The opening of branches, subsidiaries, or agencies by foreign companies in Brazil has become a common practice for expanding markets, signing local agreements, or meeting regulatory requirements. However, the authorization process filed with the Registry of Commerce is only the starting point, not the end, of legal obligations.

What many managers may not know is that there are formal and periodic requirements that, if not complied with, can lead to the revocation of the operating license in Brazil. One of the main ones is the mandatory publication of financial statements and corporate acts.

To operate legally in the country, a foreign company must submit a set of documents to the competent Registry of Commerce, including articles of association, an operating plan, and a balance sheet, all of which must be translated by a sworn translator. After the registration is approved and the CNPJ number is obtained, many consider the process to be complete.

However, maintaining this record requires ongoing attention, with filings and periodic publications that prove the regularity of the branch or subsidiary’s operations within the Brazilian territory.

Under the terms of IN DREI No. 77/2020 and as consolidated by the DREI’s Foreign Company Manual, foreign companies authorized to operate in Brazil must, annually:

• Publish financial statements relating to its activities in the country; and
• Publish global financial results as required by the country of origin.

They must be published simultaneously:

• • In the Official Gazette of the Federal Government and the State; and
  • In a widely circulated newspaper in the location of the company’s Brazilian headquarters.

Failure to comply with these requirements may result in administrative sanctions, such as rejection of new filings, prevention of contractual changes, and even cancellation of the operating registration.

Corporate changes occurring at the foreign headquarters, such as changes in corporate purpose, address, capital, name, or corporate structure, must be reflected in the Brazilian registry through:

• Sworn translation of updated documents;
• Protocol of the corresponding act at the Registry of Commerce; and
• Publications in the same format as financial statements.

Failure to comply with this step compromises the validity of the registration and may generate unexpected requirements if the company needs to formalize new acts in Brazil.

Failures to comply with obligations are often only discovered when the company seeks to establish partnerships, participate in tenders, or expand its local operations. At these times, it is common for potential partners to demand:

• Latest publication of balance sheet or economic result;
• Proof of the authorization act and changes filed; and
• Updated simplified certificate from the Registry of Commerce.

Companies that neglect their obligations often face delays and obstacles in negotiations, incurring a significant risk of missing out on strategic opportunities.

With increasingly rigorous inspection by Registries of Commerce and the consolidation of understandings such as those in DREI IN No. 77/2020, documentary compliance has become a prerequisite for the full operation of foreign companies in the country.

Reviewing the corporate history of the Brazilian operation, ensuring that all mandatory publications are up to date, and filing any relevant changes to the foreign parent company are of extreme importance.

PLBrasil Paralegal provides comprehensive paralegal support for foreign companies operating in or seeking to operate in Brazil, among others, in the following activities:

• Mandatory publications in newspapers and Official Gazettes;
• Filing of corporate changes with the Registry of Commerce;
• Regularization of pending documents, with technical support and integrated management.

Our specialized team and digital platform ensure control, traceability, and full compliance with formal requirements, thereby avoiding risks and operational obstacles.