Brazil Insider Part 1: CNPJ and CPF registration

Brazil, to some, is a tangle of acronyms referring to licenses and public authorities with opaque and overlapping competences that, most frustratingly, delay any and all procedures when establishing a business in Brazil. It may also be a land of concepts and regimes unheard of in most other countries, such as monetary adjustment (correção monetária) or registration of foreign capital (registro de capital estrangeiro).

I am afraid this is correct. That is why any Brazilian venture requires a roadmap and preparation.

With the humble purpose of bringing some light into the darkness, we will periodically picture some of the institutions and concepts that foreigners frequently encounter when doing business in Brazil.

Our first article covers CNPJ and CPF registration.

CNPJ and CPF

The Brazilian Federal Revenue, which is subordinated to the Ministry of Finance, is responsible for keeping a register of all individuals and entities/companies which fulfill the requirements for mandatory enrolment in that register as provided for by Regulations IN RFB No. 1634 of May 6, 2016 and IN RFB No. 1548 of February 13, 2015.

As part of registration, the Brazilian Federal Revenue will assign a CPF (Cadastro de Pessoas Físicas) number to individuals, and a CNPJ (Cadastro Nacional de Pessoas Jurídicas) number to entities/companies.

Besides those individuals and entities that are actually tax residents of Brazil, certain other foreign individuals and entities that, in principle, are not tax residents in Brazil must also register with the Brazilian Federal Revenue. For example, this applies to foreign individuals and entities that own real estate, vehicles, vessels, airplanes, bank accounts, financial investments and, last but not least, equity in Brazilian companies. Thus, future foreign shareholders of Brazilian subsidiaries must register with the CNPJ or CPF prior to the incorporation of the subsidiary. While CPNJ registration can be obtained simultaneously with the registration of the foreign entity with the Brazilian Central Bank, CPF registration can be obtained with the state-owned banks Banco do Brasil and Caixa Econômica Federal, or the Brazilian Post (Correios). Obtaining CPF registration is a rather straightforward process that can be completed by an individual holding a power of attorney.

In this respect, it is crucial to note that for any foreign document, including a power of attorney granted abroad, to be valid in Brazil, it must be notarized and apostilled (The Hague Convention 1966), translated by a certified translator registered with a Brazilian Commercial Registry (Junta Comercial) and, finally, registered with the Registry of Deeds and Titles in Brasil (Cartório de Registro de Notas).

Once the foreign entity or individual ceases to own equity in a Brazilian company, CNPJ or CPF registration should be suspended.