All companies that have National Register of Corporate Taxpayers – CNPJ (having Brazilian or foreign shareholders) must provide information to the Federal Revenue up to December 31, 2018, informing all its direct and indirect shareholders, and also the FINAL BENEFICIARY.
WHO IS THE FINAL BENEFICIARY? The natural person that ultimately, directly or indirectly, controls or significantly influences the entity (more than 25% or power to elect managers).
The rules referring to the companies with foreign and Brazilian shareholders are presented below.
1. COMPANIES WITH BRAZILIAN SHAREHOLDERS (INDIVIDUALS OR LEGAL ENTITIES)/
The information about the companies enrolled with the National Register of Corporate Taxpayers/Ministry of Finance (CNPJ/MF) must comprise the entire corporate chain up to the final beneficiary, according to Normative Instruction No. 1634 (“IN 1634/16”) of the Brazilian Federal Revenue, which consolidates all rules applicable to the enrollment in, changes, and cancellation of the CNPJ/MF.
Which is the deadline ? Immediately.
Which is the necessary documentation? The Brazilian Federal Revenue forms and the notes of the procedures required by the Federal Revenue.
2. COMPANIES WITH FOREIGN SHAREHOLDERS (INDIVIDUALS OR LEGAL ENTITIES)
The information about the companies enrolled with the National Register of Corporate Taxpayers/Ministry of Finance (CNPJ/MF) must comprise the entire corporate chain up to the final beneficiary and the data about the legal representatives of the foreign company, according to Normative Instruction no. 1634 (“IN 1634/16”) of the Brazilian Federal Revenue, which consolidates all rules applicable to the enrollment in, changes, and cancellation of the CNPJ/MF.
Which is the deadline?
The entities enrolled in CNPJ before 07/01/2017 must inform the beneficiaries and submit the necessary documentation until 12/31/2018;
The entities enrolled in the CNPJ after a 07/01/2017 must inform the beneficiaries and submit the documentation within at least ninety (90) days as from the date of enrollment in the CNPJ.
Which is the necessary documentation?
I – organizational document (or full certificate) of the entity; II – identification document or passport of the entity’s legal representative in the country of origin; III – act demonstrating the management power of the legal representative in the country of origin of the foreign entity (minutes of the election or an equivalent document); IV – an authenticated copy of the power of attorney appointing its attorney-in-fact in Brazil; V – an authenticated copy of the identification document of its attorney-in-fact in Brazil; and VI – chart of the corporate chain up to the final beneficiaries.
The foreign documentation refers to the direct and indirect shareholders, up to the FINAL BENEFICIARY.
The foreign documentation must be certified by a notary public (validated by a foreign notary public) and have an apostille if the country is a signatory of the Hague Convention, otherwise, it must be certified by the Brazilian Consulate abroad before it is sent to Brazil. When the documentation arrives at Brazil, it must be translated by an official translator and registered with the register of deeds and documents.
3. WHICH ARE THE ENTITIES THAT ARE NOT REQUIRED TO COMPLY WITH THIS NORMATIVE INSTRUCTION?
Nonprofit entities, social security entities, investment funds, publicly held corporations located in Brazil or in those countries that require a public disclosure of all shareholders considered relevant and are not organized in jurisdictions with favored taxation or are under a privileged tax regime according to arts. 24 and 24-A of Law no. 9430/96, among others listed in the IN.
4. WHICH ARE THE PENALTIES?
The enrollment in the CNPJ of the foreign entities will be suspended and they will be prevented from doing business with banks, including from operating bank accounts, making financial investments, and taking out loans.
There is no express penalty to Brazilian companies.