Disregarded Entities: Brazilian Federal revenue service targets structures like U.S. LLCs and reinforces tax compliance
A widely used corporate structure in the United States for tax efficiency purposes can expose Brazilian companies to tax infraction risks if not properly understood: the disregarded entity. Although fully recognized under U.S. law, it is often viewed more conservatively by the Brazilian Federal Revenue Service (RFB). This calls for heightened attention from Brazilian companies […]
Regulatory changes to public tender offers boost M&A activity in Brazil
In late 2024, the Brazilian Securities and Exchange Commission (CVM) issued Resolution No. 215, set to take effect on 1 July 2025. The new rule updates the regulatory framework for Public Tender Offers (OPAs), balancing market needs with investor protection while simplifying the overall process. A Public Tender Offer allows investors or companies to acquire […]
How Tax Reform is reshaping private contracts
While tax reform is often viewed solely through a fiscal lens, its effects extend into other areas of law. Supplementary Law No. 214/2025 significantly restructures the revenue system, altering the economic foundations of many contracts drafted under the previous tax model. This shift has direct implications for Contract Law. Although it is not yet time […]
Supreme Court to rule on legality of independent contractor model known as “Pejotização”
Brazil’s Federal Supreme Court (STF) will soon decide a key issue for the labor market: the legality of hiring professionals as independent contractors through their own legal entities—a widespread practice known locally as “pejotização.” Under this arrangement, workers provide services as legal entities (PJs), issuing invoices instead of holding formal employment governed by the Consolidation […]
Brazilian Government Expands Taxation Through Interim Measure and Revises IOF Rates by Decree
On 22 May 2025, the Brazilian Government issued Decree 12,466/2025, raising the rate of the Tax on Financial Transactions (IOF) to increase federal revenue. Among the key changes, the government introduced a 3.5% IOF rate on investments made abroad by Brazilian investment funds, which had previously been exempt. Additionally, the IOF rate on cash foreign […]
Proposed Legislation Introduces New Income Tax Exemption Threshold and Impacts Investment Funds and Receivables Certificates
On 18 March 2025, the Brazilian Federal Government submitted Bill No. 1,087/2025 to the National Congress. It proposes an income tax exemption for individuals earning up to R$5,000.00 per month. Additionally, it introduces a minimum income tax (IRPFM) targeting high-income individuals, introducing a progressive rate that applies to monthly incomes above R$50,000.00, reaching up to […]
Starting in May 2026, Brazilian companies will be mandated to address employees’ mental health
The Brazilian Federal Government, through the Ministry of Labor and Employment and with participation from business and labor representatives via the Permanent Tripartite Commission (CTPP)—a regulatory body composed of representatives from the government, employers, and employees—has included mental health as a criterion in the prevention of workplace harassment. This update is part of the Risk […]
New Law Establishes Regulatory Framework for Offshore Wind Energy in Brazil
Law No. 15,097/2025, enacted on 10 January 2025, establishes the regulatory framework for renewable energy generation in areas under federal jurisdiction, governing the construction and operation of offshore wind farms in Brazil’s territorial waters, continental shelf, and exclusive economic zone. The law also sets out rules for the granting of usage rights in these areas […]
Legal Certainty and Carbon Market Regulation
Law No. 15,042/2024, enacted on 11 December 2024, marks a significant step in regulating Brazil’s carbon market. It consolidates the legal framework for the trading of carbon credits under the Brazilian Emissions Trading System (SBCE), offering greater legal certainty to investors and companies interested in operating within the emissions compensation sector in Brazil. The SBCE […]
Structuring Investments Through Debt in Brazil: Tax Incentives and Risk Mitigation Under Law No. 12,431/2011
The growing use of structured transactions involving tax-incentivized debentures, as provided in Articles 1 and 2 of Law No. 12,431/2011, has established a strategic path not only to optimize tax outcomes for Brazilian issuers, but also to attract foreign capital while reducing legal and operational risks. From the perspective of international investors, this structure offers […]