Mergers and Acquisitions

Limitations of M&A in Brazil


❶ Prohibited industries


  • Unclear energy
  • Post and telegram industry
  • Aerial space industry


❷ Industries with regulations


  • Management and ownership of television, radio, news and magazines


Condition: at least Brazilian should hold 70% of resolution or people naturalized Brazilian more than 10 years.


  • Transpiration of freight on the land


Condition: it is necessary to obtain permission of Brazil government.


  • Domestic aviation


Condition: head office should be in Brazil and Brazilian should hold 51% of shares with resolution.


  • Munitions industry


Condition: Brazilian should hold two-third of shares with resolution.


  • Cable TV


Condition: head office should be in Brazil, and at least Brazilian should hold more than 50% of resolution or people naturalized Brazilian more than 10 years.


  • Activities around the border


Condition: at least 51% of shares should be hold by Brazilian corporations and individuals must own it.


  • Coastal transportation service
  • Research and development of mineral and water resources


Condition: head office should be in Brazil and Brazilian of individuals or corporations must manage it.


Limitations of land


Foreigners no matter individuals or corporations can acquire the land except for land regulated by Brazil government.


❶ the land in city generally without restrictions

❷ the land in a district


The purpose of using land is development and introduction of industrial production or agriculture and stock farming. And it is recognized that these businesses accomplish the responsibility of society. In some of these cases, it is necessary to obtain permission of Agriculture Office or Development Business Office.


❸ possible area that can be acquired by foreigners

Foreigners can acquire 50MEI of land, which is regulated by INCRA. There is no restriction of possible area for foreigners. But according to No. 8629 Regulation, if foreign corporations will purchase the land over 100MEI, it is required to obtain permission of Congress.


Restrictions of capital


❶ When setting up a corporation in Brazil, there is no restriction of least capital.


However, if the foreign companies dispatch one director to local company, the least capital of 600,000BRL with one permanent visa and it is required to registrar to Center Bank in Brazil. With two years of investment, if foreign companies have the plan to employ more than 10 Brazilians, one permanent visa will be issued equivalently to at least 150,000 BRL. Furthermore, there is no restriction of capital for short period work visa.


❷ Remit of capital to native land


If companies set up in Brazil don’t have the losses or list of tax and labor liability increased substantially, it is possible to remit the investment to native land. Tax at source will also not be imposed. However, if the remittance is more than the investment registered Center Bank of Mexico, the difference of registered amount and remittance will be seen capital gain and taxed by


Schedule and process of M&A



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