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Brazil Auto Playbook

Part II — Setting Up Shop (legal / corporate)

Status: 📝 annotated outline — to research. No repo source yet. Needs a legal/corporate pass (a Brazilian corporate lawyer + Banco Central/foreign-capital rules). Numbers below are placeholders to be sourced, not facts.

This part answers: “as a foreign company, how do we legally exist in Brazil, who can own us, and what does it cost to stand up the entity?“

5. Company types (LTDA vs S.A. vs branch)

Section titled “5. Company types (LTDA vs S.A. vs branch)”

What to cover: Sociedade Limitada (LTDA) — the default, simplest, most common; Sociedade Anônima (S.A.) — for capital-raising/governance (Lecar itself is an S.A.); filial de empresa estrangeira (branch of a foreign company) — requires federal executive decree, rarely used. 🚩 Source the decision tree and the practical default for an OEM subsidiary.

6. Foreign ownership & capital — is it allowed, how it’s registered

Section titled “6. Foreign ownership & capital — is it allowed, how it’s registered”

What to cover: Yes, 100% foreign ownership of a Brazilian company is allowed in the auto sector (confirm any exceptions). Foreign capital must be registered with the Banco Central via RDE-IED (Registro Declaratório Eletrônico – Investimento Estrangeiro Direto) to allow profit/dividend remittance and capital repatriation. 🚩 Source the registration steps, FX rules, and remittance mechanics.

7. Subsidiary vs branch (filial) vs joint venture

Section titled “7. Subsidiary vs branch (filial) vs joint venture”

What to cover: the three structural routes — wholly-owned subsidiary (own LTDA/S.A.), branch (heavy, decree-bound), JV with a local partner (the Lecar-style route — links to Part V §29). Trade-offs: control, liability, speed, tax. 🚩 Build the comparison table.

Section titled “8. CNPJ, legal-representative requirement, ongoing obligations”

What to cover: CNPJ (the federal tax ID — nothing operates without it); the requirement for a resident legal representative / administrator in Brazil; foreign partners need a CPF and a Brazilian attorney-in-fact; ongoing accounting/SPED/tax filings. 🚩 Source the resident-director requirement and the compliance calendar.

9. Corporate tax regimes (Lucro Real / Presumido)

Section titled “9. Corporate tax regimes (Lucro Real / Presumido)”

What to cover: Lucro Real (actual profit — mandatory above a revenue threshold and typical for auto/import operations), Lucro Presumido (presumed profit — simpler, capped), why an importer/assembler usually lands on Lucro Real, and how this interacts with the import taxes in Part IV. 🚩 Source thresholds and effective rates.

10. Cost & timeline to stand up the entity

Section titled “10. Cost & timeline to stand up the entity”

What to cover: realistic calendar (weeks-to-months) and cost to register the company + CNPJ + state/municipal registrations + RDE-IED. 🚩 All figures to be sourced — do not estimate without a source.

Connects to: Part IV (the entity’s tax regime drives import-cost treatment) and Part V §29 (subsidiary-vs-JV is half of the partner-vs-own-network decision).