The National Department of Trade Registration (DNRC), the current Department of Business Registration and Integration (DREI), recently published two Normative Instructions of extreme relevance for foreign investors.

By means of the NI number 38 of March, 2017, DREI instituted its new manual of registries that, after strong critics made by renowned jurists, began to admit the possibility of the participation of an entity, national or resident abroad, as titular of Individual Limited Liability Company (EIRELI).

EIRELI is a relatively new corporate type, created in 2011 year, with the advent of the federal law number. 12.441, which changed the Brazilian Civil Code, whose greatest difference among other corporate structures already covered by the legislation, is the participation of only one person, a corporation or an individual, in the company's capital stock that must be, ate least, the amount equivalent of 100 times the highest minimum wage in force in the country and must be fully paid at the time of its incorporation.

In addition, the rules already contemplated by the Brazilian Civil Code related to the Limited Companies are applied to the individual limited liability company, when applicable.

Another important change brought by the DREI refers to the power of attorney granted by individuals or legal entities not resident in the country, since all investors residing abroad must have at least one attorney-in-fact in Brazil. This instrument of power of attorney, public or private, must also be registered with the Board of Trade of the state where the company is established.

With respect to the legal representation of residents abroad, DREI may establish certain requirements for admission of the registration of powers of attorney by the Boards of Commerce and, therefore, by recently publishing NI number 34, created a new requirement, applicable to any type of company: the grant of the specific power of attorney to the legal proxy must contain powers to receive judicial summons and no longer can establish a term of validity for a certain time.

In effect, only Power of Attorney that do not mention a term or are granted indefinitely will be considered valid for registration purposes.

Both Normative Instructions 34 and 38 will become effective from the first week of May 2017 and RSM Brasil is available to clarify any doubts regarding to these important changes.

For more information, contact us: 

Marcelo Sampaio  - [email protected]
Partner - Head of Tax 

Viviane Pereira - [email protected]
Legal Consultant