Merger and Acquisitions in Sao Paulo
Merger and Acquisitions in Sao Paulo, our services include strategy development, corporate valuation, financial consulting, pre- and post-merger evaluation and due diligence works.
- Limitations of M&A in Brazil
❶ Prohibiting industries
According to a government ordinance, the following industries are prohibited to do the foreign investment.
- Production of tranquilizer
- Production of poisonous chemical and goods that will have a negative affects.
- Production and manufacturing of electricity using the waste from foreign countries
- Forest development that is prohibited by Forest Act
❷ Limitations of investment ratio
Except the industries mentioned above, foreign investment of 100% is recognized generally. The local industries in Brazil almost do not exist so that there is no industry that need be protected. Therefore, it is can be said that it is one of most open countries.
❸ Limitations of capital
The least capital of new registration is 4,000,000KHR. But if foreign companies apply for the good treatment of investment, other law rules the least capital.
❹ Limitations of using land in Brazil
According to constitution in Brazil, foreign companies and individuals cannot own the land in Brazil. But it can use it by lease and some other ways.
Except the land, foreign companies and individuals can own the apartments and collective hosing higher than two floors.
❺ Limitations of employment of foreign employees
Foreign companies should prefer to employ the Brazil. If foreign companies cannot acquire local staffs with high abilities, it is recognized to employ foreign managers, technologists or professors. And the upper limit is 10% of total employees.
❻ Limitations of foreign exchange
The remittance over 10,000 dollars should submit the application to Brazil National Bank and must obtain the permission.
It is required to do the taxation declaration to Tax Office if foreign companies take cash over 10,000 dollars in or out of Brazil.
Both residence and foreigners can borrow a fund in Brazil. However, the lending and borrowing should both perform through Certified Banks.
Another point is that while exporting or importing a precious metal, It is necessary to submit application to Brazil National Bank advance.
2.Schedule and process of M&A in Brazil
- Investment incentives of QIP
The purpose of system of qualified investment project is to do the job creation and promote the development of industries. In order carry out the qualified investment project, it is required to apply for permission to Council for the Development of Brazil.
- Contents of incentives
For the purpose of promoting the continuous investment service, Council for the Development of Brazil established the Brazil Special Economic Zone Committee. Under the management of this committee, the service from registration of investment project to permission of exporting and importing can be provided.
- Corporation tax exemption and incentives of special redemption
According to the tax exemption of QIP, the tax can be exempted for 9 years at most. There are three schemes of periods including beginning period, three-years period and priority period. The period from issuing of final registration certification to appropriated profits and the period of three years that the sales appropriated will be compared. And the shorter one will be the beginning period.
Priority period will be decided by the industry of investment and amount of investment. And longest period is three years.
- Incentives of customs duty
The common incentive of customs duty is duty free for equipment of production and materials for construction.
For the foreign companies that is for the domestically oriented production (OIP) is applicable for duty-free. The subjects include equipment, production materials and production investment for exporting. In addition, the imported production materials are applicable for duty free at the moment of importing. And the exported goods can be applied for duty free based on the quantity of used materials after the examining of financial statements.
For the foreign companies that are for the export-oriented production are applicable for duty free, which is not only for equipment and construction materials but also for raw materials, middle materials and additional materials. However, the ratio of production for exporting has to be regulated.
To learn more about our incorporation assistance and a range of services related to M&A in Brazil, send us a message or call us at +55-11-3218-7790.