August 2022 – Brazil – Rossetti Advogados
The Central Bank of Brazil approved, on July 19, public consultation notice No. 91/2022, about a proposed normative act to regulate foreign capital in Brazil regarding foreign credit transactions and direct foreign investment.
According to the Central Bank, the proposal seeks, first, to regulate certain aspects of the New Exchange Law – Law No. 14.286 of December 29, 2021, which shall come into force on December 31, 2022 and, second, to improve the business environment in Brazil, facilitate the insertion of Brazilian companies in the international markets and increase the attractiveness of the Brazilian economy to foreign capital.
From among the matters proposed by the Central Bank, we note the following:
- Reduction in the scope of foreign credit transactions and direct foreign investment subject to the provision of information to the Central Bank of Brazil by means of the proportionality criterion, considering the transaction amounts and characteristics. Initially, the suggested ranges are: (a) USD 1 million for foreign credit transactions, early receipt of exports (or export prepayment) and foreign financial lease (the latter with a payment term in excess of 360 days); (b) USD 500,000.00 for the financing of import of goods or services with a payment term in excess of 180 days; and (c) USD 100,000.00 for direct foreign investment;
- end of the restriction to remittances abroad from Brazil for the payment of principal and interest in foreign credit transactions in which no funds enter the country; and
- end of the requirement to provide information to the Central Bank of Brazil on agreements between residents and non-residents relating to the use or assignment of patents, industry marks and trademarks, technology supply, for purposes of transfers of funds by way of royalties, as well as those related to the provision of technical and similar services, foreign operational lease and rent and charter.
This public consultation will extend until next September 2, for the parties interested in the matters to offer contributions to improve the regulation relating to foreign capital in Brazil with respect to the foreign credit transactions and direct foreign investment.
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This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.