🇧🇷 Annual Compliance — Brazil

Failing to register foreign capital with the Central Bank

Fix: All foreign investment must be registered via RDE-IED within 30 days of the capital inflow. Without this registration, you cannot legally repatriate profits or capital. This is not optional — it is a legal requirement and a critical step that many founders overlook.

Not electing Simples Nacional when eligible

Fix: If your annual revenue will be under BRL 4.8 million, the Simples Nacional regime can reduce your effective tax rate dramatically and eliminate the need to manage multiple separate tax filings. Election must be made in January of each year or at the time of company formation. Miss the window and you wait a full year.

Underestimating the cost of Brazilian labour law compliance

Fix: Brazil's CLT (Consolidação das Leis do Trabalho) mandates 13th-month salary, 30 days paid vacation plus a 1/3 vacation bonus, FGTS contributions (8%), and significant termination penalties (40% FGTS fine for dismissal without cause). Total employment cost is typically 70–100% above base salary. Budget accordingly.

Choosing a legal representative without understanding the liability

Fix: The Brazilian legal representative (administrador) has personal liability in tax, labour, and environmental matters. Do not appoint someone casually — this role carries real legal exposure. Use a trusted individual and ensure proper corporate governance documentation.