I guess it was Mark Suster who made a comment on how you should trust VCs who pick up their wives calls as this is a good proxy to how they will deal with you once you are on the portfolio but that is no excuse.
I apologize to all of those that missed me but I got married and went on my honeymoon. When I got back… well.. You can imagine.
But I’ll pick-up where I left off.
An interesting entrepreneur asked me how do foreigners start companies in Brazil. As I’ve seen an “invasion” of foreign entrepreneurs (likely to be my next topic) lately, I guess this is a relevant point.
Talked to my lawyers and here is the thing. If you are a foreigner with a residence visa, it is a little different from if you do not have such a visa.
If you do have a Residence visa, you will need to get an RNE (foreigners registration number) with the Federal Police. (Be aware that this process may take a really long time… I’ve heard of year+).
Once you are done with it, you have to get a CPF (Brazilian Tax Payer Number) from Receita Federal (IRS). This is simple and rather quick. Try using a Poupa Tempo if you are in Sao Paulo
If you do not have a residence visa, you will need to hire a lawyer ( i can point you to some) and give him power of attorney to represent you in Brazil.
Now we really start the process of setting up the company:
1-You have to draft the shareholders agreement (Contrato social) and register it at Junta Comercial (commercial board). Beware that companies in Brazil cant belong too ne single person, so you will need a partner, even if he has only 0.000001% of the company.
To register you will need to have copies of your ID’s , CPFs and proof of residence. This takes about 2 weeks.
It is often that the shareholders agreement gets rejected due to some bureaucratic detail
2- Go online to Receita Federal (IRS) (www.receitafederal.gov.br) where you can start the process in order to get a CNPJ (corporate tax payer number). You will have to send a notarized copy of the registered shareholders agreement. They should take about 2-3 weeks to get back to you with the number.
3- Once you have the number you can open bank accounts and fulfill most of your other operational needs. You can even start running the business.
But you are not done. If you are opening a commercial company, you have to go online to Receita Estudal (State IRS) in order to register with them. Expect 3 weeks.
4. Whether you are opening a commercial company or not, you will also need to register with the city hall. Expect 3 weeks but this can be cone in parallel with the state registration.
5. Depending on the type of company you are opening other registrations may apply as ANVISA (FDA) for restaurants, drugstores, hospitals and so on. But as that is on a case by case basis, I’d rather not go into details.
Neither these steps are expensive (about R$150 each) but they often are very frustrating and long for someone that doesn’t understand all the details ( there is no how-to-open-your-company-in-Brazil-for-Dummies manual).
An easier and speedier option is to buy a shelf company (a company that has never been operational and was only created to be sold) from a respectable lawyer. I can point you in the right direction if you need. They normally go for R$3000 to R$5000.
I hope I didn’t mix up any of the bureaucratic steps. If I did, please correct me.
I hope that helps!
PS: Pieter, an amazing Dutch entrepreneur, leading http://www.escolherseguros.com.br added 2 observations (they were true at least in 2009/2010)
– You need to have set up the company and transferred the investment before you can obtain an investor visa (you’ll need to appoint someone else to manage it while you wait for your visa)
– No need to wait with the request for your CPF until you get the visa, get it rightaway, much easier