Jayme Petra de Mello Neto
Lawyer at Marcos Martins Advogados
Brazilian companies receiving foreign investments must update the value of their net equity, paid-in capital and participation of foreign investors in the Electronic Declaratory Register (“RDE”), referring to the base date of December 31, 2018, under the terms of Circulars 3,689/2013, 3,795/2016, 3,814/2016 and 3,822/2017, issued by BACEN. The deadline for submitting the information to the Central Bank of Brazil (“BACEN”) is April 1, 2019, considering that March 31, the original deadline, will be a Sunday.
This update applies to companies in the following ways:
- Companies receiving foreign direct investment with assets or net worth of less than R$250,000,000.00 (two hundred and fifty million reais) must provide an annual economic and financial statement, by March 31 or the next business day, if the Central Bank of Brazil is not open for business, referring to the base date of December 31 of the previous year; or
- Companies receiving foreign direct investment with assets or net worth equal to or greater than R$ 250,000,000.00 (two hundred and fifty million reais) must provide 4 (four) economic-financial statements per year, observing the following schedule:
- for the base date of March 31, it must be submitted by June 30;
- for the base date of June 30, it must be submitted by September 30;
- for the base date of September 30, it must be provided by December 31;
- for the base date of December 31, it must be provided by March 31 of the following year or the next business day if the Central Bank of Brazil is not open for business.
Updating after the stipulated deadline, as well as delivery with errors or defects, with false or incomplete information or failure to update, is subject to a pecuniary fine by BACEN of up to R$ 250,000.00 (two hundred and fifty thousand reais), as established by Circular 3,857, of November 14, 2017, and article 36 of Law 13,506, of November 13, 2017.
It should be noted that the periodic obligations provided for in the aforementioned normative acts do not remove the obligation to update the Electronic Declaratory Record of Foreign Direct Investment (“RDE-IED”) within 30 (thirty) days of the occurrence of any event that changes the foreigner’s shareholding in the company.
The law firm Marcos Martins Advogados Associados is at your disposal for any clarifications and measures regarding the aforementioned obligations.
