time, cost and procedures for dealing with construction permits in Brazil - Rio de Janeiro
No.
Procedure
Time to
complete
Cost to complete
7 days
BRL 58
0.5 days
BRL 168
Request and obtain proof of land ownership from the Real Estate
Registry
38
Brazil
Procedure
Time to
complete
Cost to complete
0.5 days
no charge
0.5 days
no charge
365 days
BRL 756
works between BRL 8,000.01 and BRL 15,000); BRL 167,68 (contracts or
works of more than BRL 15,000.00).
Agency: Engineers Syndicate (Crea)
* Request and obtain proof of land tax payment from the Treasury
Department of the Municipality
39
Brazil
Procedure
Time to
complete
Cost to complete
30 days
BRL 53
1 day
no charge
0.5 days
no charge
1 day
no charge
1 day
no charge
Build Co must present the building project to the fire department for
approval and obtain a report which includes all the fire security
measures that need to be implemented.
The applicant needs to send the design, the ART of the engineer,
ownership ownership certificate and copy of ID to the fire department.
It takes 1 to 2 months and it costs 53.11 BRL.
10
40
Brazil
Procedure
Time to
complete
Cost to complete
29 days
BRL 53
1 day
no charge
1 day
no charge
28 days
BRL 1,512
7 days
BRL 639
11
12
13
Agency: Municipality
14
Agency: Municipality
15
41
Brazil
Procedure
Time to
complete
Cost to complete
30 days
no charge
30 days
BRL 531
Agency: Municipality
16
17
42
Brazil
GETTING ELECTRICITY
Access to reliable and affordable electricity is vital for
businesses. To counter weak electricity supply, many
firms in developing economies have to rely on selfsupply, often at a prohibitively high cost. Whether
electricity is reliably available or not, the first step for
a customer is always to gain access by obtaining a
connection.
What do the indicators cover?
Doing Business records all procedures required for a
local business to obtain a permanent electricity
connection and supply for a standardized warehouse,
as well as the time and cost to complete them. These
procedures include applications and contracts with
electricity utilities, clearances from other agencies
and the external and final connection works. The
ranking of economies on the ease of getting
electricity is determined by sorting their distance to
frontier scores for getting electricity. These scores are
the simple average of the distance to frontier scores
for each of the component indicators. To make the
data comparable across economies, several
assumptions are used.
The warehouse:
43
Brazil
GETTING ELECTRICITY
Where does the economy stand today?
What does it take to obtain a new electricity connection
in Brazil? According to data collected by Doing Business,
getting electricity there requires 4.0 procedures, takes
53.3 days and costs 31.6% of income per capita (figure
4.1).
Brazil
44
Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the
getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected
here, see the summary at the end of this chapter.
Source: Doing Business database.
45
Brazil
GETTING ELECTRICITY
Globally, Brazil stands at 19 in the ranking of 189
economies on the ease of getting electricity (figure 4.2).
The rankings for comparator economies and the regional
Figure 4.2 How Brazil and comparator economies rank on the ease of getting electricity
46
Brazil
GETTING ELECTRICITY
What are the details?
The indicators reported here for Brazil are based on a set
of specific proceduresthe steps that an entrepreneur
must complete to get a warehouse connected to
electricity by the local distribution utilityidentified by
Doing Business. Data are collected from the distribution
utility, then completed and verified by electricity
regulatory agencies and independent professionals such
as electrical engineers, electrical contractors and
construction companies. The electricity distribution utility
surveyed is the one serving the area (or areas) in which
warehouses are located. If there is a choice of
distribution utilities, the one serving the largest number
of
customers
is
selected.
Light
Name of utility - So
Paulo :
AES Eletropaulo
City:
Table 4.2 Summary of time, cost and procedures for getting electricity in Brazil - So Paulo
No.
Procedure
Time to
complete
Cost to complete
BRL 0
The costumer receives an invoice within the estimated value of the work
and a contract and a service order. So, he has to sign the contract and
the service order and pay the invoice in order to AES Eletropaulo begins
to make the necessary adjustments in its network.
Agency: AES Electropaulo
1 calendar day
BRL 7,500
No.
47
Brazil
Procedure
Time to
complete
Cost to complete
24 calendar days
BRL 0
3 calendar days
BRL 0
Summary of time, cost and procedures for getting electricity in Brazil - Rio de Janeiro
No.
Procedure
Time to
complete
Cost to complete
Agency: Light
BRL 0
No.
48
Brazil
Procedure
Time to
complete
Cost to complete
3 calendar days
BRL 0
20 calendar days
BRL 7,500
2 calendar days
BRL 0
The electric engineer responsible for the works would be present so not
to delay the process (in case the technician has questions about the
process, for example). This inspection happens within 3 business days
after the request is made and there is no cost.
Agency: Light
49
Brazil
REGISTERING PROPERTY
Ensuring formal property rights is fundamental.
Effective administration of land is part of that. If
formal property transfer is too costly or
complicated, formal titles might go informal again.
And where property is informal or poorly
administered, it has little chance of being accepted
as collateral for loanslimiting access to finance.
What do the indicators cover?
Doing Business records the full sequence of
procedures necessary for a business to purchase
property from another business and transfer the
property title to the buyers name. The transaction is
considered complete when it is opposable to third
parties and when the buyer can use the property,
use it as collateral for a bank loan or resell it. The
ranking of economies on the ease of registering
property is determined by sorting their distance to
frontier scores for registering property. These scores
are the simple average of the distance to frontier
scores for each of the component indicators. To
make the data comparable across economies,
several assumptions about the parties to the
transaction, the property and the procedures are
used.
The parties (buyer and seller):
INDICATORS MEASURE
Procedures to legally transfer title on
immovable property (number)
Preregistration (for example, checking for liens,
notarizing sales agreement, paying property
transfer taxes)
Registration in the economys largest business
2
city
Postregistration (for example, filing title with
the municipality)
Time required to complete each procedure
(calendar days)
Does not include time spent gathering
information
Each procedure starts on a separate day.
Procedures that can be fully completed online
are recorded as day.
Procedure considered completed once final
document is received
No prior contact with officials
Cost required to complete each procedure
(% of property value)
Official costs only, no bribes
No value added or capital gains taxes included
Is registered in the land registry or cadastre, or both, and is free of title disputes.
For the 11 economies with a population of more than 100 million, data for a second city have been added.
50
Brazil
REGISTERING PROPERTY
Where does the economy stand today?
What does it take to complete a property transfer in
Brazil? According to data collected by Doing Business,
registering property there requires 13.6 procedures,
takes 31.7 days and costs 2.5% of the property value
(figure 5.1).
Brazil
51
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business
website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter.
Source: Doing Business database.
52
Brazil
REGISTERING PROPERTY
Globally, Brazil stands at 138 in the ranking of 189
economies on the ease of registering property (figure
5.2). The rankings for comparator economies and the
Figure 5.2 How Brazil and comparator economies rank on the ease of registering property
53
Brazil
REGISTERING PROPERTY
Economies worldwide have been making it easier for
entrepreneurs to register and transfer propertysuch as
by computerizing land registries, introducing time limits
for procedures and setting low fixed fees. Many have cut
Table 5.1 How has Brazil made registering property easieror not?
By Doing Business report year from DB2010 to DB2015
DB year
DB2013
Reform
Brazil made transferring property more difficult by introducing
a new certificate on good standing on labor debts, adding to
the number of due diligence procedures.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business
reports for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
54
Brazil
REGISTERING PROPERTY
What are the details?
The indicators reported here are based on a set of
specific proceduresthe steps that a buyer and seller
must complete to transfer the property to the buyers
nameidentified by Doing Business through
information collected from local property lawyers,
notaries and property registries. These procedures
are those that apply to a transaction matching the
standard assumptions used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators cover).
Property value:
BRL 1,186,000
So Paulo , Rio de
Janeiro
The procedures, along with the associated time and
cost, are summarized below.
City:
Table 5.2 Summary of time, cost and procedures for registering property in Brazil
No.
Procedure
Time to
complete
Cost to complete
7 calendar days
(simultaneous
with procedures
2, 3, 4, 5, 6, 7, 8,
and 9)
BRL 77.18
No.
55
Brazil
Procedure
Time to
complete
Cost to complete
Registries and
Disputes (Certido
dos Cartrios de
Protestos) from
the Distributor of
Disputes Registry
* Obtain a Labor Justice Certificate (Certido da Justia do Trabalho)
from the Regional Labor Court
This document is not required by law. Technically, the buyer and seller
can agree to trust that all these checks are done by the seller without the
Obtain a Labor
need to submit the actual documents to the public notary. Sometimes a
3 days
Justice Certificate
statement is executed by the buyer, who declares that there are no labor
(simultaneous
(Certido da
claims against the company capable of reaching the real estate. In
with
procedures
Justia do
practice, however, for transactions between companies, the seller will
1,
2,
4,
5,
6,
7,
8,
Trabalho)
from the
request these documents. The Labor Justice Certificate may have one or
several sheets. It will depend on the quantity of suits against the
9)
Regional Labor
company under analysis. The cost for a one page certificate is R$ 5.53
Court
and for each additional page R$ 5.53.
Agency: Regional Labor Court (Tribunal regional do trabalho)
no cost
These certificates will establish if there is any pending tax debt affecting (online procedure
the property. The certificate is free if obtained online, or R$ 11.85 if
and simultaneous
obtained in person. The buyer can waive this certificate if he assumes the
with procedures
obligation to pay all pending land tax debt related to the real state.
Agency: Municipality of Rio de Janeiro
1, 2, 3, 4, 6, 7, 8
and 9)
no cost
No.
56
Brazil
Procedure
Time to
complete
Cost to complete
no cost
The Worker's Fund Certificate assures that the company has kept its
pension fund plan up to date with payments. This certificate is obtained
online at the site Caixa Economica
(https://webp.caixa.gov.br/cidadao/Crf/FgeCfSCriteriosPesquisa.asp) free
of charge. It is not required by law, but in practice it is usually requested
by the buyer in transactions between companies.
Agency: Federal bank (Caixa Economica Federal)
no cost
No.
Procedure
* Acquire a Federal Justice Certificate (Certido da Justia Federal)
from the Receita Federal - (Certido de Distribuio de Aes e
Execues Cveis, Fiscais, Criminais e dos Juizados Especiais Federais
Criminais Adjuntos junto ao Poder Judicirio Justia Federal de
Primeiro Grau no Rio de Janeiro
57
Brazil
Time to
complete
Cost to complete
no cost
BRL 90
1 day
2% of the property
value
3 days
BRL 2,184.23
based on the
following fee
schedule:From R$
15,000.01 to R$
30,000.00 R$244.56 From R$
30,000.01 to R$
45,000.00 - R$
10
The buyer has to pay the transfer tax before the parties can sign the
transfer deed. The majority of notaries prefer to receive the tax payment
themselves and then take care of transferring it to the Municipality
because they are responsible for checking that the tax payment is
correct. Notaries also have to file to the tax authorities a declaration of
all the transactions that they were part of, given that they are jointly
liable. The notary provides the payment form to the buyer and the
parties pay at the notary. The notary then is in charge of paying the tax
on behalf of the parties. The payment needs to be done in person at any
of the Santander agencies in Rio de Janeiro.
Agency: Commercial bank
11
The notary will review all the documents obtained in the previous
procedures and proceed to notarize the sale deed.
Agency: Notary's office (tabelio de notas)
No.
58
Brazil
Procedure
Time to
complete
Cost to complete
341.12 "From R$
45,000.01 to R$
60,000.00 - R$
418.36 " From R$
60.000,01 to R$
80.000,00 - R$
741.48 "From R$
80.000,01 to R$
100.000,00 - R$
875,38 " From R$
100.000,01 to R$
200.000,00 - R$
1.184,33 "From R$
200.000,01 to R$
400.000,00 1.270,79 " For
properties valued
at R$ 400,000.01
and higher - R$
114.18 for each
additional R$
100,000.00
Update the land taxation records (IPTU Imposto Predial e
Territorial Urbano) to the new owner's name at City Hall
12
no cost
30 days
No.
59
Brazil
Procedure
some issues that need to be fixed prior to registration.
Agency: Land registry
Time to
complete
Cost to complete
60,000.00 - R$
418.36 " From R$
60.000,01 to R$
80.000,00 - R$
741.48 "From R$
80.000,01 to R$
100.000,00 - R$
875,38 " From R$
100.000,01 to R$
200.000,00 - R$
1.184,33 "From R$
200.000,01 to R$
400.000,00 1.274,45 " For
properties valued
at R$ 400,000.01
and higher - R$
114.18 for each
additional R$
100,000.00
60
Brazil
GETTING CREDIT
Two types of frameworks can facilitate access to
credit and improve its allocation: credit information
systems and borrowers and lenders in collateral and
bankruptcy laws. Credit information systems enable
lenders rights to view a potential borrowers financial
history (positive or negative)valuable information to
consider when assessing risk. And they permit
borrowers to establish a good credit history that will
allow easier access to credit. Sound collateral laws
enable businesses to use their assets, especially
movable property, as security to generate capital
while strong creditors rights have been associated
with higher ratios of private sector credit to GDP.
What do the indicators cover?
Doing Business assesses the sharing of credit
information and the legal rights of borrowers and
lenders with respect to secured transactions through
2 sets of indicators. The depth of credit information
index measures rules and practices affecting the
coverage, scope and accessibility of credit
information available through a credit registry or a
credit bureau. The strength of legal rights index
measures whether certain features that facilitate
lending exist within the applicable collateral and
bankruptcy laws. Doing Business uses two case
scenarios, Case A and Case B, to determine the scope
of the secured transactions system, involving a
secured borrower and a secured lender and
examining legal restrictions on the use of movable
collateral (for more details on each case, see the Data
Notes section of the Doing Business 2015 report).
These scenarios assume that the borrower:
Has up to 50 employees.
For the legal rights index, 2 new points are added in Doing Business 2015 for new data collected to assess the overall legal framework for
secured transactions and the functioning of the collateral registry.
4
For the credit information index, 2 new points are added in Doing Business 2015 for new data collected on accessing borrowers credit
information online and availability of credit scores.
3
61
Brazil
GETTING CREDIT
Where does the economy stand today?
How well do the credit information system and collateral
and bankruptcy laws in Brazil facilitate access to credit?
The economy has a score of 7 on the depth of credit
information index and a score of 2 on the strength of
legal rights index (see the summary of scoring at the end
of this chapter for details). Higher scores indicate more
credit information and stronger legal rights for
borrowers and lenders.
Figure 6.1 How Brazil and comparator economies rank on the ease of getting credit
62
Brazil
GETTING CREDIT
One way to put an economys score on the getting credit
indicators into context is to see where the economy
stands in the distribution of scores across economies.
Figure 6.2 highlights the score on the strength of legal
63
Brazil
GETTING CREDIT
When economies strengthen the legal rights of lenders
and borrowers under collateral and bankruptcy laws, and
increase the scope, coverage and accessibility of credit
Table 6.1 How has Brazil made getting credit easieror not?
By Doing Business report year from DB2010 to DB2015
DB year
Reform
DB2012
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
64
Brazil
GETTING CREDIT
What are the details?
The getting credit indicators reported here for Brazil are
based on detailed information collected in that economy.
The data on credit information sharing are collected
through a survey of a credit registry and/or credit bureau
(if one exists). To construct the depth of credit
information index, a score of 1 is assigned for each of 8
features of the credit registry or credit bureau (see
summary of scoring below).
So Paulo
Rio de Janeiro
Index score: 2
Index score: 2
No
No
Does the law allow businesses to grant a non possessory security right in a
single category of movable assets, without requiring a specific description
of collateral?
No
No
Does the law allow businesses to grant a non possessory security right in
substantially all of its assets, without requiring a specific description of
collateral?
No
No
No
No
No
No
Is a collateral registry in operation for both incorporated and nonincorporated entities, that is unified geographically and by asset type, with
an electronic database indexed by debtor's name?
No
No
No
No
No
No
65
Brazil
So Paulo
Rio de Janeiro
Index score: 2
Index score: 2
Are secured creditors paid first (i.e. before tax claims and employee
claims) when a debtor defaults outside an insolvency procedure?
No
No
Are secured creditors paid first (i.e. before tax claims and employee
claims) when a business is liquidated?
No
No
Yes
Yes
Does the law allow parties to agree on out of court enforcement at the
time a security interest is created? Does the law allow the secured creditor
to sell the collateral through public auction and private tender, as well as,
for the secured creditor to keep the asset in satisfaction of the debt?
Yes
Yes
Credit bureau
Credit registry
Index score: 7
Yes
Yes
No
Yes
Yes
No
No
No
Yes
No
Yes
Yes
Yes
Yes
Are bureau or registry credit scores offered as a valueadded service to help banks and financial institutions
assess the creditworthiness of borrowers?
Yes
No
Note: Prior to Doing Business 2015, the depth of credit information index covered only the first 6 features listed above. An
economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or
66
Brazil
covers less than 5% of the adult population, the total score on the depth of credit information index is 0.
Credit bureau
(% of adults)
Credit registry
(% of adults)
Number of firms
6,226,581
3,928,052
Number of individuals
80,925,949
68,030,022
63.6
52.5
Coverage
Percent of total
Source: Doing Business database.
67
Brazil
68
Brazil
Figure 7.1 How Brazil and comparator economies perform on the strength of minority investor protection index
69
Brazil
requirements?
Extent of disclosure index (0-10)
Brazil
70
Brazil
71
Brazil
72
73
Brazil
Table 7.2 Summary of scoring for the protecting minority investors indicators in Brazil
Answer (So
Paulo )
Score (So
Paulo )
5.0
CEO alone
Full disclosure of
all material facts
Disclosure on the
transaction and
on the conflict of
interest
Disclosure on the
transaction only
8.0
0
2
1
0
8.0
Yes
Liable if unfair
or prejudicial
Liable if
negligent
Yes
Yes
No
Voidable if
unfair or
74
Brazil
prejducial
Ease of shareholder suits index (0-10)
Before filing suit, can shareholders owning 10% of the
companys share capital inspect the transaction documents?
No
(0-1)
Can the plaintiff obtain any documents from the defendant
Any relevant
and witnesses during trial? (0-3)
document
Can the plaintiff request categories of documents from the
No
defendant without identifying specific ones? (0-1)
Can the plaintiff directly question the defendant and
No
witnesses during trial? (0-2)
Is the level of proof required for civil suits lower than that of
No
criminal cases? (0-1)
Can shareholder plaintiffs recover their legal expenses from
Yes if successful
the company? (0-2)
Strength of minority investor protection index (0-10)
Extent of conflict of interest regulation index (0-10)
Extent of shareholder rights index (0-10.5)
Can shareholders amend company bylaws or statutes with a
Yes
simple majority?
Can shareholders owning 10% of the company's share
Yes
capital call for an extraordinary meeting of shareholders?
Can shareholders remove members of the board of directors
Yes
before the end of their term.
Must a company obtain its shareholders approval every time
Yes
it issues new shares?
Are shareholders automatically granted subscription rights
Yes
on new shares?
Must shareholders approve the election and dismissal of the
No
external auditor?
Can shareholders freely trade shares prior to a major
No
corporate action or meeting of shareholders?
Strength of governance structure index (0-10.5)
Is the CEO barred from also serving as chair of the board of
Yes
directors?
Must the board of directors include independent board
No
members?
Must a company have a separate audit committee?
Yes
Must changes to the voting rights of a series or class of
shares be approved only by the holders of the affected
Yes
shares?
Must a potential acquirer make a tender offer to all
Yes for listed
shareholders upon acquiring 50% of a company?
companies
Is cross-shareholding between 2 independent companies
No
limited to 10% of outstanding shares?
Is a subsidiary barred from acquiring shares issued by its
No
parent company?
Extent of corporate transparency index (0-9)
Yes for listed
Must ownership stakes representing 10% be disclosed?
companies
Must information about board members other directorships
Yes for listed
as well as basic information on their primary employment be
companies
4.0
4.0
No
Any relevant
document
No
No
No
Yes if
successful
6.3
5.7
7.5
6.3
5.7
7.5
1.5
Yes
1.5
1.5
Yes
1.5
1.5
Yes
1.5
1.5
Yes
1.5
1.5
Yes
1.5
No
No
5.5
5.5
1.5
Yes
1.5
No
1.5
Yes
1.5
1.5
Yes
1.5
No
No
7.5
1
1
7.5
Yes for listed
companies
Yes for listed
companies
1
1
75
Brazil
disclosed?
Must the compensation of individual managers be disclosed?
Must financial statements contain explanatory notes on
significant accounting policies, trends, risks, uncertainties
and other factors influencing the reporting?
Must annual financial statements be audited by an external
auditor?
Must audit reports be disclosed to the public?
Extent of shareholder governance index (0-10)
Source: Doing Business database.
Yes
1.5
Yes
1.5
Yes
1.5
Yes
1.5
Yes
1.5
6.8
Yes
1.5
6.8
Brazil
PAYING TAXES
Taxes are essential. The level of tax rates needs to be
carefully chosenand needless complexity in tax
rules avoided. Firms in economies that rank better
on the ease of paying taxes in the Doing Business
study tend to perceive both tax rates and tax
administration as less of an obstacle to business
according to the World Bank Enterprise Survey
research.
What do the indicators cover?
Using a case scenario, Doing Business measures the
taxes and mandatory contributions that a mediumsize company must pay in a given year as well as the
administrative burden of paying taxes and
contributions. This case scenario uses a set of
financial statements and assumptions about
transactions made over the year. Information is also
compiled on the frequency of filing and payments as
well as time taken to comply with tax laws. The
ranking of economies on the ease of paying taxes is
determined by sorting their distance to frontier
scores on the ease of paying taxes. These scores are
the simple average of the distance to frontier scores
for each of the component indicators, with a
threshold and a nonlinear transformation applied to
5
one of the component indicators, the total tax rate .
The financial statement variables have been updated
to be proportional to 2012 income per capita;
previously they were proportional to 2005 income
per capita. To make the data comparable across
economies, several assumptions are used.
The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is
defined as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis. It is calculated and adjusted on a
yearly basis. The threshold is not based on any economic theory of an optimal tax rate that minimizes distortions or maximizes efficiency in the tax
system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size
enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies
that do not need to levy significant taxes on companies like the Doing Business standardized case study company because they raise public revenue
in other waysfor example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all
of which are outside the scope of the methodology). This years threshold is 26.1%.
5
77
Brazil
PAYING TAXES
Where does the economy stand today?
What is the administrative burden of complying with
taxes in Braziland how much do firms pay in taxes? On
average, firms make 9.0 tax payments a year, spend
2600.0 hours a year filing, preparing and paying taxes
and pay total taxes amounting to 69.0% of profit (see the
summary at the end of this chapter for details). Most
indicator sets refer to a case scenario in the largest
business city of an economy, except for 11 economies for
which the data are a population-weighted average of the
Figure 8.1 How Brazil and comparator economies rank on the ease of paying taxes
78
Brazil
PAYING TAXES
Economies around the world have made paying taxes
faster and easier for businessessuch as by
consolidating filings, reducing the frequency of
payments or offering electronic filing and payment.
Many have lowered tax rates. Changes have brought
Table 8.1 How has Brazil made paying taxes easieror not?
By Doing Business report year from DB2010 to DB2015
DB year
Reform
DB2010
Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
79
Brazil
PAYING TAXES
What are the details?
The indicators reported here for Brazil are based on
the taxes and contributions that would be paid by a
standardized case study company used by Doing
Business in collecting the data (see the section in this
chapter on what the indicators cover). Tax
practitioners are asked to review a set of financial
statements as well as a standardized list of
assumptions and transactions that the company
completed during its 2nd year of operation.
Respondents are asked how much taxes and
mandatory contributions the business must pay and
how these taxes are filed and paid.
So Paulo : Tax or
mandatory
contribution
Payments
(number)
Notes on
payments
Time
(hours)
online filing
490
20%
gross
salaries
22.6
taxable
profit
18.2
online filing
736
15%+10%
(surcharge
applies on
annual
taxable
income
exceeding
R$ 240,000)
online filing
8.8%
net
salaries
9.3
paid jointly
8%
net
salaries
8.4
online filing
9%
taxable
profit
6.6
Property tax
2.5%
market
value of
property
3.7
So Paulo : Tax or
mandatory
contribution
Tax on interest
80
Brazil
Payments
(number)
Notes on
payments
Time
(hours)
withheld
Vehicle tax
paid jointly
interest
income
0.5
not
included
1.5%
market
value of
vehicle
0.1
11%
gross
salaries
withheld
not
included
online filing
1374
18%
value
added
(including
taxes)
online filing
9.25%
value
added
not
included
20%
value
added
(including
taxes)
not
included
Totals
online filing
9.0
2600.0
68.9
Payments
(number)
Notes on
payments
Time
(hours)
online filing
490
20%
gross
salaries
22.6
taxable
profit
18.1
online filing
736
15%+10%
(surcharge
applies on
annual
taxable
income
exceeding
R$ 240,000)
online filing
8.8%
net
salaries
9.3
paid jointly
8%
net
salaries
8.4
online filing
9%
taxable
profit
6.5
81
Brazil
Payments
(number)
Property tax
Tax on interest
Vehicle tax
Notes on
payments
withheld
Time
(hours)
2.8%
market
value of
property
4.1
20%
interest
income
0.5
1%
market
value of
vehicle
0.1
not
included
not
included
online filing
1374
19%
value
added
(including
taxes)
online filing
9.25%
value
added
not
included
not
included
withheld
online filing
20%
value
added
(including
taxes)
paid jointly
11%
gross
salaries
Totals
Source: Doing Business database.
9.0
2600.0
69.2
82
Brazil
The business:
83
Brazil
Figure 9.1 How Brazil and comparator economies rank on the ease of trading across borders
84
Brazil
So Paulo
Stages to export
Rio de Janeiro
Time (days)
Cost (US$)
Time (days)
Cost (US$)
400
400
Documents preparation
325
325
700
1,720
500
500
Totals
13
1,925
14
2,945
So Paulo
Stages to import
Rio de Janeiro
Time (days)
Cost (US$)
Time (days)
Cost (US$)
450
450
Documents preparation
275
275
700
1,720
500
500
Totals
17
1,925
17
2,945
Brazil
Documents to export
Bill of lading
Commercial invoice
Customs export declaration
Export Invoice (Nota Fiscal)
Packing list
Technical standards/ Health certificate
Documents to import
Bank document
Bill of lading
Cargo release order
Commercial invoice
Customs import declaration
Entry Invoice (Nota Fiscal)
Packing list
Technical standard/health certificate
85
86
Brazil
ENFORCING CONTRACTS
Effective commercial dispute resolution has many
benefits. Courts are essential for entrepreneurs
because they interpret the rules of the market and
protect economic rights. Efficient and transparent
courts encourage new business relationships because
businesses know they can rely on the courts if a new
customer fails to pay. Speedy trials are essential for
small enterprises, which may lack the resources to
stay in business while awaiting the outcome of a long
court dispute.
What do the indicators cover?
Doing Business measures the efficiency of the judicial
system in resolving a commercial dispute before
local courts. Following the step-by-step evolution of
a standardized case study, it collects data relating to
the time, cost and procedural complexity of resolving
a commercial lawsuit. The ranking on the ease of
enforcing contracts is the simple average of the
percentile rankings on its component indicators:
procedures, time and cost.
The dispute in the case study involves the breach of a
sales contract between 2 domestic businesses. The
case study assumes that the court hears an expert on
the quality of the goods in dispute. This distinguishes
the case from simple debt enforcement. To make the
data comparable across economies, Doing Business
uses several assumptions about the case:
87
Brazil
ENFORCING CONTRACTS
Where does the economy stand today?
How efficient is the process of resolving a commercial
dispute through the courts in Brazil? According to data
collected by Doing Business, contract enforcement takes
731.0 days, costs 16.5% of the value of the claim and
requires 43.6 procedures (see the summary at the end of
this chapter for details). Most indicator sets refer to a
case scenario in the largest business city of an economy,
except for 11 economies for which the data are a
population-weighted average of the 2 largest business
Figure 10.1 How Brazil and comparator economies rank on the ease of enforcing contracts
88
Brazil
ENFORCING CONTRACTS
Economies in all regions have improved contract
enforcement in recent years. A judiciary can be improved
in different ways. Higher-income economies tend to look
for ways to enhance efficiency by introducing new
technology. Lower-income economies often work on
Table 10.1 How has Brazil made enforcing contracts easieror not?
By Doing Business report year from DB2010 to DB2015
DB year
Reform
DB2013
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
89
Brazil
ENFORCING CONTRACTS
What are the details?
The indicators reported here for Brazil are based on
a set of specific procedural steps required to resolve
a standardized commercial dispute through the
courts (see the section in this chapter on what the
indicators cover). These procedures, and the time
and cost of completing them, are identified through
study of the codes of civil procedure and other court
regulations, as well as through questionnaires
completed by local litigation lawyers (and, in a
quarter of the economies covered by Doing Business,
by judges as well).
COURT NAME
Claim value - Rio de
Janeiro:
BRL 43,616
Claim value - So
Paulo :
BRL 43,616
Court name - So
Paulo :
City:
Table 10.2 Summary of time, cost and procedures for enforcing a contract in Brazil
Indicator
So Paulo
Rio de Janeiro
Time (days)
731
731
737
41
41
480
480
Enforcement of judgment
210
210
Cost (% of claim)
16.5
16.5
12.6
12.6
2.8
2.8
1.1
1.1
Procedures (number)
44
43
45
45
-1
-1
30.6
40
90
Brazil
Indicator
Total number of procedures (including bonus points)
So Paulo
Rio de Janeiro
44
44
No.
Brazil
91
So Paulo Procedures
Filing and service:
Plaintiff requests payment: Plaintiff or his lawyer asks Defendant orally or in writing to comply with the
contract.
Plaintiff files a summons and complaint: Plaintiff files a summons and complaint with the court (orally or
in writing).
Plaintiff pays court fees: Plaintiff pays court fees (e.g. court duties, stamp duties, or any other type of court
fees). Answer yes even if Plaintiff recovers these costs.
Registration of court case: Registration of court case by the court administration (this can include
assigning a reference number to the case).
Assignment of court case to a judge: Assignment of court case to a judge (through a random procedure,
automated system, ruling of an administrative judge, court officer, etc).
Judicial scrutiny of summons and complaint: Judge examines Plaintiff's summons and complaint for
formal requirements as a matter of law or standard practice.
Judge admits summons and complaint: Judge admits summons and complaint (after verifying the formal
requirements).
Plaintiff requests service of process on Defendant: Plaintiff requests in writing to the court for an order
that process be served on Defendant.
Court order for service: Upon Plaintiffs request, judge orders process be served on Defendant.
Delivery of summons and complaint to person authorized to perform service of process on Defendant:
The judge or a court officer delivers the summons to a summoning office, officer, or authorized person
(including Plaintiff), for service of process on Defendant.
Mailing of summons and complaint: Court or process server, including (private) bailiff, mails summons
and complaint to Defendant.
Attempt at physical delivery: An attempt to physically deliver summons and complaint to Defendant is
made.
Second attempt at physical delivery: If a first attempt is not ordinarily successful, a second attempt to
physically deliver the summons and complaint to Defendant is required by law or standard practice.
(Check yes only if a first attempt at physical delivery is not ordinarily successful)
10
Application for substituted service: Because physical delivery is NOT successful, Plaintiff has recourse to
substituted service. Substituted service can include, but is not limited to, service by publication in
newspapers or affixing of a notice in court or on public bulletin boards. Only ch
11
Court order regarding substituted service: Judge in a court order sets out acceptable means for
substituted service in a particular case.
Brazil
92
No.
So Paulo Procedures
12
Application for pre-judgment attachment: Plaintiff submits an application in writing for the attachment of
Defendant's property prior to judgment.
Decision on pre-judgment attachment: Judge decides whether to grant Plaintiffs request for prejudgment attachment of Defendants property and notifies Plaintiff and Defendant of the decision.
13
Pre-judgment attachment order: Defendant's property is attached prior to judgment. Attachment order
either involves physical attachment, or is achieved by freezing, registering, marking, or otherwise
separating and restricting Defendants movement of specific moveable assets.
14
Report on pre-judgment attachment: Court enforcement officer or private bailiff issues and delivers a
report on the attachment of Defendants property to the judge.
Trial and judgment:
Defendant files preliminary objections.: Defendant presents preliminary objections to the court.
(Preliminary exemptions differ from answers on the merits. Examples of preliminary motions are motions
to dismiss on the basis of the statute of limitations or jurisdictional objections, etc.) Checke
Plaintiffs answer to preliminary motions: Plaintiff responds to preliminary motions raised by Defendant.
Checked as yes if preliminary motions are commonly raised (step 30) and if Plaintiff responds to them
immediately.
15
Judges resolution on preliminary objections: Judge decides on preliminary objections separately from the
merits of the case. Checked as yes if preliminary objections are commonly made (step 30) and if judge
resolves the question before rendering his decision.
16
Defendant files an answer to Plaintiffs claim: Defendant files a written pleading which includes his answer
or defense on the merits of the case (see assumption 4).
17
Plaintiffs written reply to Defendant's answer: Plaintiff responds to Defendants answer with a written
pleading, which may or may not include witness statements or expert (witness) statements.
18
Framing of issues: Plaintiff and Defendant assist the court in framing issues on which evidence is to be
presented.
Court appointment of independent expert: Judge appoints, either at the parties' request or at his own
initiative, an independent expert to decide whether the quality of the goods Plaintiff delivered to
Defendant is adequate. (see assumption 5-b).
19
Notification of court-appointment of independent expert: The court notifies both parties that the court is
appointing an independent expert (see assumption 5-b).
Delivery of expert report by court-appointed expert: The independent expert, appointed by the court,
delivers his or her expert report to the court (see assumption 5-b).
Setting of date for mediation hearing: The judge sets a date for a mediation hearing, sometimes also
called a 'pre-trial conference,' and notifies the parties of the hearing date.
Brazil
93
No.
So Paulo Procedures
20
Mediation hearing: The judge, during this informal meeting with the parties, encourages them to settle
the case (acting as mediator). The case cannot be settled, the judge may draft a pre-trial conference
report, after which the case may be allocated to another judge for tr
Setting of date(s) for oral hearing or trial: Judge sets the date(s) for the oral hearing or trial.
List of (expert) witnesses: The parties file a list of (expert) witnesses with the court (see assumption 5-a).
21
Summoning of (expert) witnesses: The court summons (expert) witnesses to appear in court for the oral
hearing or trial (see assumption 5-a).
22
Oral hearing (prevalent in civil law): The parties argue the merits of the case at an oral hearing before the
judge. Witnesses and a court-appointed independent expert may be heard and questioned at the oral
hearing.
23
Closing of the evidence period: The court makes the formal decision to close the evidence period.
24
Order for submission of final arguments: The judge sets a deadline for the submission of final factual and
legal arguments.
Final arguments: The parties present their final factual and legal arguments to the court either by oral
presentation or by a written submission.
25
26
Registration of judgment: The court office registers the judgment after receiving a written copy of the
judgment.
27
Court notification of availability of the written judgment: The court notifies the parties that the written
judgment is available at the courthouse.
28
Appeal period: By law Defendant has the opportunity to appeal the judgment during a specified period.
Defendant decides not to appeal. Seller decides to start enforcing the judgment when the appeal period
ends (see assumption 8).
29
Order for reimbursement by Defendant of Plaintiff's court fees: The judgment orders Defendant to
reimburse Plaintiff for the court fees Plaintiff has advanced, because Defendant has lost the case.
Enforcement of judgment:
Plaintiff hires a lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented by
a lawyer during the enforcement of judgment phase.
30
Publication of judgment: The judgment is published in an official journal, gazette or local newspaper.
Plaintiff requests an enforcement order: Plaintiff applies to the court to obtain the enforcement order
('seal' on judgment).
31
Attachment of enforcement order to judgment: The judge attaches the enforcement order (seal) to the
judgment.
Plaintiffs request for physical enforcement: As Plaintiff commonly fears that Defendant might physically
resist the taking into custody of its previously attached movable assets, Plaintiff requests the judge or the
police authorities to obtain police assistance during the physical enforcement of the
Brazil
94
No.
So Paulo Procedures
32
Judge's order for physical enforcement: Judge orders the police to assist with the physical enforcement of
the attachment of Defendant's movable assets. Check as yes only if the pretrial order of attachment for
Defendants moveable assets does not ordinarily involve physical seizure of the as
33
Request to Defendant to comply voluntarily with judgment: Plaintiff, a court enforcement officer or a
private bailiff requests Defendant to voluntarily comply with the judgment.
34
Contestation of selection of assets identified for sale: A party, Plaintiff or Defendant, which was not
involved in the designation of the assets for attachment, contests the selection of assets for enforcement
of judgment through a sale.
35
Plaintiff identifies Defendant's assets for attachment: Plaintiff identifies Defendant's assets for attachment.
36
Attachment: Defendants movable goods are attached (physically or by registering, marking or separating
assets).
37
Report on execution of attachment: A court enforcement officer or private bailiff delivers a report on the
attachment of Defendant's movable goods to the judge.
38
Valuation or appraisal of attached movable goods: The court or court-appointed valuation expert
evaluates the attached goods.
39
Enforcement disputes before court: The enforcement of the judgment is delayed because Defendant
opposes aspects of the enforcement process before the judge.
40
Call for public auction: Judge calls a public auction by, for example, advertising or publication in the
newspapers.
41
Sale through public auction: The Defendants movable property is sold at public auction.
Direct sale: Defendant's property is sold but not through a public auction. Checked as yes if the direct
sale is common as an alternative to a public auction (assumption 9 is disregarded here).
42
Judge's decision on bids: Judge determines the adequacy of the bids presented at public auction.
43
Distribution of proceeds: The proceeds of the public auction are distributed to Plaintiff (and, where
applicable, to other creditors, according to the rules of priority).
44
Reimbursement of Plaintiffs enforcement fees: Defendant reimburses Plaintiff's enforcement fees which
Plaintiff had advanced previously.
45
Payment: Court orders that the proceeds of the public auction or the direct sale be delivered to Plaintiff.
No.
95
Brazil
RESOLVING INSOLVENCY
A robust bankruptcy system functions as a filter,
ensuring the survival of economically efficient
companies and reallocating the resources of
inefficient ones. Fast and cheap insolvency
proceedings result in the speedy return of businesses
to normal operation and increase returns to
creditors. By improving the expectations of creditors
and debtors about the outcome of insolvency
proceedings, well-functioning insolvency systems can
facilitate access to finance, save more viable
businesses and thereby improve growth and
sustainability in the economy overall.
Court fees
Lawyers fees
Assessors and auctioneers fees
Other related fees
Outcome
Whether business continues operating as a
going concern or business assets are sold
piecemeal
Recovery rate for creditors
Measures the cents on the dollar recovered
by secured creditors
Outcome for the business (survival or not)
determines the maximum value that can be
recovered
Official costs of the insolvency proceedings
are deducted
Depreciation of furniture is taken into
account
Present value of debt recovered
Strength of insolvency framework index (016)
Sum of the scores of four component indices:
Commencement of proceedings index (0-3)
Management of debtors assets index (0-6)
Reorganization proceedings index (0-3)
Creditor participation index (0-4)
96
Brazil
RESOLVING INSOLVENCY
Where does the economy stand today?
Combination of quality regulations and efficient practice
characterize the top-performing economies. How
efficient are insolvency proceedings in Brazil? According
to data collected by Doing Business, resolving insolvency
takes 4.0 years on average and costs 12.0% of the
debtors estate, with the most likely outcome being that
the company will be sold as going concern. The average
recovery rate is 25.8 cents on the dollar. Most indicator
sets refer to a case scenario in the largest business city of
an economy, except for 11 economies for which the data
are a population-weighted average of the 2 largest
business cities. See the chapter on distance to frontier
and ease of doing business ranking at the end of this
profile for more details.
Figure 11.1 How Brazil and comparator economies rank on the ease of resolving insolvency
Brazil
97
Brazil
98
Brazil
99
Brazil
Table 12.1 What changes did Brazil make in terms of labor market regulation?
DB year
Reform
DB2013
101
Brazil
So Paulo
Rio de Janeiro
Data
Data
Yes
Yes
24 months
24 months
24
24
437.80
0.31
484.24
0.34
102
Brazil
So Paulo
Rio de Janeiro
Data
Data
Yes
6.0
6.0
20%
20%
100%
100%
Yes
Yes
No
No
Paid annual leave for a worker with 1 year of tenure (in working days)
26.0
26.0
Paid annual leave for a worker with 5 years of tenure (in working days)
26.0
26.0
Paid annual leave for a worker with 10 years of tenure (in working
days)
26.0
Paid annual leave (average for workers with 1, 5 and 10 years of tenure,
in working days)
26.0
Yes
26.0
26.0
103
Brazil
Rio de Janeiro
Data
Data
3.0
3.0
Yes
Yes
No
No
No
No
No
No
No
No
No
No
No
No
No
No
104
Brazil
So Paulo
Rio de Janeiro
Data
Data
4.7
6.4
8.6
6.6
1.7
8.3
16.6
8.9
4.7
6.4
8.6
6.6
1.7
8.3
16.6
8.9
Doing Business also assesses the mechanisms available to resolve labor disputes. More specifically, it collects data
on what courts would be competent to hear labor disputes and whether the competent court is specialized in
resolving labor disputes.
105
Brazil
So Paulo
Rio de Janeiro
Data
Data
Yes
Yes
No
No
Yes
Yes
106
Brazil
Distance to Frontier
The distance to frontier score captures the gap between
an economys performance and a measure of best
practice across the entire sample of 31 indicators for 10
Doing Business topics (the labor market regulation
indicators are excluded). For starting a business, for
example, Canada and New Zealand have the smallest
number of procedures required (1), and New Zealand the
shortest time to fulfill them (0.5 days). Slovenia has the
lowest cost (0.0), and Australia, Colombia and 110 other
economies have no paid-in minimum capital
requirement (table 15.1 in the Doing Business 2015
report).
Calculation of the distance to frontier score
Calculating the distance to frontier score for each
economy involves 2 main steps. First, individual
component indicators are normalized to a common unit
where each of the 31 component indicators y (except for
the total tax rate) is rescaled using the linear
transformation (worst y)/(worst frontier). In this
formulation the frontier represents the best performance
on the indicator across all economies since 2005 or the
third year after data for the indicator were collected for
the first time. For legal indicators such as those on
getting credit or protecting minority investors, the
frontier is set at the highest possible value. For the total
tax rate, consistent with the use of a threshold in
calculating the rankings on this indicator, the frontier is
107
Brazil
City
Weight (%)
Dhaka
Chittagong
So Paulo
Rio de Janeiro
Shanghai
Beijing
Mumbai
Delhi
Jakarta
Surabaya
Tokyo
Osaka
Mexico City
Monterrey
Lagos
Kano
Karachi
Lahore
Moscow
St. Petersburg
New York
Los Angeles
78
22
61
39
55
45
47
53
78
22
65
35
83
17
77
23
65
35
70
30
60
40
108
Brazil
109
Brazil
Law library
Online collection of business laws and regulations
relating to business
http://www.doingbusiness.org/law-library
Contributors
More than 10,700 specialists in 189 economies who
participate in Doing Business
http://www.doingbusiness.org/contributors/doingbusiness
Entrepreneurship data
Data on business density (number of newly
registered companies per 1,000 working-age
people) for 139 economies
http://www.doingbusiness.org/data/exploretopics/ent
repreneurship
Distance to frontier
Data benchmarking 189 economies to the frontier
in regulatory practice
http://www.doingbusiness.org/data/distance-tofrontier
Information on good practices
Showing where the many good practices identified
by Doing Business have been adopted
http://www.doingbusiness.org/data/good-practice
Doing Business iPhone App
Doing Business at a Glancepresenting the full
report, rankings and highlights for each topic for
the iPhone, iPad and iPod touch
http://www.doingbusiness.org/specialfeatures/
iphone
Brazil
110
INTRODUCTIONI
No country has ever managed to be asked to host the worlds two biggest sports
events in such quick succession. By being awarded the rights to host the 2014 FIFA
World Cup and the 2016 Summer Olympics, Brazil has been consecrated as a new
world power, one that emerged during Incio Lula da Silvas two terms as president,
from 2003 to 2011.
Despite a reduced growth rate forecast for 2013, its favourable indicators contrast
with a world in crisis. Described as an impassive colossus in its national anthem, it has
narrowed the gulf between rich and poor in the past decade, enhanced its diplomatic
influence in the western hemisphere and is now attracting not only investors but also
new immigrant waves from a Europe in recession.
But this is not to say that violent crime, corruption and inequality are all a thing of the
past. A record of 11 journalists killed in 2012, five of them in direct connection with
their work puts Brazil among the worlds five deadliest countries for the media.
Murders are not the only way that freedom of information is violated in Brazil. The level
of concentration of media ownership contrasts starkly with the extent of its territory
A woman with the and extreme diversity of its civil society. The colossus is clearly a bit too impassive
Brazilian flag painted about pluralism a quarter-century after its return to democracy in 1985.
on her face during
a demonstration on Despite having one of the worlds leading Internet communities and even its own
the 52nd anniversary national Facebook equivalent, called Orkut, Brazil falls far short of providing all of its
of the founding of the citizens with equal and untrammelled access to online information. The Internet is much
city of Brasilia more subject to censorship and blocking than in neighbouring countries, contrary to the
on 21 April 2012. image that Brazil is promoting of itself ahead of the World Cup and Olympics.
st
Ri
ca
Panama
Venezuela
Guyana
Suriname
Colombia
French
Guiana
Ecuador
Brazil
Peru
c Brasilia
Bolivia
brazil
Area
8 514 876km2
Population
193 000 000
(2011)
Language
portugais
President
Dilma Rousseff,
since Jannuar 2011
focusI
a
Rio de Janeiro
So Paulo
Paraguay
Chile
Argentina
Uruguay
press freedom
b
Killed reporters
2012 :5
2011 :3
2010 :1
SummaryI
1. Journalism under the sway of the colonels
Court prohibitions
10
Legislative responses
11
14
15
18
Reverse paternalism
19
22
Recommendations
26
The shape of media ownership in Brazil directly affects the free flow of news and
information and obstructs pluralism. Ten leading business groups owned by as
many families still control the mass media market. Broadcasting is dominated by
the Rio-based Globo group, owned by the Marinho family, followed by the Sistema
Brasileiro de Televiso (SBT), owned by the Silvio Santos group, Rede Bandeirantes
owned by the Saad group, and Record (owned by the evangelical protestant bishop
Edir Macedo see box page 20). In the print media, the pack is again led by the
Globo group, with the Globo daily, which is rivalled at the national level by the
Folha de So Paulo group, owned by the Frias Filho family, the O Estado de So
Paulo group, owned by the Mesquita family, and by Editora Abril, which publishes
the weekly Veja and other magazines. Less polarized than the media in its South
American neighbours, where state and privately-owned media are often at war with
each other, the Brazilian media reflect their almost incestuous relationship with the
political and economic power centres. Concentration of ownership at the national
and regional level and harassment and censorship at the more local level are the
distinguishing features of a system that has never really been questioned since the
end of the 1964-85 military dictatorship, with community media often the main
victims (see boxe page 20). The generals have gone but the colonels remain.
As well as an army rank, the term colonel in Brazil refers above all to the archetypal
big landowner common in the northeast who has direct control over political power
even if he does not exercise it himself. He is king in his own state and very often
also a media owner, a local or federal parliamentarian or powerful industrialist. We
have tens of Berlusconis, maybe more than 30 Berlusconis, said Eugnio Bucci, a
So Paulo university professor and regular columnist for the daily O Estado de So
Paulo and the magazine poca. Bucci knows the ins and outs of the Brazilian media,
having worked for them for years and having for a while headed the state radio
station Radiobras. And he is not sparing in his criticism of the colonel system and
its heritage. The federal communication minister, Paulo Bernardo, recently said it is
easier to remove the president in Brazil than to withdraw a broadcast frequency from
any politician, and this is still true, Bucci said, referring to the 1992 impeachment
Ten leading
business
groups control
the mass
media market
Court prohibitions
Financial and political tutelage is unfortunately not the only constraint on diverse and
freely-reported news and information in Brazil. Courts that are readily influenced
by local political official are nowadays just as much a threat. Here again, the colonel
system is an enduring heritage. Referring to Jos Sarney, who was president
from 1985 to 1990 and is now federal senate speaker, a university academic and
free speech activist said:The state I come from, Maranho, is entirely under the
Sarney familys thumb. A journalist or blogger, or even a comedian or performing
artist will be declared persona non grata in Maranho for the least criticism of our
patriarch. Lcio Flvio Pinto, a journalist and blogger in the northern state of Par,
has been sued more than 30 times because of his articles drawing attention to
the deforestation and trafficking in precious woods that is threatening the Par
environment. Sometimes the courts go as far as to anticipate the local colonels
wishes. In the northeastern state of Sergipe, Jos Cristian Ges is the target of
both civil and criminal proceedings in connection with a short piece of fiction that
he posted on his blog in May 2012. It mocked the nepotism and corruption of local
politicians but mentioned no names or dates and did not elicit any legal action from
Sergipe governor Marcelo Ded.
Nonetheless, Edson Ulisses de Melo, a high court judge who is the governors
brother-in-law and who was appointed by him, brought a complaint against Ges,
who is now facing not only a possible heavy damages award and court costs of more
than 25,000 reais (9,000 euros) but also the possibility of a four-year jail sentence.
This is outrageous, especially as the 2009 repeal of the 1967 press law, a hangover
from the military dictatorship, effectively abolished prison sentences for libel, slander
and insult.
The Ges case is one of the many examples of a surge in lawsuits against news
and opinion providers that began shortly after the repeal of the 1967 law. Even if
the possibility of imprisonment for an article is no longer a real threat, demands for
often exorbitant damages have filled the gap. More seriously, the lawsuits are being
accompanied with increasing frequency by an absurd form of partial preventive
censorship, in which a news media is banned from providing any further coverage of
the subject at issue although the information is available through other news outlets.
The most famous example concerns a major national daily and shows that the
Sarney familys influence extends beyond the borders of Maranho state. O Estado
de So Paulo and its website Estado have been subject to a court order since
July 2009 banning them but no other news outlet from referring in any way to
sensitive matters involving the former presidents son, businessman Fernando Sarney.
The ban is still in place because the Estado media group rejected Fernando Sarneys
offer to withdraw his lawsuits in exchange for a pledge from Estado to censor its
coverage of his business affairs.
A woman reading
a newspaper in
downtown Salvador on
7 February 2012.
The least violation of this judicial order would cost us 150,000 reais (55,500
euros) a day, said Estado Group content director Ricardo Gandour, who attributes
the curbs that the courts impose on news and information to historic attitudes that
Brazil has not yet managed to shed. Before the emergence of an autonomous
and independent Brazilian society with its own press, Brazil had a royal court that
imposed its control, he said. Something remains of that culture, which explains the
fact that the absolute value of freedom of expression has not yet been accepted.
There are many Brazilian judges who do not really understand what free speech and
the free flow of information mean. Carlos Ayres Britto, a former president of the
Federal Supreme Court (Brazils highest court and guarantor of the constitution)
and architect of the 1967 laws repeal, has also been the moving force behind last
Novembers creation of a National Forum on the Judiciary and Media Freedom, which
will hopefully lead to better court decisions affecting freedom of information. Will it
also benefit the Internet?
Censorship
of the Internet
It is hard to imagine that preventive censorship would be capable
of containing the flow of news and information on the Internet.
Nonetheless, Brazils courts are above all targeting online
information. The debate about Internet regulation has developed
into a legislative battle involving rival parliamentary initiatives.
Winner of the Esso Prize for TV journalism in 2012, Fbio Pannunzio is a reporter
and presenter on the national television channel TV Bandeirantes (or TV Band).
Until recently he was also a blogger but he had to close his Blog do Pannunzio on
26 September as a result of the four civil and criminal proceedings brought against
him in the states of So Paulo and Paran. I will be asked to pay 2 million reais or
1 million dollars for every future reference I make to the cases I am being sued over,
and I have already had to fork out 53,000 reais (20,000 euros) in fees for eight
lawyers, the exasperated journalist said. Two of the actions against Pannunzio were
brought by Mato Grosso parliamentarian Jos Geraldo Riva, who has himself been
named in a total of 142 lawsuits. Pannunzio criticized his business activities and
accused him of collusion in questionable matters that had never been mentioned by
the local press. The other two proceedings are the result of a complaint by So Paulo
state public security chief Antnio Ferreira Pinto, who was accused by Pannunzio in a
June 2012 post of covering up serious human rights abuses by the police. I covered
the same cases on the air for TV Bandeirantes as I did on my blog but, curiously, I
was never sued as a TV reporter, only as a blogger, Pannunzio said. So it is clear
that the censors look for vulnerability.
Outspoken blogs were hounded by the courts during the 2012 municipal election
campaign and some were closed down at candidates requests for nothing more than
just posting unfavourable opinion polls. Not even the Internet heavyweights escaped
the persecution. Google Brazil had to take down or modify around 300 items relating
to the elections. Altogether, it was asked to remove more than 2,300 items between
January and June 2012. According to Googles Transparency Report, Brazil ranks
third behind the United States and India and ahead of France in government
requests for information about users. Google Brazil president Fbio Coelho was even
arrested by the police on 26 September for being slow to remove a video posted by
a voter that was deemed to have insulted a candidate. Marcel Leonardi of Google
Brazil said:Its the local judges assessment that always counts, an assessment
based on two obsolete laws. One is an electoral law that dates back to 1965, the
military dictatorship, and has never been changed. The other is an electoral law
that was bizarrely updated in 2009. It treats all types of media in the same way
and provides for the possibility of preventive censorship, which in practice varies
enormously from one state to another. Google is anxiously awaiting the outcome of
the legislative battle about the future regulation of the Brazilian Internet. The impact
could be felt throughout the world and the United Nations special rapporteur for
freedom of expression has already issued a warning about the perverse effect of
making Internet companies liable for the content posted online.
Legislative responses
Not only freedom of expression but also technological creation is now really
threatened on the Brazilian Internet, said Srgio Amadeu, a university academic and
sociologist, and adviser to Brazils Internet Management Committee. Intellectual
property rights are providing new grounds for censorship along with the traditional
allegations of defamation and insult, as seen in the lawsuit accusing the satirical blog
Falha de So Paulo1 of improper use of Folhas trademark. The issue of copyright
along with those of Net neutrality and private data protection are supposed to be
addressed by a much-awaited draft law, known as the Marco Civil law, which
could be held up as model for other countries. However, a final vote in the Chamber
of Deputies has already been postponed five times (see box page 12). Based on
recommendations by the Internet Management Committee and proposed by Workers
Party deputy Alessandro Molon, the bill is a response to two new cyber-crime
laws that were adopted and promulgated in December. One of them, Law 12735,
proposed by senator Eduardo Azeredo of the Brazilian Social Democratic Party
(PSDB) and then heavily amended, caused a great of online agitation with a
provision finally vetoed by the president under which the Internet would have
been partly placed under military control to prevent any Brazilian WikiLeaks.
Many people described this law as a digital AI5, Amadeu said, alluding to
Institutional Act No. 5 (AI5) of 13 December 1968, under which the military
government gave itself the power to suspend institutions and fundamental freedoms
at any time in the name of state security. But the real offensive against the Internet
is now coming from the telecom companies, which want to control the flow of online
data at the expense of Net neutrality and keep the data of individual users for as
long as they see fit. They are the enemies of freedom of information and pose the
biggest obstacle to adoption of the Marco Civil. His view if shared by Arthur William,
the national coordinator of the World Association of Community Radio Broadcasters
(AMARC-Brazil), who thinks the Internet companies pose as big a threat to digital
radio stations as the existing telecommunications legislation (see box 20) does to
community radio stations. With the very unfair distribution of broadcast frequencies
and the very limited space for community radio, many small radio stations are forced
to turn to Internet broadcasting, William said. But these digital radios are subjected
to broadcasting costs even higher than analogue broadcasting. Internet operators
that charge blanket rates are directly to blame. It is similar to the way that broadcast
frequencies are allocated sparingly and without the use of reliable criteria.
Democratization of online information and democratization of information on the
airwaves go hand in hand. Many journalists, unions, civil society groups, community
organizations and Internet sector representatives are calling for global regulation
that includes this. But they all know they will have to overcome a combination of
political and business interests that have prevented Brazil from attaining the levels of
pluralism that could have been expected. The perspectives have not been improved
by the level of violence against the media reached in 2012.
11
1.
The blogs name
is a play on folha
(paper) and falha
(failure)
promising but
kicked around
Proposed by federal deputy
Alessandro Molon and
backed by former President
Lula when presented to
parliament, the so-called
Marco Civil draft law on the
Internet aims to define the
rights and duties of the state,
the public and technical
intermediaries (the various
kinds of Internet access and
service providers) regarding
use of the Internet.
A mosaic of the
Brazilian flag
decorates
the cable-car
station at Complexo
do Alemo, a
network of favelas
in Rio de Janeiro.
10 October 2011.
13
Deadly year
for media personneli
A total of 11 journalists were killed in 2012, five of them in
connection with their work. This was largely due to the degree to
which journalists and news media are exposed to often violent
local political disputes. Consideration is now being given to the
idea that crimes of violence against freedom of information should
be treated as federal crimes.
Their names are Mrio Rodolfo Marques Lopes, Dcio S, Valrio Luiz de Oliveira,
Paulo Rocaro and Eduardo Carvalho. They were the five journalists, some of them
also bloggers, who were killed in 2012 for reasons directly related to their profession.
Their cases highlighted the different kinds of violence to which Brazilian journalists
are still exposed. Both Paulo Rocaro, editor of the Jornal da Praa daily, and Eduardo
Carvalho, editor of the Ultima Hora News website, were based in Mato Grosso do Sul,
a state bordering Paraguay that is a drug-trafficking hub. And both paid the price
for writing about the cartels and their infiltration of local government. The motives
are much less certain in the case of Valrio Luiz de Oliveira, a sports commentator
for Rdio Jornal 820 AM, a privately-owned regional station in the central state
of Gois, but he was known for being outspoken and sometimes very sharp in
his comments about the managers of clubs linked to political circles. Both Mrio
Randolfo Marques Lopes, the victim of a execution-style murder in February in Rio
de Janeiro state, and Dcio S, gunned down in April in Maranho, had been critical
of local government practices and corruption in their blogs, called Vassouras na Net
and Blog do Dcio respectively.
The recent increase in the number of murders of journalists and the possible
responses are the subject of debate. Some journalists are reluctant to offer a firm
diagnosis. They include Marcelo Moreira, who is president of the Brazilian Association
of Investigative Journalism (ABRAJI) and head of programming at TV Globo.
ABRAJI has no set theory, he said. The murders cannot be linked to an overall
context similar to the context in Mexico or Colombia. But it is clear that the level
of impunity continues to be high and pressure from journalists and civil society is
needed to obtain results. Too many cases unfortunately go unreported or receive
little coverage. Another journalist went further. Murders of journalists do not elicit
the same response from the journalistic profession and international opinion as they
do in other countries, he said. In many cases it is well known, although it may not
be spelled out, that the victims had other interests, political or activist, that may have
exposed them to reprisals.
Relations with local politicians seem to account for the marked increase in threats
and physical attacks on journalists and news media in recent years, with a worrying
surge in the number of cases during the campaign for the municipal elections
held on 7 and 29 October 2012. Jos Augusto Guto Camargo, president of the
5,000-strong So Paulo Union of Journalists and general secretary of the National
Federation of Journalists (FENAJ), said local officials constitute the major source
of hostility towards journalists. In 2011, Camargo registered 60 cases of violence of
different kinds against journalists that was directly related to their work. This brought
Brazil back to the level of 2005-2006, after an average fall of 20 points until 2010.
More than half of the cases were located in the north and northeast, followed by the
southeast (including Rio and So Paulo) and the centre-west, Camargo explained.
Only the three southern states seem to have been relatively spared.
No murder of a journalist has been reported there for seven years. This geographical
distribution varies little. Similarly, politically-motivated attacks continue to be the most
frequent, followed by reprisals linked to coverage of crime or stories involving police
abuses. The problem is that violence of political origin, very often superimposed on
censorship, is both the most common and least visible. Last year also saw two cases
of journalists being forced to flee abroad as a result of threats of police origin. They
were Andr Caramante of Folha de So Paulo and Mauri Knig of Gazeta do Povo,
a daily based in the southern city of Curitiba.
15
A press law
17
Outside wall of a
favela monitoring
group in the north
Rio favela of Mar.
Double standards
on news providers
during pacificationi
Brazils showcase city, Rio de Janeiro, is sprucing itself up for the
FIFA World Cup and Olympic Games and, as part of the facelift, the
police are trying to reclaim control of the most visible favelas from
criminal gangs in a controversial process called pacification that
has exposed the gulf between the different kinds of news providers
in Brazil.
Thank you FIFA! is the ironic message of a mural in Metro-Mangueira, a favela in
northern Rio de Janeiro, just a few blocks from the legendary Maracan stadium. The
mural shows a young carioca (Rio inhabitant) in the famous yellow shirt worn by the
Seleo, the national team that has won the World Cup five times and is expected
by Brazilians to win it again at home in less than two years time. The words Thank
you FIFA! are painted as tears on the boys eyes because the small favela lost nearly
half of its 600 inhabitants as part of the city-wide preparatory clean-up.
The pacification of Rios favelas has been officially under way since 2008. The
process began with the deployment of soldiers and elite members of the local police
to hunt down the drug dealers who traditionally impose their own law in the favelas.
A journalist was killed in one of the ensuing shootouts. It was TV Bandeirantes
cameraman Gelson Domingos da Silva, who was fatally wounded on 6 November
2011 in Antares, a favela in the western part of the city. After the big cleansing
operations, the next stage of the pacification has been the deployment of the
7,000-member Pacification Police Units (UPP) to keep a permanent watch on
the neighbourhoods supposedly reclaimed from the criminal gangs. But Andr
Fernandes, co-director of the Favela News Agency (ANF), says it is more of an
occupation than a pacification. With a total of 140 employees and contributors,
ANF operates a news website and publishes A Voz da Favela, an eight-page
newspaper-style monthly.
Pacification may mean crime in retreat in certain places and favelas finally
accessible to an outside population that would never have set foot in them before,
Fernandes said. But for favela residents, it also means fear of a police whose
methods have scarcely changed, small shops hastily dismantled, rents that have often
tripled and above all, the continuing lack of long-term public health and education
projects. And what will happen after 2016? Clber Arajo, the head of a small
businessmens association in Complexo do Alemo, a sprawling conglomeration
of 13 favelas with 100,000 inhabitants in the north of the city that has also been
pacified, makes no bones about his scepticism. For the time being improving the
favelas responds to a political, economic and media interest that will clearly no longer
be the same after the Olympic Games, he said.
The authorities
have decided
its time to
pacify Rios
favelas
Reverse paternalism
The image problem involves two keys issues for the provision of news and
information. One is coverage of the favelas by the media and the other is the ability
of the favela communities to cover their own news. Eduardo S, a freelance reporter
for the So Paulo monthly Caros Amigos and the magazine Fazendo Media who has
written more than a dozen articles about favela life, is very critical of the mainstream
medias coverage of the favelas. Their coverage is a reflection of the logic imposed
by pacification, which is focusing above all on the favelas nearest the sites of the big
sports events, he said. Priority is being given to the sensational and short term. The
favela residents find it hard to accept a media presence they regard as one-sided
and often limited to covering the major police operations.
Nelson Moreira of the daily O Dia, who heads the Rio de Janeiro journalists union,
denies that his newspaper pays too much attention to pacification and demolition
operations, especially now that some favelas are under control. He also points out
that the pacified favelas are in the minority and do not include those in the western
part of the city where quadrilhas criminal gangs consisting of retired and active
service soldiers and police officers prevent any media presence. Moreira is still
traumatized by the 2008 abduction and torture of three O Dia employees by a
quadrilha in the Batn favela, which is far from any of the future Olympic sites. As
regards the pacified favelas, he likes to think that perceptions are changing and
points to the tourist interest that the favelas are eliciting in the media, especially the
print media.
Marcelo Beraba, the Estado de So Paulos Rio bureau chief and cofounder of
ABRAJI, is also ready to examine his conscience on the subject of the favelas,
although it is not easy because this extremely sensitive subject exposes the entire
countrys inner thoughts about itself. It is true, the leading media peddled this fear
that Rio would turn into one gigantic favela for too long, often to the detriment of
the 20 per cent of the population that live in the communities, more than 1 million
of the 6 million cariocas, said Beraba, who is also his newspapers mediator. We
should be talking about jobs and housing and not just pacification. But the outside
worlds attention, which will inevitably concentrate on the sports events, can also
have its perverse effects. We must pay attention to our own excesses, the lucid
Beraba qualified. Because in the process of evolving, we, the mainstream media,
have yielded to a sort of reverse paternalism. Helping an additional tourist attraction,
suddenly everything is supposed to idyllic in the favelas. But for how long? Raika
Moiss, co-editor of Midia e Favela, an online newsletter published by a monitoring
group based in Mar, a still unpacified northern favela, seems more optimistic.
While it is true that our publication focuses on subjects that the mainstream media
See Page 22
19
BroadcastingI
community radio
stations still
persecuted
Brazils progressively-minded
community broadcaster networks
regard the new legislation in
neighbouring countries such
as Argentina and Uruguay with
envy and find it hard to accept
that there has been no legislative
progress under either President
Lula or his political heir and
successor, Dilma Rousseff.
21
The lack of
pluralism is
obviously a
challenge
Some community broadcasters have illegal frequencies. Others are legal but lack
frequencies. TV Tagarela (which means Chatterbox TV) is one of the latter. Located
in Rocinha, a sprawling favela next to Leblond, a guarded neighbourhood with luxury
villas on the south side of Rio, this TV station without a TV broadcast frequency was
briefly suspended at the start of pacification but has been recognized as a legal
entity since 2008. It covers only part of Rocinha but thanks to the ingenuity of its
12 producers, three of who have been collecting salaries for the past few months,
it has won support and will celebrate its 15th anniversary on 1 May. As we cannot
broadcast, we record live, said Augusto Pereira, one of the producers. We organize
public debates with as many participants as possible, then we record the debates on
videotape, we duplicate the tapes and we sell them. Thats how we finance ourselves.
What with that and producing videos for other people, we make about 2,000 reais
(700 euros] a year). Public health and education are the priority subjects for this
original community TV station, which steers clear of the subject of drugs because of
the continuing threat from gun-toting dealers, despite pacification. It is not the only
danger.
never or rarely cover, the big media groups are beginning to fund and sponsor
projects, she said. Its a sign that our efforts to describe a different aspect of these
neighbourhoods are starting to bear fruit.
Loudspeakers instead of
broadcast frequencies
Should addressing the image problem depend solely on the inclinations of the often
fickle mainstream media? Journalists from the favelas logically say no. The lack
of pluralism is obviously a challenge to them. A major challenge given the limited
resources available to them to make their voice heard. A community leader and
champion of the black consciousness that Brazil celebrates every 20 November,
Rumba Gabriel likes to brandish a South African flag to symbolize his cause. But
he knows the flag alone has little chance of rallying support without the help of a
broadcast frequency and Radio Liberdade, the radio station he used to host along
with six other people in Jacarezinho, has not been broadcasting for the past four
months. They blamed interference and electricity theft, but in reality they just wanted
to silence us, Gabriel said. Its the same for many other small radio stations. It is
difficult, if not impossible, to raise the consciousness of people who are already
marginalized and who keep hearing all today that pacification means change, as if
the favelas were at war. He also bitterly condemned the extinction of the local funk
culture and the festive favela atmosphere since pacification.
RSF
Our goal is dialogue and debate, not immediate news reporting, Pereira said. We
would love to extend our activities but everyone here has outside jobs and we achieve
only 10 per cent of what we would like. As well as technical handicaps, he cited their
often strained relations with the UPP, who are sometimes quick to censor an event
because the communities are not in the habit of requesting permission from the
police before organizing meetings of cultural events. Pereiras concern is above all
due to what he calls a veiled repression that is familiar to community and alternative
media. We are always hemmed in by politicians who want to use us for their own
purposes. And that is far more difficult to get out of.
23
Truth Commissions
are participating. The So
Paulo Truth Commission has
five parliamentarians and
six advisers. We are going
through archives, interviewing
witnesses and holding
hearings. We can summon
former torturers to make a
statement, as part of an open
forum, once all the evidence
has been gathered.
1. A US-backed repressive
military alliance between six South
American military dictatorships
Argentina, Bolivia, Brazil, Chile,
Paraguay and Uruguay during the
1970s.
2. President Dilma Rousseff
was jailed and tortured during
the military dictatorship because
of her involvement with urban
guerrilla groups. Her predecessor
as president, Lula, was jailed as an
opposition union leader.
3. Vladimir Vlado Herzog, editor
in chief of So Paulo-based TV
Cultura, was detained and tortured
to death on 25 October 1975 at
the age of 38. The military police
officers who killed him disguised his
death as suicide by hanging. A prize
and an institute opened in 2009
have been named after him.
25
recommendationsI
Given the situation described in this report and the calls from both journalists
and civil society in Brazil for balance and diversity in the provision of news and
information, Reporters Without Borders advocates:
A complete overhaul of the current legislation governing the media, which is not fit
for purpose. The new legislation should include strict clauses on media ownership
and media funding through state advertising. A bill being discussed in the state of
Rio Grande do Sul envisages setting aside at least 10 per cent of advertising for
small and community media. This idea should be developed.
The inclusion in this future legislation of provisions on the allocation of
broadcast frequencies that create space for community broadcasters, until now
under-represented in the field of legal frequencies. Newly-adopted legislation
in Argentina and Uruguay could serve as example for defining community
broadcasters, to avoid competition from those dedicated to religious proselytism.
27
This publication is
a joint project with
Contents
Executive summary
Foreword
16
Taxation in Brazil
22
34
36
Trade
38
Banking in Brazil
40
HSBC in Brazil
42
Country overview
44
Contacts
46
Disclaimer
This document is issued by
HSBC Bank Brazil SA (the bank)
in Brazil in partnership with
PricewaterhouseCoopers (PwC).
It is not intended as an offer or
solicitation for business to anyone in
any jurisdiction. It is not intended for
distribution to anyone located in or
resident in jurisdictions which restrict
the distribution of this document.
It shall not be copied, reproduced,
transmitted or further distributed by
any recipient.
The information contained in this
document is of a general nature only.
It is not meant to be comprehensive
and does not constitute financial,
legal, tax or other professional
advice. You should not act upon
the information contained in this
publication without obtaining specific
professional advice. This document
is produced by the Bank together
with PricewaterhouseCoopers
(PwC). Whilst every care has been
taken in preparing this document,
neither the Bank nor PwC makes
any guarantee, representation or
warranty (express or implied) as to its
accuracy or completeness, and under
no circumstances will the Bank or
PwC be liable for any loss caused by
reliance on any opinion or statement
made in this document. Except as
specifically indicated, the expressions
of opinion are those of the Bank
and/or PwC only and are subject to
change without notice. This document
is not a Financial Promotion.
The materials contained in this
publication were assembled in
May 2012 and were based on the
law enforceable and information
available at that time.
Executive summary
Brazil is one of the most
promising emerging markets
in the world. A high degree
of diversification in its product
exportation base, a diversified
list of trading partners, internal
economic stability, increasingly
large work force and good
social standards are helping
to attract more and more global
investors. In addition to this, the
forthcoming 2014 Soccer World
Cup and 2016 Olympics are
generating a large number
of infrastructure investment
opportunities.
The Brazilian Government
and Congress have made
a concerted effort to improve
the economic stability of the
country and have implemented
changes in Brazils tax
legislation, governance,
and regulatory background.
There are still a few reforms
to be implemented by the
new Government, but Brazil
is demonstrating that
it is becoming increasingly
connected with the international
business network.
The purpose of this publication
is to provide foreign investors
with a broader view of the
current economic, legal and
business environment, to be
faced when doing business
in Brazil.
Foreword
Currently, business opportunities
reach the world over. At the
time when business and
economic horizons have
broadened there has also
been a significant increase in
competition among companies.
For this reason it is essential
to have a secure, dependable,
and well-positioned partner to
stay ahead of the competition.
This is what HSBC offers to
our corporate clients.
HSBC Brazil is present in 545
municipalities and includes a
customer base of more than
5.2m individual clients and
almost 460 thousand business
clients. HSBC seeks to generate
excellent business relationships
that perform for its clients,
attending to each and every
need with appropriate support.
Brazil is in the top-ten of world
economies, sporting a vibrant
agricultural industry that
continues to grow. The country
has awakened the attention
of the world by creating
a healthy and productive
business environment. In 2008,
when global markets were
shaken by the economic crisis,
Brazil was one of the least
affected. This demonstrates
Brazils stable and balanced
economy supported by a strong
and consistent economic policy.
According to World Bank data,
Andr Brando
President and
Chief Executive Officer
HSBC Bank Brasil SA
Introduction
Doing business in Brazil
Economic environment
Economic History
The Brazilian economy is large and
diverse by almost any standard.
There is still a considerable
state and semi-state participation
in various strategic sectors,
such as transport and utilities.
Brazil has undergone several
privatisation programmes of
state-owned companies, most
of which took place in 1998.
Nearly all of the former state
companies are now controlled
by the private sector.
Natural resources and agriculture
have been the traditional
mainstay of the economy,
supported by abundant human
resources. Since the 1960s,
however, the emphasis has
been placed on industrial
development financed largely
with international loans and
investments. As a result,
exports today reflect a
much more balanced mix of
commodities and manufactured
items. Moreover, the profile
of imports became more
restricted during the 1970s
and 1980s because of the
import substitution and the
scarcity of foreign currency.
This situation is changing
following the lowering of trade
barriers and the increased
opening of the economy to
globalisation.
The most important business
sectors in Brazil are mineral and
8
Language
The official language of Brazil
is Portuguese. There are no
significant local dialects or other
deviations from the official
language, but a number of words
and phrases differ from those
used in Portugal. English is the
foreign language most used
by the business community
in Brazil.
Ease of Doing Business/
Ease of Leaving
The general policy is to admit
foreign capital and treat it in
the same way as local capital.
All inward investments must
be registered with the Central
Bank to ensure ultimate
repatriation rights within
30 days. It should be noted
that acquisitions of local
companies should be thoroughly
investigated to confirm their
real underlying value.
The basic legal concepts
regulating foreign capital in
Brazil are defined in Laws
4131 of 1962 and 4390 of
1964, which were regulated
by Decree 55762 of 1965.
The legal concept of foreign
capital includes tangible and
intangible assets.
10
in jurisdictions considered
as tax havens).
Loans may be repatriated
within the terms of the registered
loan contract. Interest is freely
remittable within the loan contract
terms subject to withholding
income tax at the rate of
15% (25% if the beneficiaries
are domiciled in jurisdictions
considered as tax havens).
Although it may seem easy
for investors to do business in
Brazil, it is important to highlight
a few key aspects imposed
by Brazilian laws which
can still be considered as
bureaucratic. The most usual
procedure for a foreign investor
to start doing business in Brazil
is by organising a company.
In order to do so, the company
must request a Federal Tax
Number (CNPJ) by registering
the Cademp (Cadastro de
Empresas) at Central Bank. If
the intention is to invest other
Brazilian companies or if the
intention is exclusively to be
part of the Brazilian financial
market, then the company must
register itself at the Brazilian
Securities Commission CVM.
Nowadays, one of the most
bureaucratical procedures to
be followed in Brazil is to
execute the decision of winding
up local presence. A lot of
compliance and tax duties can
be demanded in this case. The
time required to close a
business in Brazil may be
significant.
Securities Commissions
(CVM) responsible for the
regulation of the securities
markets and listed companies.
Restrictions on foreign
investor participation exist
in certain areas, such as:
(i) communications (television,
radio stations or newspapers);
(ii) aviation (Brazilian airlines);
(iii) participation in classified
(operations) government
contracts; (iv) coastal and
freshwater shipping; (v)
mining and hydroelectric
energy, etc.
Furthermore, the direct or
indirect foreign ownership
of rural land is regulated and
subject to limitations as to the
total area. Ownership of land
near Brazils borders is subject
to further restrictions.
Currency/exchange control
The Central Bank allows the
official exchange rate to float
freely, but forex trading is
restricted to authorised dealers.
The Central Bank intervenes
when there are signs of
speculative operations. There
is an active parallel exchange
market that, although illegal, is
quoted in the daily newspapers,
as well as an official tourist rate
that normally approximates the
parallel rate.
IOF
As a general rule, foreign
exchange transactions made
in order to allow payments to
non-residents, in the form of
royalties, technical services,
14
Setting up a business
When setting up a new legal
entity in Brazil, given that
the incorporation of a branch
requires authorisation granted
via a presidential decree,
the process is generally
bureaucratic and lengthy.
In view of this, the majority
of foreign businesses in Brazil
are set up under the form of
subsidiaries based primarily
on the insulating effect that
incorporation has on the liability
of the foreign parent company
for the subsidiarys acts. When
incorporating a subsidiary
in Brazil, the most common
vehicle is the Limited Liability
Company (Sociedade Limitada
LTDA) or the Corporation.
Regulatory matters/issues
In general terms, there are no
restrictions on the ownership
by foreign investors, except for:
i.
Communications (television,
radio stations or newspapers);
ii.
iii. Participation
in classified
government contracts;
iv. Coastal
v. Mining
and hydroelectric
energy, etc.
18
Registration formalities
There are no legal minimum
share capital requirements
for a corporation, except
for financial institutions and
insurance companies, and
certain other legal entities
with specific business
purposes.
Upon the decision to incorporate
a new legal entity in Brazil,
an inaugural meeting of
prospective shareholders
must be held to approve
the bylaws, which sets up
the corporations core activities,
appoints management, and
indicates the amount of
capital, registered office
and distribution of shares
(as per the subscription list)
among shareholders (others).
Besides the requirements listed
above, a corporation is required
to have the subscription of all the
shares into which the corporate
capital stock is divided according
to the bylaws, with the initial
subscribers being at least two
individuals or legal entities that
are considered to be founders.
In addition, at least 10% of the
issuance price of the shares
subscribed in cash, unless
specific legislation requires
a higher percentage, and
deposit thereof at a bank. This
deposit is released when the
corporation has been registered
with the Board of Trade (Junta
Comercial) or after six months,
if no registration has been made.
Exchange Controls or
restrictions on repatriation
of profit
Dividends remitted to nonresident shareholders or
quotaholders are not subject
to withholding tax.
Profits may be remitted abroad
without limitations, to the extent
that there is foreign registered
capital and retained earnings
available. As from 1 January
1996, profits/dividends
distributed to non-resident
beneficiaries relating to periods
beginning on or after this date,
are not subject to withholding tax.
On 16 December 2009,
thin capitalisation rules were
introduced to the Brazilian
tax system.
The new legislation set forth
that interest paid or credited by
a Brazilian entity to a related
individual or legal entity, not
resident or domiciled in a tax
haven or a favourable tax regime
jurisdiction, can only be considered
deductible for tax purposes if
such expense is necessary for
the activities of the local entity,
and if the amount of debt granted
20
Liabilities for
Directors Company
In the most common types of
entities, LTDA and SA, executive
officers are not personally liable
for the obligations they undertake
in the name of a corporation
and in the normal course of
business. However, they are
liable for losses and damages
caused by negligent or fraudulent
conduct or by violating the law
or the corporations bylaws.
Taxation in Brazil
Corporation income tax (or equivalent)
International aspects
Foreign operations
Brazilian resident companies
are taxed on worldwide income.
Foreign branch profits are taxed
as earned and foreign subsidiary
profits are taxed when distributed
or made available. Double taxation
is avoided by means of foreign
tax credits.
Resident individuals are subject
to tax on all income from abroad
but are allowed to take credit
for the foreign tax paid thereon,
provided reciprocal treatment is
accorded to Brazilian-source
income in the country from which
the income is received.
Brazil has signed various
treaties for the avoidance
of double taxation.
Fees and other related
expenses paid in Brazil for
services rendered abroad
are subject to withholding
tax of 15%, or a lower rate
under some tax treaties.
Centre of International
Financial or Operations
There are no tax breaks
to encourage multinational
companies to locate
headquarters or administrative
offices in Brazil and/or the use
of Brazil as a base for offshore
financial operations. However,
the various Brazilian states
do offer different financial
22
Tax losses carry forward
(IRPJ and CSLL)
There is no time limit for the
carry forward of tax losses.
However, the taxable profit of
each year can only be reduced
by tax losses up to a maximum
of 30%. Furthermore, it is
neither possible to carry back
tax losses nor transfer them
to other Brazilian companies.
Tax losses of an acquired
company cannot be carried
forward to be offset against
the taxable income of a new
activity if the following two
conditions are both met:
i.
ii. modification
in the activity
of the company.
Capital gains
Capital gains earned by localresident entities are taxed
at the normal corporate rate
(34%), while capital gains of
non-residents are taxed at the
rate of 15% (unless otherwise
specified by international
tax treaties).
Individuals are taxed at the
rate of 15% on capital gains.
Payments of any type made
to tax havens are generally
subject to withholding tax
at a rate of 25%.
ii. Interest
iii.
15%*
Royalties 15%*
iv. Technical
and Admin.
Services 15%*
v.
26
28
Transfer Pricing
The rules of transfer pricing
in Brazil address imports and
exports of products, services
and rights charged between
related parties, inter-company
financing transactions not
registered at the Central Bank
of Brazil, as well as all import
and export transactions
between Brazilian residents
(individual or legal entity)
and residents in either low
tax jurisdictions (as defined
in the Brazilian legislation)
or jurisdictions with internal
legislation that call for secrecy
relating to corporate ownership,
regardless of any relation.
The rules require that a Brazilian
company substantiates its
inter-company import and export
prices on an annual basis by
comparing the
actual transfer price with a
benchmark price determined
under any one of the Brazilian
equivalents of the OECDs
comparable uncontrolled
price method (CUP method),
resale price method (RPM)
or cost plus method (CP
method). Tax payers are
required to apply the same
method, which they elect,
for each product or type
of transaction consistently
throughout the respective
financial year. However,
taxpayers are not required
to apply the same method for
different products and services.
Tax Rate
Amount to be
deducted from
tax in R$
From 1,566.62 to
2,347.85
7.5%
117.49
rom 2,347.86 to
F
3,130.51
15%
293.58
From 3,130.52 to
3,911.63
22.5%
528.37
A bove 3,911.63
27.5%
723.95
Up to 1,566.61
*Source: http://www.receita.fazenda.gov.br/Aliquotas/ContribFont2012a2015.htm
Sales tax/VAT
State Value Added
Tax (ICMS)
The Constitution of 1988
granted authority to the
Brazilian States to collect tax
on the circulation of goods and
on the supply of inter-state and
inter-municipal transportation
services on communications,
even when the transaction and
the rendering of services start
in another country.
ICMS is not a cumulative tax,
that is, the tax is only assessed
on the increase in the price of
the product in each part of the
supply chain. The calculation
process involves a system
that, in each payment period,
the taxpayer must check the
amount of debits and credits
related to the State Value
Added Tax and, if the taxpayer
has more debits than credits,
they will have to pay the tax on
the difference between them.
It is a value added tax and
is collected by most States at
the usual rate of 17%, except
for the States of So Paulo,
Minas Gerais and Paran,
where the tax rate is 18%
and Rio de Janeiro, where
the rate is 19%. Some products
trigger a higher rate (usually
25%) or a lower rate
(automotive industry and other
special industries are below
17% or 18%). Intra-states
transactions are subject to
lower rates, depending on the
State of origin and destination.
32
Other taxes
ICMS is also imposed on import
transactions. Export revenues
are tax exempt from ICMS,
however the ICMS tax credit
recorded on the acquisition of
inputs and services may be kept.
Please note that industries
located in certain States of
Brazil, such as Mato Grosso,
Gois, Bahia, among others,
may apply for State tax
incentives, which correspond
mainly to reduction of tax due,
deferral of tax due or recording
of presumed tax credits. It is
important to mention that, as
most of such incentives are
not supported by the necessary
agreements pre-approved by
all States (CONFAZ meeting),
these tax incentives may be
questioned.
Property Taxes
(IPTU and ITBI)
A property tax IPTU (Imposto
Predial e Territorial Urbano) is
levied annually based on the
fair market value of property
in urban areas at rates that
generally vary between
0.2 and 5% according to the
municipality and location of
the property. Payments can
be made in up to 10 monthly
instalments. In a few cases it
is possible to obtain exemption
from this tax.
Another property tax ITBI
(Imposto de Transmisso de
Bens Imveis Inter Vivos) is
levied at rates of up to 6% on
sales or transfers of properties
and is payable by the acquirer.
A reduced rate of 0.5% applies
to transactions under housing
programmes financed by federal
government schemes.
34
Accounting Practices
Adopted in Brazil
The Accounting Practices
Adopted in Brazil (BR GAAP)
are based on the Corporate
Law, which was updated in
2008 with Law 11.638/07.
This Law has approximated
the BR GAAP to International
Financial Reporting Standards
(IFRS), although there still are
many remaining differences.
Although the starting point for
the BR GAAP is the Corporate
Law, there were inconsistencies
in the accounting treatment
between different companies
in Brazil due to the lack of
guidance in the Law, which
is very superficial on accounting
issues. The Brazilian Stock
Exchange Securities (CVM)
and other regulators, including
the Brazilian Federal Council
of Accountants (CFC), used
to issue accounting guidance
to the entities regulated by
them. After a round of
negotiations, from 2008 this
problem tends to disappear
in view of the creation of the
Brazilian National Standard
Setter (CPC Comit de
Pronunciamentos Contbeis),
which, from now on, will be
responsible for issuing the new
Brazilian accounting standards,
which will be subject to the
endorsement from the different
regulators. Once the regulators
are part of the CPC, it is
supposed that most of the
standards, if not all,
Human Resources
and Employment Law
Labour Relations
Employment and labour
relations in Brazil are primarily
governed by the Brazilian Federal
Constitution, the Brazilian Labour
Code CLT and Collective
Labour Agreements. The CLT
imposes on the employer
a series of obligations that
protect employees, reflecting
the paternalistic philosophy
of the Brazilian Legal System.
Main Employees Rights
Remuneration
According to the Brazilian
Labour Laws, an employment
contract (written or verbal)
must state the remuneration
of the employee. The
remuneration of an employee
includes, besides base salary,
fringe benefits and bonuses,
amongst others.
36
Government Severance
Indemnity Fund for
Employees (FGTS)
For individuals considered as
employees, the company must
make a monthly deposit to
the Government Severance
Indemnity Fund for Employees
(FGTS), at an amount equal
to 8% of an employees
remuneration. In case of a
dismissal without just cause,
incited by the company, an
employee may withdraw this
fund with an additional penalty
(to be paid by the employer)
equivalent to 40% of the
accumulated FGTS balance.
The company must contribute
an additional 10% fine to the
social fund.
13th Salary
The employer must pay annually
to the employee, the 13th
salary, which is a Christmas
bonus due to employees,
regardless of their remuneration.
It corresponds to an additional
one month salary and includes
annual or semi-annual bonuses
and fringe benefits.
The payment occurs, most
commonly, in two instalments,
50% in November and 50%
in December. An anticipation
of the first instalment may be
requested when the employee
leaves for vacation.
Social Security Contribution
Companies are subject to
the following social charges,
due on the employees
monthly remuneration:
Social Security contributions,
equal to 20% (with no ceiling),
plus:
Corporate charges:
SESI, SESC, SEST
SENAI, SENAC or SENAT
INCRA
SEBRAE
Education Salary
Work accident insurance
(from 1% to 3%)
Total (maximum rate)
1.5%
1.0%
0.2%
0.6%
2.5%
3.0%
8.8%
Temporary visa V
with a labour contract
A foreign national who enters
the country holding a temporary
visa type V with a labour
contract, must have an
employment relationship
with a Brazilian company.
Temporary visa V without
a labour contract (technician)
A foreign national entering
the country without a labour
contract and consequently,
without an employment
relationship with a Brazilian
company, must be under a
technology transfer and/or
technical assistance contract.
Permanent visa
A permanent visa is granted
to foreign individuals who intend
to settle in Brazil and that
satisfy specific requirements
established by the National
Immigration Council and/or
the Labour Ministry.
Trade
Import Tax (II)
Tax Treaty
i.
ii.
iii.
iv.
38
Personal loan
(emprstimo pessoal). It is
repayable in up to 24 or 36
instalments, depending on the
bank. Competition is strong and
rates vary from bank to bank.
Banking in Brazil
All banking business is closely
monitored by banks themselves
and by the Central Bank of
Brazil (Banco Central do Brasil).
Banking rules are strictly
enforced.
40
Savings accounts
(conta poupana). Pay monthly
interest on average daily
balances for the month. This rate
is currently 0.5% over the basic
reference rate, (Taxa Referencial
TR). Interest earned on these
accounts is tax-free.
Due to a new local regulation,
deposits made on May 4th
2012 and onwards, have new
interest basis. Whenever
the Brazilians benchmark
ii. Allow
individual customers
to readily transfer their salaries
to a checking account held in a
Bank which is not the same as
the Pay Roll processor chosen
by its Employer company. The
idea is to stimulate competition
among Banks for better quality
services and lower fees.
Overdraft
(cheque especial). It is normally
done by arrangement and
subject to the proper credit
analysis by the bank. Usually,
on opening an account, the
bank may make such a credit
line available. Interest rates
on such facilities are very high.
Setting up a bank account
(individual account)
The following documents
are required to open a retail
bank account, such as:
A valid identity document.
In the case of a foreigner
resident in Brazil, this will
mean their foreigners identity
card (Cdula de Identidade
para Estrangeiro CIE)
which contains the foreign
register (Registro National
De Estrangeiro RNE).
Individual Taxpayers number
(Cadastro de Pessoa Fsica
CPF).
Proof of residency, such as a
utility bill in the name of the
person opening the account.
To obtain the CPF, it is
necessary to fill out the
application form at any Post
Office, branch of Banco do
Brasil or branch of the Caixa
Econmica Federal and
present the documentation
required (usually the original
or a certified copy of the RNE).
The applicant will receive
a counterfoil with a code
number and there is a small
fee. Thereafter, the applicant
will be notified to appear at
a unit of the Federal Revenue
Service and present their
documents and the
counterfoil in order to obtain
their definitive CPF.
HSBC in Brazil
Who are we?
HSBC Bank Brazil represents
one of the main financial groups
worldwide in our country.
Based on four pillars Stability,
Proximity, Relationships and
Know-how, the institution
follows Principles and Values
that ensure an ethical, fair and
responsible standard when
doing business, always focusing
on the client.
Services offered by HSBC
Bank Brazil include Retail,
Commercial Banking,
Corporate, and Private Banking.
Head Office
HSBC Bank Brazil has its
headquarters in Curitiba (PR).
An International Brand
In March 1997, HSBC
Bamerindus S.A. was born,
which in 1999 became HSBC
Bank Internacional Brasil
S.A. Banco Multipo. The
HSBC logo and hexagon
are used in order to adhere
to the worldwide brand.
Network in Brazil
Corporate Sustainability
Clients
Over 5.2m individual clients
and 368,932 legal
entity clients.
National Ranking
4th largest non-state-owned
bank ranked by total assets.
6th largest by branches.
6th largest by deposits.
4th position on the Central
Bank FX ranking by volume.
2nd largest International
Custodian and 4th
Domestic Custodian.
6th largest by AUM.
42
Country overview
Capital city
Brasilia
Area
Population
190,732,694*
Language
Portuguese
Currency
Real
+55
National Holidays
Good Friday
29 March
Tiradentes Day
21 April
Labour Day
1 May
Corpus Christi
30 May
Independence Day
7 September
12 October
2 November
Proclamation Republic
15 November
Christmas Day
25 December
Political structure
Federal Republic
Stock Exchange
44
Contacts
Alvaro Taiar
Tel: +55 11 3674 3628
Email: alvaro.taiar@br.pwc.com
Thierry Franois-Marsal
International Banking Centre
Phone: +55 11 3847 5450
Email: thierry.f.marsal@hsbc.com.br
3rd Edition: July 2012
Copyright
Copyright 2012. All rights reserved.
46
141TP_Brazil_100712_3
Legal Guide
for Foreign Investors
in Brazil
ISBN 85-98712-71-X
Brazil. Ministry of External Relations. Centro de Estudos das Sociedades de Advogados (CESA)
Legal Guide for Foreign Investors in Brazil / Ministry of External Relations.
Braslia: MRE: BrasilGlobalNet, 2012
308p.
1. Investments - Brazil 2, Foreign Investment - Brazil. I. Title
CDU 330.322
CREDITS
This Legal Guide for Foreign Investors was prepared by Centro de Estudos das
Sociedades de Advogados (CESA) a non-profit organization, with collaboration
from member institutions. It has been ceded for publication and dissemination
over the BrasilGlobalNet (http://www.brasilglobalnet.gov.br), through a
partnership with the Department of Trade and Investment Promotion (DPR) of
the Ministry of External Relations of Brazil.
COOPERATORS
The CESA Board of Directors would like to thank the following law firms that collaborated in the
preparation, updating and translation of each chapter of this Legal Guide for Foreign Investors in Brazil.
TABLE OF CONTENTS
1. THE BRAZILIAN LEGAL SYSTEM ............................................................................... 13
2. ECONOMIC DEVELOPMENT INSTITUTIONS................................................................ 17
2.1. Ministries....................................................................................................... 17.
2.2. Chambers of Commerce................................................................................. 25
3. FOREIGN CAPITAL.....................................................................................................
3.1. General Features.............................................................................................
3.2. Registration of Foreign Capital.........................................................................
3.3. Currency Investments.....................................................................................
3.4. Investment via Conversion of Foreign Credits..................................................
3.5. Investment via Import of Goods without Exchange Cover.................................
3.6. Capital Market Investments.............................................................................
3.7. Remittance of Profits......................................................................................
3.8. Reinvestment of Profits...................................................................................
3.9. Repatriation....................................................................................................
3.10. Transfer of Foreign Investments....................................................................
3.11. Restrictions on Remittances Abroad..............................................................
3.12. Restrictions on Foreign Investment................................................................
27
27
27
27
28
28
29
30
30
31
31
31
32
35
35
36
39
5.1.8. Consortium (Consrcio).......................................................................
5.2. Procedures for Registration.............................................................................
5.2.1. The Commercial Registry.....................................................................
5.2.2. Civil Registry of Legal Entities...............................................................
47
48
49
51
6. PUBLICLY-HELD COMPANIES.....................................................................................
6.1. General Information........................................................................................
6.2. Securities Market............................................................................................
6.3. Management .................................................................................................
6.4. Periodic Filing Requirements and Other Information.........................................
6.5. Public Tender Offer (OPA).............................................................................
6.6. Primary and Secondary Public Offerings ........................................................
6.7. Differentiated Listing on BM&FBOVESPA S.A. Bolsa de Valores,
Mercadorias e Futuros (BM&FBOVESPA).............................................................
53.
53
54
55
57
62
64
65
71
71
71
71
72
73
74
74
76
76
78
78
78
80
81
82
83
84
84
84
85
85
86
86
87
87
88
7.7. Money Laundering Law...................................................................................
7.8. Civil Remedies................................................................................................
7.8.1. Securities sold in violation of the registration and/or prospectus
requirements.................................................................................................
7.8.2. Insider Trading.....................................................................................
7.8.3. Fraudulent Brokerage Activities and Handling of Brokerage Accounts....
7.8.3.1. Excessive or Unfair Profits or Commission..............................
7.8.3.2. Operating While Insolvent or Not in Sound Financial
Condition and Other Losses Caused by Intermediaries.........................
7.8.4. Class Actions......................................................................................
7.8.5. Waiver of Rights..................................................................................
7.8.6. Procedural Requirements.....................................................................
7.8.6.1. Jurisdiction............................................................................
7.8.6.2. Venue....................................................................................
7.8.6.3. Statute of Limitations.............................................................
89
89
89
90
90
90
90
91
91
91
91
91
91
8. TAX SYSTEM.............................................................................................................. 93
8.1. General Features............................................................................................. 93.
8.2. Federal Taxes.................................................................................................. 94
8.3. State and Federal District Taxes....................................................................... 98
8.4. Municipal Taxes.............................................................................................. 98
8.5. Contributions.................................................................................................. 99
8.6. Foreign Investors......................................................................................... 101
9. ANTI-TRUST LEGISLATION....................................................................................... 105
10. LABOR LAW IN BRAZIL.......................................................................................... 111
11. FOREIGN WORKERS IN BRAZIL..............................................................................
11.1. Short-term Business and Tourist Visas........................................................
11.2. Temporary Work Visas................................................................................
11.3. Other Temporary Visas................................................................................
11.4. Permanent Employment Visa......................................................................
11.5. Registration upon Entry into Brazil...............................................................
11.6. Travel in Advance of Permanent or Temporary Employment.........................
11.7. Employment of Spouses/Offspring .............................................................
115
115
117
119
120
121
122
123
125
125
126
128
128
129
12.3.3. Acquisition of Rural Land by Foreigners..........................................
12.4. Taxation......................................................................................................
12.4.1. Inter-Vivos Transfer Tax - ITBI.........................................................
12.5. Real Estate Investment Funds.....................................................................
130
132
132
133
155
156
157
158
158
159
16. TELECOMMUNICATIONS.......................................................................................
16.1. Telecommunications in Brazil Brief Overview.........................................
16.2. Development of Mobile Telephony............................................................
16.3. The Telecommunications Regulatory Agency (ANATEL)............................
16.4. General Telecommunications Law............................................................
16.5. Telecom Service Regime.........................................................................
16.6. Transfer of Control of Telecom Companies ..............................................
16.7. Taxes on the Telecommunications Sector.................................................
16.8. Incentives................................................................................................
16.9. The Future of Telecommunications Services.............................................
163
163
165
166
167
167
170
171
173
173
17.1. Introduction.............................................................................................
17.2. Sector Agents .........................................................................................
17.3. Activities and Agents of the Sector...........................................................
17.4. Contracting in the Energy Sector..............................................................
17.5. Planning..................................................................................................
17.6. Conclusion..............................................................................................
175
177
180
183
187
187
189
189
190
191
192
194
195
199
199
200
201
202
203
205
205
205
207
207
208
209
209
210
212
212
213
214
215
216
217
219
220
235
235
237
237
242
243
243
246
247
247
249
251
253
257
257.
257
258
260
260
263
281
281
281
284
287
273
273
273
274
275
276
276
277
277
279
10
289
289
291
292
293
301
301
301
302
305
307
11
13
15
17
19
this ministry:
- ANVISA National Health
Surveillance Agency;
- ANS National Health Agency.
MINISTRY OF DEVELOPMENT,
INDUSTRY AND FOREIGN TRADE
The Ministry of Development,
Industry and Foreign Trade is in
charge of the industrial, trade
and service development policy;
intellectual property and technology
transfer; metrology; industrial quality
and standardization; foreign trade
policies, including participation in
related international negotiations;
trade defense; support to micro and
small enterprises and handicraft;
and trade registration activities. The
following entities, among others, are
linked to this ministry:
- INMETRO National Metrology
Institute;
- INPI National Industrial Property
Institute;
- BNDES National Economic
and Social Development Bank,
a federal public company with a
private law legal personality with
assets of its own that supports
undertakings contributing to
Brazils development. BNDES has
21
23
MINISTRY OF TOURISM
MINISTRY OF SPORTS
MINISTRY OF CITIES
The Ministry of Cities is in charge
of the urban development policy; of
sectoral housing policies; of basic
and environmental sanitation; of
urban transportation, traffic and
water supply systems, among other
responsibilities.
MINISTRY OF SOCIAL DEVELOPMENT
AND HUNGER COMBAT
Ministry in charge of coordinating
national social development policies;
food and nutrition security; social
assistance and citizenship income
initiatives.
25
26
3 - FOREIGN CAPITAL
3.1. General Features
Foreign capital in Brazil is governed
by Law 4.131 (the Foreign Capital
Law) of 3 September, 1962, and Law
4.390 of 29 August, 1964. Both of
these laws were put into effect by
Decree 55.762 of 17 February, 1965
and subsequent amendments.
According to the Foreign Capital Law,
foreign capital is considered to be
any goods, machinery or equipment
that enters Brazil with no initial
foreign exchange disbursement,
intended for production of goods
and services, and any funds brought
into the country for use in economic
activities, provided that they belong
to individuals or corporate entities
domiciled or incorporated abroad.
3.2. Registration of Foreign Capital
Foreign capital must be registered
by means of an Electronic Statement
of Registration Foreign Direct
Investment Module (RDE-IED), on
the Central Bank Information System
(SISBACEN).
For the purposes of the Electronic
Statement of Registration, foreign
27
28
29
31
32
33
4.1. FX Control
Exchange control in Brazil is closely
linked to the regulation of foreign
capital flows. Historically, such
regulation has imposed barriers on
the outflow of funds to protect the
Brazilian currency. In the 1930s,
following sharp reductions in
the price of basics products that
accounted for a high percentage of
Brazilian exports, Brazilian authorities
issued the first rules designed to
structure an exchange market in
Brazil.
For this purpose, rules were issued
to establish the obligation that funds
from Brazilian exports should be
brought back to the country, such
as Decree n. 23,258/33, which
has been revoked, and the Brazilian
government began to apply strict
controls on exporters to avoid funds
from exports from being kept abroad.
Such exchange controls were
justified because, back then, funds
from exports constituted the main
source of funds to ensure equilibrium
in the Brazilian balance of payments.
It was only in the 1960s that the
Calendrio Brasileiro de Exposies e Feiras 2012
35
37
39
41
42
43
45
46
47
48
49
51
6 - PUBLICLY-HELD COMPANIES
6.1 General Information
Law 6,404/76 (also known as the
Brazilian Corporations Act) makes
a distinction between closed
and open companies. Open (or
publicly-held) companies must
necessarily take the form of a
corporation and their securities are
admitted for trading on the securities
market, allowing them to raise funds
from the public.
Because publicly-held companies
are permitted to raise funds through
public offerings of their securities,
they are subject to a series of
specific obligations imposed by law
and by regulations issued principally
by the Brazilian Securities and
Exchange Commission (Commisso
de Valores Mobilirios the CVM).
The CVM, which was created by Law
6,385/86, is a federal agency linked
to the Treasury. The purpose of the
CVM is to regulate, develop, control
and supervise securities markets
in Brazil. As a result of changes
introduced by Law 10,303/01, the
CVMs jurisdiction was enlarged
to include the Commodities and
Futures Markets, the organized over-
53
55
57
58
59
61
63
64
65
67
69
71
72
Commissioners (IOSCO), of
the Iberian American Institute
for Securities Markets (Instituto
Iberoamericano de Mercado de
Capitais, or IIMV) and of the
Southern Common Market Mercosur (Mercado Comum do Sul
Mercosul).
CVM has also entered into
memoranda of understanding
for sharing information and legal
assistance with securities regulators
in the following countries: United
States (the U.S. Securities and
Exchange Commission and
Commodity Futures Trading
Commission), Argentina, Australia,
Bolivia, Canada/Quebec, Cayman
Islands, Chile, China, Equator,
France, Germany, Greece, Hong
Kong, Israel, Italy, Luxembourg,
Malaysia, Mexico, Paraguay,
Peru, Portugal, Romania, Russia,
Singapore, South Africa, Spain,
Thailand and Taiwan.
7.2.3. The Central Bank
Pursuant to Law No. 4,595 of
December 31, 1964, as amended,
the Central Bank is responsible
for implementing CMNs policies
Calendrio Brasileiro de Exposies e Feiras 2012
73
75
76
of underwriting syndicates
(underwriters) are also responsible
for the contents of prospectuses and
Brazilian 10-K-like forms (formulrios
de referncia). They are also
required to conduct independent
due diligence to verify all material
information concerning the issuers
business, properties and financial
status, relevant securities and other
material facts that may have a
bearing on an investors decision
with regard to offered or requested
investment funding.
The ANBIMA Code also
establishes comprehensive rules
for the minimum content of the
prospectuses and Brazilian 10-K-like
forms (formulrios de referncia),
namely: (1) information concerning
risk factors, with no mitigations,
(2) description of the issuers
main sector-related aspects,
(3) description of the issuers
business and corporate governance,
environmental protection and
social responsibility policies, (4)
managements discussion and
analysis of the issuers financial
condition and results of operations
carried out in the three previous
fiscal years, (5) information about
Calendrio Brasileiro de Exposies e Feiras 2012
77
79
81
publicly-held company.
Implementation of a DR program
requires the appointment of a
depositary the foreign institution
that will issue the DRs abroad based
on the shares under custody in its
name in Brazil - and of a Brazilian
custodian, which will custody the
shares backed by the DRs.
The DR program can be sponsored
or not by a Brazilian publicly-held
corporation. The establishment and
operation of a DR program requires
prior approval from CVM and the
Central Bank. Registration with CVM
is intended to ensure the same level
of disclosure between the holders
of DRs and the holders of their
underlying shares. Registration with
the Central Bank is required to ensure
the transfer of funds from and to
Brazil.
After the DR program is registered
with CVM and the Central Bank,
shares held by Brazilians or
foreigners can be deposited with the
custodian at any time for issuance
of the corresponding DRs abroad. To
sell the investment, foreign investors
can sell the DRs abroad or request
83
85
87
89
91
8 - TAX SYSTEM
8.1. General Features
8.1.1. The Brazilian Federal
Constitution, promulgated on October
5, 1988, confers powers to the
Union, the States, and Municipalities
to levy taxation.
8.1.2. Taxation in Brazil may take the
form of taxes, fees, betterment fees,
other contributions, and compulsory
loans. Taxes may be levied by
the three levels of government,
according to their specific
competence, as provided for in the
Constitution.
8.1.3. Fees collected at the three
levels of government are used
to fund services such as law
enforcement and to finance the
actual or potential use of other
specific and divisible public services
provided or made available to
taxpayers.
8.1.4. Betterment fees, which
are still not very much used, are
collected from owners of real
estate for improvements to their
assets resulting from public civil
construction projects.
93
95
97
99
9 - ANTI-TRUST LEGISLATION
Law 4,137 of September 10, 1962
introduced antitrust legislation
largely based on the U.S. regulatory
model. However, it can be said that
owing to lack of interest on the
part of the Government and of the
authorities responsible for instituting
and enforcing the law, for almost
30 years Brazils antitrust system
remained virtually inoperative.
Since the 1990s, however, with the
passage of Law 8,002 and Law
8,158, new impetus was given
to combating crimes against the
economic order, to protecting free
competition, and to defending
consumers rights. This renewed
interest in ensuring fair market
conditions led to the passage of
Law 8,884 of June 11, 1994, which
brought Brazils antitrust legislation
into force.
The Administrative Council for
Economic Defense (CADE),
established in 1962, became an
independent government agency
linked to the Ministry of Justice and
was granted broad administrative
enforcement powers under Law
9,884 to protect the public and
111
1) minimum wage;
Transit visa
Tourist visa
Temporary visa
Permanent visa
Courtesy visa
Official visa
Diplomatic visa
13 - ENVIRONMENTAL LAW
13.1. Law:
The Brazilian environmental LAW
is one of the most advanced in the
world. The Federal Constitution
devotes Chapter VI to this matter,
providing that all Brazilians have the
right to an ecologically balanced
environment for general and
integral use and that the Brazilian
Government and society have the
duty to protect and conserve it.
The states and municipalities are
also competent to legislate on
environmental matters. The federal
legislator lent a regional character
to this subject in the Federal
Constitution.
The Federal Government, however,
has exclusive authority to legislate
on matters related to water, energy,
mining, biotechnology, and nuclear
activities.
According to the Federal Constitution,
it is the duty of the State to:
Preserve and recover species
and ecosystems;
Care for the variety and integrity
13.4. Definitions:
(a) Environmental Damage:
Damage to environmental resources
and its resulting degradation, adverse
alteration or harm to the ecological
balance.
(b) Environmental Impact Study
and Report (EIA/RIMA): A study
and respective report designed
to evaluate changes in the
physical, chemical and biological
characteristics of the environment
caused by any form of matter
or energy resulting from human
activities that could directly or
indirectly affect the health, welfare
and safety of the population.
(c) Pollution: Degradation in
environmental quality resulting
from activities that directly or
indirectly affect the health, welfare
and safety of the population. Any
activity that can potentially pollute
the environment or which use
environmental resources must be
registered with the Federal Technical
Registry managed by IBAMA.
(d) Environmental Protection Area
(APA): Usually a large area sparsely
Calendrio Brasileiro de Exposies e Feiras 2012 137
7. Suspension or cancelation of
registration;
8. Denial of license, permit or
authorization for irregular
companies;
9. Loss, restriction or suspension
of tax incentives and benefits, as
well as of financing from official
credit institutions; and
10. Prohibition to enter into contracts
with the Public Administration for
a period of 3 years.
c) Penal sanctions:
Conduct and activities that are
harmful to the environment subject
violators, whether individuals
or companies (with personal
involvement of the partners,
administrators, directors, council
members, agents, proxies,
managers or auditors) to criminal
and administrative sanctions, in
addition to the obligation to provide
compensation for the damage
caused.
Contractors are advised to specify
the civil liability for material damages
in their contracts with subcontracted
companies, so as to hold them liable
exclusively on efficiency.
Partnerships, on the other hand,
cannot operate on a free enterprise
model, since the private partner is
(either partially or fully) remunerated
by the State, and therefore enjoys a
higher degree of security.
15.1. The National Privatization
Program (PND)
Brazils National Privatization
Program was established by Law n.
8,031 of April 12, 1990, as regulated
by Law n. 9,491 of September 9,
1997 and its respective Decree n.
2,594 of May 15, 1998. This is the
legal basis for the sale of companies,
including financial institutions,
directly or indirectly controlled by
the Federal Government, as well as
for the transfer, to private initiative,
of public services provided by the
Federal Government either directly or
through its controlled entities.
The National Privatization
Board (Conselho Nacional de
Desestatizao CND), whose
members are Ministers of State,
reports directly to the President
of the Republic and is the body in
charge of conducting the privatization
process.
156 Calendrio Brasileiro de Exposies e Feiras 2012
16 - TELECOMMUNICATIONS
16.1. Telecommunications in Brazil
Brief Overview
For over 35 years, Law 4.117/62
of August 27, 1962, known as
the Brazilian Telecommunication
Code (Cdigo Brasileiro de
Telecomunicaes CBT), governed
the provision of telecommunications
services in Brazil. This law
authorized the establsihment of
the Brazilian Telecommunications
Company (Empresa Brasileira de
Telecomunicaes S.A.-EMBRATEL).
Law 5792 of July 11, 1972
authorized the creation of the
public/private joint stock company
TELEBRAS (Telecomunicaes
Brasileiras S.A)to promote,
through subsidiaries and
associate companies, public
telecommunications services in
Brazil and abroad. TELEBRS,
its subsidiaries and associate
companies comprised the TELEBRS
System, which ultimately also
incorporated EMBRATEL.
Liberalization of the Brazilian
telecommunications market
started with the promulgation
of Constitutional Amendment
08/95 of August 15, 1995, which
enabled the Federal Government
to transfer the right to provide
telecommunications services to
privately owned companies by
means of authorization, concession
or permission.
Shortly thereafter, Law 9265/96 of
July 19, 1996 (the Minimum Law)
fully deregulated and liberalized the
provision of value-added services,
relaxed requirements for the
provision of satellite communication
and non-public telecommunications
services, and defined the process for
the tendering and licensing of B-Band
mobile cellular services.
In 1997, Law 9472/97 of July
16, 1997, known as the General
Telecommunications Law (Lei
Geral de Telecomunicaes
-LGT), created the Brazilian
National Telecommunications
Agency (Agncia Nacional de
Telecomunicaes ANATEL)
and established the criteria for the
privatization of state telephone
companies as well as other rules
concerning liberalization and
Calendrio Brasileiro de Exposies e Feiras 2012 163
competition in telecommunications
markets.
The General Telecommunications
Law determined that networks be
organized to promote free circulation
along integrated routes, and provided
for mandatory interconnection
between all networks and support
services of collective interest.
Furthermore, it guaranteed integrated
operation and made property rights
over the networks conditional on the
fulfillment of their respective social
role. In this respect, interconnection
is a major instrument for ensuring
convergence.
The General Telecommunications
Law also provided a legal
definition of value added services,
clearly stating that these are not
telecommunications services, and
classifying providers of value added
services as users of the underlying
telecommunications service or
network.
Therefore, except for data
transmission services, general
internet services are outside
ANATELs jurisdiction, and may
be provided without regulatory
constraints.
164 Calendrio Brasileiro de Exposies e Feiras 2012
telecommunications services or
network is conditional on prior
licensing by ANATEL, except in
certain specific situations, when
mere notification to ANATEL will
suffice. Licenses are also granted
according to different service levels,
as defined by ANATEL.
Thus, exploitation of
telecommunications services is
conditional on (i) prior concession or
permission; (ii) authorization; or (iii)
notification to ANATEL.
The General Telecommunications
Law classifies services under
two different criteria. The first
criterion relates to the scope of the
commercial provision of services
classified as (i) services of collective
interest; and (ii) services of restricted
interest.
Services of collective interest are
those which must be available to
all interested persons under nondiscriminatory conditions. Services
of restricted interest, in turn, are
those intended for service providers
or offered to selected classes of
users at the operating companys
discretion.
168 Calendrio Brasileiro de Exposies e Feiras 2012
supervision of telecommunications
services. All concessionaires
and authorized companies are
liable for an Installation Inspection
Fee (Taxa de Fiscalizao de
InstalaoTFI) upon licensing of
their telecommunications stations.
The TFI fee is determined based on
a table prepared by ANATEL, and
varies according to the number of
antennas and equipment in use.
These companies are also liable for
the annual payment of an Operation
Inspection Fee (Taxa de Fiscalizao
de Funcionamento TFF), which is
calculated at on the basis of 50% the
TFI fee.
Law 10052 of November 28,
2000 established the Fund for
Technological Development of
Telecommunications (Fundo para o
Desenvolvimento Tecnolgico das
Telecomunicaes -FUNTTEL),which
received an endowment of R$100
million from the Telecommunications
Supervision Fund (FISTEL). FUNTTEL
receives 0.5% of gross revenues
from telecommunications services
plus 1% of income generated form
telephony based events by authorized
institutions. The aim of FUNTTEL
is to fund technological research
servicesvis--visthe scope of
theconstitutional restrictionon
foreign capitalapplicable
tobroadcasters has led to a
heated debate, especiallyfollowing
the inclusion in newly
renovatedconcession contracts
ofaclause (in force since
January 1st, 2006), according
to which content-related
servicesshouldcomply with foreign
capitalrestrictions provided forin the
Constitutionfor broadcasting.
A bill on the powers of Brazilian
regulatory agencies currently under
discussion at the National Congress
may significantly alter the status
of ANATEL, its powers to grant
telecommunications licenses, and
its role of controlling and preventing
violations of the economic order and
ensuring fair competition.
17 - ELETRIC ENERGY
17.1. Introduction
11
International Treaty.
Distribution
Distribution is a public utility service
for the transport of low-voltage
electric power by means of a multilined network, from transmission-line
terminals (where high voltage is
transformed into low voltage) to end
consumers.
Distribution service concession
contracts ensure distributors a
constant supply of power to meet
the needs of captive consumers
located in their concession areas.
These so-called captive consumers
are not allowed to purchase electric
power from another supplier. Free
consumers, on the other hand,
depending upon their consumption
and voltage requirements (at
present, those whose requirements
are in excess of 69 KV and higher
than or equal to 3 MW), although
located in a concession area of a
given distributor, may choose to
receive their electric power from
another supplier, by means of a
specific contract. In such cases, the
distributor is obliged to provide free
access to its distribution facilities,
Underthepresent model,
concessions and authorizations
for the expansion of generation
areawarded through auctionscarried
out by the Ministry if Mines and
Energy (except forsmall facilities).In
these auctions the full sale (or almost
all of it) of the energy to be produced
is ensured.
model),wasthe guaranteeof
free access to transmissionand
distribution lines by industry players
and the regulation of this access.
17.5. Planning
Planning and control activities are
central to the present model, and
the EPE will conduct studies and
research that will serve as input
for the development, planning, and
implementation of the Ministrys
actions within the scope of the
national energy policy.
The Ministry will prepare a list of the
new ventures that may be put up
for tender and approve the amount
of electricity to be contracted for
meeting the needs of the Brazilian
market, as well as the list of new
generation ventures to be tendered.
For their part, it is incumbent
upon generation and distribution
companies, traders, and free
consumers to inform the Ministry
of the amount of energy required to
meet the needs of their respective
markets or loads.
17.6. Conclusion
The current framework was
designed by the Government as the
best institutional arrangement for
achieving the following objectives:
(i)lower tariffs; (ii) increased
quality of services; (iii) guarantee of
continuous supply; (iv)fair return
on investment, so as to encourage
the expansion of services; and
(v)universal access.
With public funding in short supply,
attracting private investment to
the Brazilian electricity sector to
ensure the countrys economic and
social development will be a major
challenge for the present model.
20
Graziosi, Andrea, Premesse ad una teoria probatoria del documento informtico, in Rivista Trimestrale di
Diritto e Procedura Civile, Anno LII, n. 2, jun/98, Milano,
Giuffr, p. 487.
21
Graziosi, Andrea, op. cit., p. 491.
19.8.5. Conclusions
20 - INFORMATION TECHNOLOGY
20.1. Information Technology in
Brazil
The traditional configuration of
hardware and software is no longer
sufficient to define the industry. The
concept of information technology
(IT) includes, in addition to hardware
and software elements, networks,
multimedia and specialized labor.
For purposes of this Section, the
expression information technology
- IT will encompass all these
meanings.
From a technical standpoint,
hardware comprises the physical
elements of the computer, while
software comprises the logical
ones. Under Brazilian Law, software
is protected by Law 9609/1998,
the Software Law, and may be
protected by Law 9279/1996, the
Industrial Property Law, or by Law
11484/2007, which provides for
the protection of original layoutdesigns of integrated circuits,
when such hardware or integrated
circuit topography meets the legal
requirements to be protected.
40
For purposes of Law 11484/2007, integrated circuit
means a product in final or intermediate form, of which
at least one element is active and with some or all of
the interconnections on a fully formed piece of material
or in its interior and whose purpose is to perform an
electronic function. The topography of integrated circuits
is defined as a series of related images, built or coded in
any form or manner, representing the three-dimensional
configuration of the layers of an integrated circuit, and
in which each image represents, fully or in part, the
geometric arrangement or arrangements of the surface
of the integrated circuit at any stage of its design or
manufacturing.
41
The date when the application was filed with INPI.
Period
80%
75%
70%
SUDAM Superintendncia de
Desenvolvimento da Amaznia),
Northeast region (subjected to
SUDENE Superintendncia de
Desenvolvimento do Nordeste)
and Central-West region43 is the
following:
IPI
Reduction
95%
90%
85%
Period
From January 1st 2004
through December 31st 2014
From January 1st 2015
through December 31st 2015
From January 1st 2016
through December 31st 2019
43
Investment Amount
Beneficiaries
no less than 1%
FNDCT.
Nevertheless, it is important to
notice that if the parties distribution
relationship is linked to products
considered as Automotive Vehicles
under Law 6729, these parties are
forbidden to regulate their contract
by any Law other than this one,
being null and void any provisions in
contrary.
The specific aspects of these types
of contract are described below.
21.1. Commercial Representation
(AGENCY)
Law 8420 of May 8, 1992 governs
Commercial Representation in
Brazil. Under this law, Commercial
Representation is defined as an
intermediation activity performed on
a permanent basis by any person
or company45 contracted to operate
in the market for goods or services
on the behalf of a company or of
several companies.46 Nevertheless,
45
Referred to in Brazilian Law as Representante
Comercial (Commercial Representative) or Agente
(Agent)
46
Representation of just one company would depend on
whether an exclusivity provision exists in the contract
signed by the parties.
23 - INTERNATIONAL TREATIES
23.1. Overview
Treaties are international agreements
concluded between States in written
form and governed by international
law, whether embodied in a single
instrument or in two or more related
instruments Treaties may be entered
into by States, between States
and international organizations, or
between international organizations
themselves, provided the parties are
represented by qualified agents, and
seek to regulate legal relations that
are freely entered into, for legal and
feasible purposes, to assure that
contracting parties fulfill and respect
the provisions contained therein.
Under the rule of International
Law, treaties are negotiated and
concluded, so that the contracting
parties are bound to fulfill and
enforce their provisions.
23.4. Taxes
In the field of tax-related international
trade issues, Brazil has signed,
ratified and incorporated into its
domestic legislation a variety
of international double-taxation
agreements with such countries
as: Argentina (1982); Austria
(1976); Belgium (1973); Canada
(1986); Chile (2003); China (1993);
Germany (2006); Israel (2005);
Mexico (2006); South Korea (1991);
Denmark (1974); Ecuador (1988);
Spain (1976); Finland (1998); Peru
(2009); the Philippines (1991);
France (1972); Hungary (1991);
India (1992); Italy (1981); Japan
(1967 and 1978); Luxembourg
(1980); Norway (1981); Portugal
(2001); the Netherlands (1991);
South Africa (2006); Sweden (1976
and 1996); Slovakia; the Czech
Republic (1991); and Ukraine
(2006).
Brazil has also signed international
income-tax exemption treaties for
maritime and air transport companies
with the following countries: South
Africa, Chile, France, Italy, England,
Ireland, Switzerland, and Venezuela.
Under these double-taxation
agreements, Brazil overrides the
260 Calendrio Brasileiro de Exposies e Feiras 2012
24.4. Evidence
The entire proceeding, and
specifically the production of
evidence, is conducted by the
presiding judge. In principle,
documentary evidence should be
presented to the court together
with the complaint. Likewise,
the defendant should present
24.7. Appeals
25 - DUMPING IN BRAZIL
25.1. Introduction
Burgeoning globalization has
increasingly resulted in recourse
to antidumping measures in recent
years, as national companies
demand protection for their domestic
markets. Leaving aside the economic
implications of dumping and
antidumping, this text addresses
the issue from the perspective of
current Brazilian laws and regulations
(notably Law 9019 and Decree
1602 of August 23, 1995), and the
provisions of Article VI of the General
Agreement on Tariffs and Trade
(GATT).
With respect to the legal concept
of dumping and its core elements,
it is important to underscore that
antidumping rules may be used by
companies to mitigate or counteract
the effects of dumping; however,
duties imposed must never exceed
the calculated dumping margin.
Since some confusion exists with
regard to dumping vis--vis other
forms of protection of the economy
such as subsidies and countervailing
measures, it is necessary to
distinguish between them.
67
Any petition supported by producers whose aggregate
production volume represents over 50% of the domestic
production of a similar product will be deemed to have
been filed by the national industry or on its behalf.
These elements are critical to the commencement of an
investigation.
68
Interested parties are: (i)
any association representing
any association representing
any association representing
countrys Government.
consumer relationship.
Supplier/ Manufacturer: every
individual or corporation, public or
private entity, national or foreign,
as well as other entities that
develop activities of production,
assembly, creation, construction,
transformation, import, export,
distribution or trade of products,
commodities, or service provision.
As explained, the idea is the broadest
possible so as to encompass all
possibilities of service or product
supply.
It is important to add that Supplier
is a genus of which producers,
assemblers, creators, manufacturers,
builders, transforms, importers,
exporters, distributors, traders or
service providers are species. When
the Consumer Code uses the word
Supplier, it refers to all the species.
On the other hand, when it refers
to a specific species, all others are
excluded.
Product/ Commodity: any asset,
whether fixed or not, material or
immaterial.
Service: any activity supplied in the
27 - ARBITRATION AND UPHOLDING OF FOREIGN COURT RULINGS AND ARBITRATION AWARDS IN BRAZIL
27.1. Purpose and Applicable Rules
V. Commencement of arbitration
proceedings must have been in
accordance with the arbitration
agreement;
VI. The arbitration award must be
binding upon the parties, or its
effects must not have been annulled
or suspended by a court in the
jurisdiction in which it was issued;
VII. Under Brazilian law, the matters
submitted to arbitration must be
eligible for arbitration;
VIII. The arbitration award must not
run contrary to the Brazilian public
70
Resp 804306/SP, 3 T., Rapporteur Justice Nancy
Andrighi, DJ 3/9/08; Resp 498835/SP, 3 T., Rapporteur
Justice Nancy Andrighi, DJ 29/5/05; Resp 251438/RJ,
4 T., Rapporteur Justice Barros Monteiro, DJ 8/8/00.
71
REsp 1177915/RJ, 3 T., Rapporteur Justice Vasco
Della Giustina, DJ 13/4/10; Resp 242383/SP, 3 T.,
Rapporteur Justice Humberto Gomes de Barros, DJ
21/3/05; Resp 505208/AM, 3 T., Rapporteur Justice
Carlos Alberto Menezes Direito, DJ 13/10/03.
General
2010 FIFA
Issue #9
March 2014
CONTENT
CHAPTER
PAGE
Section 1
Section 2
Official Marks
Section 3
Section 4
20
Section 5
Contact Information
22
Annex 1
23
Annex 2
Media Information
26
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
SECTION 1
PURPOSE OF THESE PUBLIC GUIDELINES
THE 2014 FIFA WORLD CUP
SUPPORT BY FIFA
RIGHTS HOLDERS
WHY IS IT IMPORTANT TO
PROTECT THE EXCLUSIVITY
OF THE FIFA RIGHTS
HOLDERS?
Any unauthorised use of the Official Marks not only undermines the
integrity of the FIFA World Cup and its marketing programme, but
also puts the interests of the worldwide football community at stake.
The FIFA Rights Holders will only invest in the 2014 FIFA World Cup
if they are provided with this exclusivity for the use of the Official
Marks. If anyone could use the Official Marks for free and create
an association with the 2014 FIFA World Cup, there would be no
reason to become a Rights Holder. This would mean that FIFA and
the LOC could not appoint any Rights Holders and could not secure
the funding for the 2014 FIFA World Cup from such revenues.
Therefore, the protection of the exclusive rights is crucial for the
funding for the 2014 FIFA World Cup Brazil and FIFA asks that nonaffiliated entities respect FIFAs intellectual property and conduct
their activities without commercially associating with the 2014 FIFA
World Cup.
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
GENERAL INFORMATION
AND GUIDANCE
THIRD PARTIES
HOW TO BENEFIT WITHOUT
ASSOCIATION?
MEDIA
The news media are welcome to use the Official Marks for legitimate
editorial and information purposes, provided that such use does
not create any undue association between the tournament and any
entities other than FIFAs commercial affiliates. This is addressed in
Annex 2.
TERRITORY
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
SECTION 2
OFFICIAL MARKS
OFFICIAL MARKS
OFFICIAL EMBLEM
FIFA owns rights in the individual graphic and word elements, which
combine to make up the Official Emblem as a whole, and these are
protected by copyright, trade marks and/or other laws of intellectual
property. The Official Emblem is the main logo used as reference to
the 2014 FIFA World Cup.
OFFICIAL MASCOT
OFFICIAL SLOGAN
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
OFFICIAL POSTER
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
PROTECTED TERMS
FIFA.COM LOGO
PROTECTION
The Official Marks are protected in Brazil and territories around the
world by trade mark registration and/or copyright laws and/or other
laws of intellectual property such as unfair competition or passing
off. Such laws collectively protect FIFA against the unauthorised
use of both identical reproductions of the Official Marks and also
confusingly similar variations and modications.
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
SECTION 3
EXAMPLES OF USE (DOS AND DONTS)
GENERAL PRINCIPLE
In order to provide some guidance to the general public, the below section sets out FIFAs position
concerning some common examples of unauthorised commercial association with the 2014 FIFA
World Cup (Unauthorised Association) and some examples of activities which can be considered
legitimate.
This section intends to assist third parties who wish to avoid any unauthorised association with the
tournament. Clearly it is not possible to set out all different situations, or comment on the different legal
sanctions that may apply in each country. In these examples, references to the Official Marks include
similar variations of such Official Marks (see Section 2 above).
FOOTBALL
IN
BRAZIL
ADVERTISEMENTS/PROMOTIONS
General advertisement: an advertisement using
general football terms/imagery may NOT create
an Unauthorised Association.
SAMPLE
LTD
LE
SAMP
LTD
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
ADVERTISEMENTS/PROMOTIONS
WIN TICKETS
FIF
A
W
o
Te men
am s Wo
r
A ld Cu
W
- T p Ch
or
ld
EA ina 2
Cu
-G
p
RE
St
M 007
ad
Ro EN
io
SE
w
B
n
:
C
BE
Tic
do ke
no t co
t fo nt
ld ain
or s a
pu ch
nc ip
tu - ple
re.
as
e
FI
FI FA
FA
FI
FA
Blo
Tr
ib
un
ck
:3
32
44
12
25
10
90
00
92
00
-2
TO
Se
03
60
FIF
A
39
00
16
iJIN
at
-E
:1
Ju
ne
as
ts
20
07
id
-- -----
EN
YE
RE
--
--
--
--
LL
OW
--
--
05
09 .0
39 :1 5.07
.2 2h
/2 rs
6/
6
- --
--
In
tran clud
sp es
or free
t (2
nd use
clas of
s) all lo
on ca
m l pu
at
ch bl
da ic
y.
--
--
--
--
GRE
BL
UE
.x
xx
- ---
ro
--
P
Ca rice
t. : E
1 u
SAMPLE
LTD
TICKETS
SAMPLE
LTD
201
u
rld c
o
W
4
IN
ND W
A
Y
PLA
LE
SAMP
LTD
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
INFORMATIONAL/EDITORIAL USE
Editorial use: any legitimate editorial, noncommercial use does NOT create an Unauthorised
Association.
NEWSPAPER
PE
SPA
NEW
SEN
PRE
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
E LT
MPL
Y SA
ED B
10
MATCH SCHEDULE
Please note: The match schedule of the 2014 FIFA World Cup is protected by copyright and other IP
rights in many countries around the world. News media companies are allowed to publish the match
schedule to inform the public about the 2014 FIFA World Cup, but it must be ensured that the match
schedule is not published with any unauthorised commercial branding upon, next to, or in relation to
the match schedule.
Non - commercial use: The editorial, noncommercial use of the match schedule by the
news media does NOT create an Unauthorised
Association.
MATCH
SCHEDULE
2014 FIFA
WORLD CUP
BRAZIL
D BY
SAMPLE
LTD
MATCH SCHEDULE
PRESENTED BY
SAMPLE
LTD
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
11
COMPANY/BUSINESS NAMES
General terms: A general football-related OR
Brazil-related business name may NOT create an
Unauthorised Association (provided it is not used
together with FIFA World Cup indicia, imagery
or reference, or the name )
FOOTBALL
WORLD SOCCER
LTD
N
DATIO
MMO
O
C
C
E
A
GUID
TION
MODA
ACCO IDE
GU
2014
BRAZIL DE LTD
GUI
HOTEL
4
IL 201
BRAZ UIDE LTD
LG
HOTE
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
12
MERCHANDISE
General football terms: Merchandising items with
general football terms OR Brazil-related terms OR
national ags do NOT create an infringement of
FIFAs rights (provided it is not used together with
FIFA World Cup indicia, imagery or reference,
or the name).
BRAZIL
2014
BRAZIL
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
13
2014
WORLD
2014
IL
CUP
BRAZ
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
14
INTERNET/MOBILE
Legitimate domain names/URLs: The use of
an Official Mark in an URL can be considered
legitimate and descriptive use if it comes after
the domain name.
SAMPLE
LTD
www.travel-company.com/
worldcuptravelinfo.htm
SAMPLE
LTD
www.worldcup.travel.company.com
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
15
INTERNET/MOBILE
Commercial use: Official Marks may not be used
together with, or in proximity to, a company logo
or commercial reference (such as Brought to you
by or Sponsored by , etc. or used on a standalone basis, in a xed position or in a recurring way
on a website including mobile optimised websites
or applications, particularly repetitive use of the
Marks in the corner of a special edition or on each
successive web page of a special subsection of a
website).
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
SAMPLE
LTD
FIFA WORLD CUP NEWS
2014 FIFA WORLD CUP
SAMPLE
LTD
16
INTERNET/MOBILE
MMS/SMS/other mobile services: FIFAs official
logos, symbols and other graphic trade marks
may not be used in SMS, MMS or similar mobile
services. FIFAs Protected Terms (e.g. the event
titles) may not be used in such mobile services to
create the impression that a service is officially
associated with the 2014 FIFA World Cup.
LD
CU
OR
A
FIF
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
SAMPLE
LTD
17
SOCIAL MEDIA
FIFAs official logos, symbols and other graphic
trade marks may not be used on any social media
platform. FIFAs Protected Terms (e.g. the event
titles) may not be used to create the impression
that a page is officially related to the 2014 FIFA
World Cup.
SOCIAL
NETWORK
FIFA WORLD CUP NEWSMY PROFILE
PUBLIC VIEWING
CITY
Y ABCD
ABCD
SAMPLE
LTD
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
18
PLEASE NOTE
The examples in this section are given for illustrative purposes only.
If FIFA writes to you to explain that a certain activity which you
thought was in compliance with these Public Guidelines does in fact
create an unauthorised association, we ask you to please respect
FIFAs rights in the Official Marks.
These guidelines are not to be used by companies who deliberately
intend to ambush FIFAs marketing rights as a tool to carefully avoid
legal liability. The above scenarios are articially simplistic in order
to provide practical assistance to companies who have an honest
intention to avoid unfairly associating with the 2014 FIFA World
Cup. Past experience has shown that companies who try to use
these guidelines as a defence to an act of unfair association or
infringement are unsuccessful.
We hope you appreciate that it is not possible to illustrate every
possible scenario of acceptable use compared with unauthorised
association and we trust that you will cooperate with FIFAs requests.
For this reason, all of FIFAs rights are explicitly reserved.
These Public Guidelines only address rights owned by FIFA and do
not contain or indicate any statement with respect to any rights, or
relates in any manner in relation to, any rights held by any third party,
such as players, clubs, member associations, confederations or other
entities and organisations.
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
19
SECTION 4
GENERAL BENEFITS (HOW TO GET INVOLVED)
GENERAL PRINCIPLE
SERVICE PROVIDER
HOSPITALITY PACKAGE
PRODUCT LICENCE
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
20
GENERAL FOOTBALL
PROMOTIONS
SUPPORT GRASS
ROOTS FOOTBALL
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
21
SECTION 5
CONTACT INFORMATION
FIFA
LOCAL ORGANISING
COMMITTEE
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
22
ANNEX 1
GENERAL INFORMATION
The next FIFA World Cup is due to be held in Brazil in June and
July 2014 (the 2014 FIFA World Cup).
Fdration Internationale de Football Association (FIFA) is the
world governing body of association football. FIFA has appointed
the Brazilian Football Association, one of its member associations,
with the organisation and staging of the 2014 FIFA World Cup and
for this purpose the Brazilian Football Association has created the
Local Organising Committee (LOC).
FIFA is the owner of all rights in relation to the 2014 FIFA World
Cup, which includes all media, marketing, hospitality, licensing and
ticketing rights.
The FIFA World Cup is the worlds largest single sporting event
but it is still a privately funded event. It would not be possible to
cover the huge costs needed to organise such an event without the
signicant nancial contributions provided by the entities to which
FIFA grants certain 2014 FIFA World Cup-related rights (Rights
Holders).
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
23
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
24
LICENSEES
FIFA Licensees are such entities to which FIFA has granted or will grant
the right to use the Official Marks on items of merchandise. If you are
interested in becoming a Licensee, please apply via the form on FIFA.com:
www.fifa.com/aboutfifa/organisation/marketing/licensing.html.
Media Rights Licensees are such entities to which FIFA has granted
or will grant the right to broadcast and/or transmit a feed of any
match of the 2014 FIFA World Cup.
Further details on the FIFA Rights Holders are available on
www.FIFA.com.
HOSPITALITY
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
25
ANNEX 2
FIFA MEDIA INFORMATION
USE OF THE OFFICIAL MARKS OF THE 2014 FIFA WORLD
CUP BRAZIL
INTRODUCTION
The news media may use the Official Marks in editorial coverage
of the 2014 FIFA World Cup in compliance with the following
principles:
EDITORIAL USE
NO PROMOTIONAL/
ADVERTISING USE
The news media are welcome to use FIFAs match schedule as part
of its news reporting of the tournament but care should be taken
to avoid creating any Unauthorised Association with third parties
that are not Rights Holders for the tournament (e.g. by advertising
of commercial sponsorship of or near the feature).
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
26
GRAPHIC GUIDELINES/
BRAND MANUALS
NO ASSOCIATION
NO THIRD PARTY
ASSOCIATION
The news media should not authorise any third party to use or
associate themselves with the Official Marks and should not use
the Official Marks in such manner that allows any third party to
gain an Unauthorised Association with the 2014 FIFA World Cup.
The Official Marks should be clearly separated from third party
advertisements in order to avoid any confusion. Extreme care should
be taken for publications, or sections of publications, sponsored by
third parties as the risk of mistaken third party association is high.
These FIFA Public Guidelines will be updated periodically. Please check FIFAs website www.FIFA.com for the latest version.
27