Beneficial Owner Statement
On 6th May 2016, the Federal Revenue Services (“RFB”) issued the Normative Instruction nº 1.634, which regulates the Corporate Taxpayer’s Registry (“CNPJ”).
This normative instruction brought an additional obligation towards the entities domiciled in Brazil, and also the foreign entities owning corporate participation in Brazil (as well as foreign entities owning rights on real estate, vehicles, crafts, aircrafts, bank accounts and financial and capital market’s applications).
Henceforth those entities, which already had the obligation to enroll themselves with the CNPJ, have to report about their beneficial owners.
On the terms of this normative instruction, beneficial owner is (i) the natural person who, in final instance, directly or indirectly, exerts control or dominant influence on the entity or (ii) the natural person on whose behalf a transaction is being conducted.
Still, they understand as dominant influence the natural person who (i) owns more than 25% of the corporate capital of the company, directly or indirectly, or (ii) directly or indirectly, has or exerts preponderance control on the company’s decisions and has the power to appoint the majority of the company’s directors, even without controlling it.
Therefore, the RFB enlarged the scope of information (and corroborating documents) that those entities shall provide, and, now, obliged them to disclose their chain of corporate participation until it reaches the natural persons.
The entities that enrolled with the CNPJ after 1st July 2017, shall have the obligation to provide the information regarding their beneficial owners within ninety (90) days of the enrollment date.
Regarding the entities that enrolled with the CNPJ before 1st July 2017, they shall inform their beneficial owners when proceeding with any modification on their registries, after July 1st 2017 and before 31st December 2018.
The documents that have to be submitted by the entities to demonstrate the identity of their beneficial owners are the following:
• Incorporation documents or a detailed certificate issued by the local Board of Trade;
• An identity card or passport of the legal representative of the entity on the country of origin;
• The document demonstrating the administration power of the legal representative in the country of origin of the foreign company (minutes of election or all other equivalent documents) , if this information isn’t provided on the incorporation documents of the entity;
• A certified copy of the power-of-attorney granted to its representative in Brazil;
• A certified copy of the identity card of the above mentioned representative in Brazil; and
• The shareholders and administration (directors/administrators) structure.
All the documents shall be apostilled (except for France, Italy and Argentina), legally translated by a certified translator and registered with the deeds and documents notary.
The entities which do not provide the information shall have their registry (CNPJ number) suspended.
GTLawyers remain at your disposal to clarify any questions and to assist your entity to provide all required information to the Federal Revenue Service.
Anne-Catherine Brunschwig and Alexandra Palhares, GT Lawyers – Rio de Janeiro, August 27th 2018