The foreign capital entering Brazil may be invested in the subscription of shares or quotas of new companies, or in the purchase of shares or quotas in already existing companies. The profits gained by companies established in Brazil and attributed to entities residing and domiciled abroad are considered as reinvestments, whether they are reinvested in the same companies from which they resulted or are invested in another sector of the national economy. The reinvestments are equally eligible for registration as foreign capital with the Central Bank and are added to the investments originally registered. As indicated above, the remittance of dividends abroad is subject to the prior registration of the foreign investment at the Central Bank of Brazil. Such a rate can be reduced in the event the recipient of the payment is domiciled in a country with which Brazil has entered into an agreement to avoid double taxation.
Branches form a part of the foreign investors legal entity.
They are a subordinated legal body, strictly tied up to be foreign investors legal existence. At the time this authorization is requested, the foreign investor shall make a deposit of an amount to be determined by the governmental body which renders the authorization. The proof of this deposit shall be registered at the competent Brazilian Board of Trade. This is to guarantee local creditors. A foreign investor is free to choose any of the existing types of company provided by Brazilian law.