Brazil: Obligation to Provide Information on Registered Entities’ Corporate Structure
Effective January 1, 2017 Brazilian and foreign companies are required to identify the final beneficiaries of corporate registrations in Brazil.
The obligation is to identify the natural person who ultimately, directly or indirectly, owns, controls or significantly influences in a particular entity or on behalf of whom a transaction is undertaken.
The following obligation dates apply:
- New entities on or after January 1, 2017, incorporation date
- Existing entities incorporated before January 1, 2017, must identify the Final Beneficiary to the Brazilian Tax Authorities by December 31, 2018
Legal entities that do not provide the complete final beneficiary information risk having their legal registration number (CNPJ) suspended and may be precluded from certain activities, which would likely affect their ability to conduct business in Brazil.
US companies should be familiar with this level of detailed documentation required of beneficial owners as the IRS requires similar criteria when completing Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a US Trade or Business).