According to BCB Resolution No. 278, of December 31, 2022, amended by BCB Resolution No. 348, of October 17, 2023 (“Resolution 278“), both published by the Brazilian Central Bank (“BACEN”), the responsible party shall provide information to BACEN regarding transactions involving foreign direct investments in the event it falls into one of the following cases:
(i) occurrence of a transfer of funds in connection with a non-resident investor, including the movement of third-party funds in a non-resident account in Brazilian reais, in an amount equal to or greater than US$100,000.00 (one hundred thousand United States dollars) or its equivalent in other currencies;
(ii) occurrence of a transaction in an amount equal to or greater than US$100,000.00 (one hundred thousand United States dollars) or its equivalent in other currencies, in the following cases: capital injection paid-in with tangible or intangible assets; conversion of rights remittable abroad not reported as external credit into corporate capital; assignment or exchange of shares, paying-in shares of an entity with shares of another, whether between resident and non-resident investors or between non-resident investors; cross-border capital injections where shares of an entity are being paid-in in exchange of shares issued by another entity from a different jurisdiction; corporate restructuring; distribution of profits and dividends, payment of interest on equity, sale of equity interest, capital reimbursement and receipt of net assets resulting from liquidation, when carried out directly abroad or in national currency in Brazil; payments and receipts in non-resident accounts in Brazilian currency; or reinvestment.
Note: The information mentioned above must be provided starting on October 1, 2024.
(iii) occurrence of the reference date of the periodic statements for recipients subject to such statements occurs, as below.
It should be noted that items “i” and “ii” do not apply to financial transfers and transactions involving securities, as provided for in the regulations of the National Monetary Council (CMN) and the Securities and Exchange Commission (CVM).
Quarterly Statement:
- Mandatory for: Companies with foreign direct investment with total assets equal to or greater than R$300,000,000.00 (three hundred million reais) on the reference dates of each year:
- Reference dates:
- March 31;
- June 30; and
- September 30.
- Submission Deadlines:
- March 31 reference date: from April 1 to June 30;
- June 30 reference date: from July 1 to September 30; and
- September 30 reference date: from October 1 to December 31.
Note: For fiscal year 2024, the quarterly statement regarding the September 30 reference date will be due from November 11 to December 31, 2024.
Annual Statement:
- Mandatory for: Companies with foreign direct investment with total assets equal to or greater than R$100,000,000.00 (one hundred million reais) on the reference date of:
- Reference date:
- December 31 of the previous year.
- Submission deadline: from January 1 to March 31 of the following year.
Five-Year Statement:
- Mandatory for: Companies with foreign direct investment with total assets equal to or greater than R$100,000.00 (one hundred thousand reais).
- Reference date:
- December 31 of calendar years ending in 0 (zero) or 5 (five)
- Submission deadline: from January 1 to March 31 of the following year.
Note: The annual statement is not applicable in years when the five-year statement is required.
Detailed information must be provided for purposes of the periodic information to BACEN, reporting the corporate structure, identification of foreign investors, economic and accounting figures, and company profits. Furthermore, additional data may be requested allowing BACEN to track economic and operational activities, such as sector of activity, employment, revenue and international trades.
Failure to submit the periodic statements, or the provision of incomplete or incorrect information, subjects the declarant to a fine of up to R$ 250,000.00 (two hundred and fifty thousand reais), which may be increased by 50% in some cases, in accordance with BCB Resolution No. 131 of August 20, 2021.
Those responsible for providing the information must keep the supporting documentation for 10 (ten) years (counting from the reference date of the statement) to present it to the Brazilian Central Bank, if requested.
Costa e Tavares Paes Advogados team is available for further clarification about the statements related to the foreign direct investment transactions, as well as to provide any information on the topic and to assist with filling and submission.
This newsletter is meant for information purposes only and should not be construed as a legal opinion.