2024 Regional Roundtable Update: Brazil

Firm Name: TozziniFreire Advogados
Authors: Tony Barbuto

1. How is the political environment impacting business in or with your country?

In 2023, Brazil experienced a significant political shift in the Federal Government. Despite this change, the new administration has shown a pragmatic approach toward local and foreign investors. This is reflected in their maintenance of liberal economic policies and introducing reforms to improve business conditions.

Notably, the government has launched initiatives to enhance infrastructure development and digital transformation, sectors identified as key drivers for economic growth.

For clients new to Brazil, it's important to note the country's openness to foreign investment: there are no national security restrictions on majority stakes in companies, and the judicial system treats foreign litigants without bias. Additionally, recent legal adjustments have streamlined the process for international companies to operate in Brazil, reducing bureaucratic hurdles and enhancing judicial predictability.

2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?

The US remains amongst Brazil’s major investors. Fund managers are looking into Brazil's huge marketplace,strategic geographic location, and leadership in climate initiatives (renewable energy).

France, Spain, and the Netherlands have also been actively investing in Brazil, particularly in commerce, non- metallic mineral products, chemical products, financial services, and motor vehicles.

Singapore’s sovereign fund (GIC) has recently established an office in São Paulo and is looking into infrastructure investments, data centers, logistics, and shopping malls.

These investments underline the diverse economic opportunities available in Brazil, supported by its robust industrial and service sectors.

There is substantial potential for future collaboration with these countries on cross-border matters within the region, especially in areas such as energy transition, digital infrastructure, and sustainable agriculture. As Brazil continues to liberalize its market and streamline regulatory processes, the environment for international cooperation and investment is expected to improve further, enhancing prospects for multinational partnerships.

3. What legislation has recently changed or is changing that a potential international client should be aware of?

Brazil recently approved a significant tax reform aimed at simplifying and streamlining one of the world's most complex systems. While full implementation will take years, it's crucial for local and foreign clients to adjust their strategies accordingly.

Also, companies in Brazil have until the end of May to register in a centralized online system maintained by the Court System called Electronic Judicial Address. Essentially, this will be our centralized system for electronic service of process.

This System is designed to consolidate all legal notifications and communications from Brazilian courts in a single online location. In other words, there will be no more paper summons, or legal notices for companies. Legal entities will now receive and monitor legal summons, notices, and other procedural notifications through this electronic service of process system.

If your clients have legal entities incorporated in Brazil, they should be aware of this update to our civil procedure rules and the need to register with the Brazilian centralized court system to avoid sanctions/fines.

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