9 articles Articles posted in Setting up operations

Starting a business in Brazil as a foreigner

Opening a business is very difficult, especially as a foreigner. There are different ways of opening the company; one is to start from scratch and open a new company, and another is to buy an off-the-shelf company. I have not had direct experience with buying an off-the-shelf company, but I know there are pros and cons. It can certainly be quicker but it demands serious due diligence. There are circumstances in which it is more …

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Top 12 tips to speed up opening a business in Brazil

The quickest way to open a limitada in Brazil is to buy a company off-the-shelf.   Although I have not yet done this, I would recommend looking into it.  You need to make sure the source is trusted and perform a complete due diligence.  Ideally you buy a recently incorporated company. Here are the top 12 tips to speed up opening a limitada from scratch (learned the hard way): 1) Understand the legal risks of being an administrator …

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Being a Country manager in Brazil

I worked as a country manager for a European startup in Brazil for the last 6 months. After the first 4 months, the startup was acquired and the strategy to entry Brazil was pushed back for cash-flow reasons. However, I can give you an idea what it is like to be a Country Manager. As a Country Manager, you typically don’t report to investors. This means that you are a startup executive, not an entrepreneur. …

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Checklist to open a company in Brazil

The average time to start a company in Brazil is 120 days.  Remember this is an average and it can take even more time to get your legal entity up and running.  You should actively manage the process in order to minimize the time to getting your company incorporated. That said, here are the steps involved in opening a company in Brazil.  I highly recommend reading this detailed checklist which has more information and timings. ITEM MEASURES …

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Legal risks of starting a limitada company in Brazil

In theory, limitadas are equivalent to limited liability companies in the US. However, in practice, this is not the case. Judges can “pierce the corporate vail” and go directly after the partners of the limitada for liabilities in two cases: 1) If there has been fraud (known as the “teoria maior”) 2) If the company is insolvent (known as the “teoria minor”) Unfortunately, judges use the second case very loosely and tax and labour liabilities …

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Why most startups are “limitada” in Brazil

There are two types of legal structures for companies; (i) limitadas or LTDA, roughly analogous to a limited liability and (ii) sociedade anónima or SA, roughly analogous to a corporation. Most startups set themselves up as a LTDA so they can enter the “simples” tax regime with low tax brackets. Limitadas don’t have shares, they have quotas (similar idea, different name). You need to have at least two quotaholders but are not required to have …

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Renting an office in Brazil

I am not sure about other cities but renting for a startup in Rio de Janeiro is not straight-forward at all. Aside from the mountains of paperwork, which are given in Brazil, here are some of the main issues you will face: High cost per m2: Expect to pay R$80-100 per m2 for anything with half decent transport access and security in Rio de Janeiro. I have spend 3 months searching for a decent office …

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Top payment gateways in Brazil

Online payment is still a pain spot for Brazilian startups.  There are several payment platforms in Brazil which include the following companies: PagSeguro Moip Paypal Pagamento Dgital Mercado Pago Braspag and Adyen are examples of payment integrators who require more technical integration for your site. I have a full summary of the conditions on the following Google spreadsheet: All the platforms are much more expensive than the US. 4-7% plus a transaction fee. This shocked …

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Registering a brand in Brazil

Registering a brand and logo with the INPI takes on average 3 years. Interestingly 35% of applications for brands never get finished.  A short post for a long process.

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