February 2022 – Brazil – Rossetti Advogados
Law 14.286/2021 was published on December 30, 2021, providing on a new Framework for the Brazilian foreign-exchange market and Brazilian capital abroad, foreign capital in Brazil and the provision of information to the Central Bank of Brazil. Such law also amends the related laws, to institute a modern, concise, and juridically safer framework, aligned with the best international regulatory standards.
The purpose of the new framework is to modernize the foreign-exchange market, improve and render the business environment more efficient in Brazil, permitting the entry of new players, and also enable more insertion of the Brazilian companies – including small- and medium-sized companies – in the global value chains.
For example, the law permits that banks and financial institutions invest abroad funds raised in Brazil or abroad, and it also facilitates the use of Brazilian currency in international transactions.
The rule also increases the limit of cash each passenger may have when leaving or arriving in Brazil. Instead of the current ten thousand Reais (R$10,000.00), such limit will now be ten thousand U.S. Dollars (US$10,000.00) or the equivalent amount in other currency. Occasional and non-professional negotiations of small amounts between individuals are also permitted, in an amount of up to US$500.00.
Please note that the new law has not amended any taxation to send and receive currency, nor the criteria for companies to engage in the activity. The text also does not change the Brazilian monetary policy.
The text reinforces the powers of the Central Bank (BC) to regulate who may hold accounts in foreign currency in Brazil and the respective requirements, and it also transfers to the Central Bank some former duties of the National Monetary Council (CMN), such as the power to regulate foreign-exchange transactions, futures foreign-exchange contracts used by the Central Bank to avoid speculation with Reais (swaps) and the organization and inspection of brokerage firms, stock and foreign-exchange brokers.
Finally, we mention that the purpose of this adjustment is to align the Brazilian foreign-exchange market with that of the countries of the Organization for Economic Cooperation and Development (OECD), according to the tripod: modernization, simplification (streamlining) and more efficiency.
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.