International Investors (institutions and individuals) are allowed to hold any asset class available to domestic investors in Brazil.

According to the CMN (Brazilian Monetary Council) Resolution 2689, since international investors are not established or resident in the country, it is necessary to hire an institution to act as:

  • Legal Representative

    Responsible to present all the registration information of the investor to the Brazilian Authorities. When the representative is an individual or a non-financial corporation, the investor must indicate a financial institution duly authorized by the Central Bank that will be jointly and severally responsible for the representative's obligation.

  • Fiscal Representative

    Responsible for taxes and fiscal issues on behalf of the investor before the Brazilian Authorities.

  • Custodian

    Responsible to hold updated reports and control all the assets of the international investor in segregated accounts, and provide this information anytime it is required, to the Authorities and to the investor.

The financial assets and securities traded as well as other forms of financial applications must be registered, held in custody or maintained in deposit accounts at an appropriated authorized institution authorized by the CVM or Central Bank.


   Choose a legal representative, a fiscal representative and a custodian. Actually, several financial institutions are authorized by the CVM and Central Bank to perform the custodian activities and can also act as investor's legal and fiscal representatives.
   The Custodian will sign a contract with the Investor and will ask for detailed information attending the Brazilian legislation of "Know your Customer".
   Apply for the investors' operational code. The Custodian is also responsible for the application of the investor's Operational Code to the CVM. In 24 hours maximum, CVM will reply with the so-called CVM Code. Simultaneously CVM will request to the IRS (Brazilian Internal Revenue Services) an investor's CNPJ ( Legal Entity Federal Taxpayer Registry).
   The funds brought into Brazil are subject to electronic registration at the Central Bank in declaratory form. The initial Electronic Declaratory Entry – RDE and subsequent updates are an obligatory requisite for movement across the foreign exchanges and must be obtained before such movements can take place. The representative is responsible for the registration of such operations.
   Choose a BOVESPA's brokerage firm that will be your representative at BOVESPA and will execute your orders.


International investments in equity instruments are tax exempt on capital gains and on CPMF. Investments from countries that do not tax income or where tax rates are lower than 20% are taxed as domestic investors. There is no minimum permanence period requirement for the investments in Brazil.


  1. Choosing a Representative
  2. Prior to starting its operations a non-resident investor must appoint one or more representatives in the Country. When such representative is an individual or a non-financial institution the investor must also appoint a financial institution or institution authorized to operate by the Brazilian Central Bank that will be jointly and severally responsible for the performance of the representative’s obligations.

    The representative does not necessarily perform the requirements of the tax legislation although in practice he may also perform such duties.




    In case of non-performance of the obligations previously provided to the representative, it will be subject to the suspension of the exercise of its duties and the non-resident investor should appoint its substitute.

    In case of omnibus account the participant non-account holder ("passenger") may appoint the same representative as the account holder signing an Adhesion Instrument to the Representation Contract thereof.

    The forms of the Representation Contract and the Instrument of Adhesion to the Representation Contract and the Representative Form are in Part II hereof.

  3. Registration with the CVM
  4. After filling out the identification form (see Part II, Item 1), the non-resident investor should, through its representative, obtain registration at the CVM. The rapplication is made electronically forwarding the following documents to the CVM at the e-mail address or fax no. (21) 3554-8370.


    b. Non-Resident Representative Identification Form;

    c. Custodian Identification Form.

    CVM will respond to the registration within 24 hours from the application made by the representative.

    In case of constitution of own or omnibus account the representative shall:

    • Inform CVM, as soon as available, the Electronic Declaratory Registration (RDE) number in the Brazilian Central Bank;
    • Forward, within 15 days after requesting the registration, a copy of the Non-Resident Investor Identification Form duly filled out and signed by the non-resident investor as well as a copy of the Representation Contract;
    • Maintain under its safeguard and whenever requested provide the CVM with the Securities Custody Contract entered into by the non-resident investor and the institution authorized by the CVM to provide such service;
    • Fill out the Non-Resident Investor Identification Form for each participant in the omnibus account and make such registrations with the CVM.

    The CVM operational code structure follows the configuration below:




    • aaaaa is the code of the representative (the same code as the local administrator);

    • bbbbbb is the account holder of the individual or omnibus account;

    • cccccc is the individual code of the non-resident investor;

    • X is 0 when an individual account or 1 in the case of omnibus account: and

    • Y is the digit for verification.

  5. Investor Classification
  6. The non-resident investor must qualify under one of the following classifications to be registered with the Central Bank and the CVM:


  7. Types of Account
  8. The non-resident investor can operate through the following types of accounts:

    a) as the Account Holder of an Own Account; or

    b) as a Account Holder of an Omnibus (Collective) Account; and/or

    c) as a Participant (passenger) in an Omnibus Account.

    The registration of own account holder enables the investor to operate in its own account. The registration of an omnibus account holder authorizes the account holder to operate both in its own name and on account of other non-resident investors admitted as participants in the omnibus account and known in the market as "passengers". Finally, the registration of an omnibus account participant is granted to the client of the omnibus account holder previously described.

    Besides investing its own funds, the Holder of an Omnibus Account has the possibility of bringing clients thus earning revenues for services provided to client participants and pro-rating the costs thereof.

    The non-resident investor may be holder and participate in one or more accounts. The holder of an omnibus account may operate its own funds in such account, as long as the registration for that purpose has been applied for in its own name.

    The registration number assigned by CVM must appear in all operations carried out in the name of each investor participating in an omnibus account or holder of own account thus allowing:

    • The identification of final investors in operations carried out; and
    • The segregation between the holder’s and each participant’s orders.

    Corporate investors under qualification or individuals under qualification may not be holders of omnibus accounts.

    Depending on the investor’s characteristics, the alternative to operate as a passenger in an omnibus account facilitates its entrance into the Brazilian capital markets. The table below sums up the advantages and disadvantages of each type of account.


    5. Types of Applications

    Non-resident investors may invest in the same products available to local investors with free transit from equity-related investments to fixed income investments and vice-versa, observing the applicable tax treatment differences.

    Financial assets and securities as well as other modes of financial operations carried out by nonresident investors resulting from applications under Resolution 2689/2000 must, according to the nature thereof:

    • Be registered, custodied or maintained in deposit account in institution or entity authorized to provide such services by the Central Bank or the CVM; or
    • Be duly registered in registration, settlement and custody systems recognized by the Central Bank or authorized by the CVM in their relevant scopes as the case of CBLC - Brazilian Clearing and Depository Corporation.

    Whenever requested, depository institutions and entities providing custody and registration should make available to the Central Bank and the CVM the registrations concerning the applications, in individualized form, by non-resident investor.


    6. Contracting and Registration with Custodian

    Non-resident investors intending to operate as account holder must sign, directly or through their representative, a contract for provision of securities custody services with an institution authorized by the CVM to provide such service. Omnibus account participants (passengers) may adhere to the custody contract of the omnibus account holder.


    The CVM Instruction 419/2005 (detailed in Item 8.1) establishes that Central Depositories, the Settlement and Clearing Houses and their respective clients may adopt the Simplified Registration form of the non-resident investor within the scope of the relationship with Global Custodians exercising the activities of custody of securities of such investors.

    A non-resident investor may be holder and participate in one or more accounts and in case it elects to maintain its securities in separate custody accounts or in more than one custodian institution, the custody contract should contain clauses providing on operational procedures for the transactions between accounts including information to be provided to the holder and representatives.

    In cases where the non-resident investor acts through a foreign institution it is admitted that the contract for provision of services of securities custody may be entered into by the foreign institution in the name of the non-resident investor, provided that, according to provision in the CVM Instruction 419/2005 the custodian institution will make sure that the non-resident investor is duly registered with the foreign institution.

    The transfer of securities between the various accounts in which the investor participates is automatic but should be informed to the CVM. Said transfer can only be made when the CVM operational code group (see Item 2) identifying the holder of funds is the same, what ensures the maintenance of ownership of the investment.

    The transfers of custody positions between non-resident investors occurred abroad resulting from merger, incorporation, split and other corporate changes as well as those resulting from causa mortis succession depend on the CVM previous authorization. The application should be accompanied by the documentation proving the event.


    7. Registration at the Central Bank

    The funds brought into the Country under terms of Resolution 2689/2000 are subject to electronic registration at the Central Bank under the electronic declaratory form. The non-resident investor’s representative will be responsible for the registration of operations.

    The initial RDE - Electronic Declaratory Registration and updates thereof are a mandatory requirement for any transactions abroad and must be obtained prior thereto. The RDE number should appear on the appropriate field of every foreign exchange contract made in the non-resident investor’s name.

    The RDE is mandatory in all applications, redemptions, earnings, capital gains, transfers and other transactions resulting from investments made under terms of Resolution 2689/2000.

    The holder of own account or omnibus account, its representative, depository institutions or entities providing registration services must provide to FIRCE – Department of Registration and Supervision of Foreign Capital of the Central Bank, whenever requested, the documentation detailing, by participant, the transactions carried out, the assets portfolio, custody transactions or any other additional information requested.

    On remittances abroad by way of earnings, repatriated capital and capital gains, the intervening bank is responsible for checking the documents to be submitted by the custodian or the non-resident investor’s representative, which must prove the distribution of earnings, the ownership and sale of assets that generate them or were sold and the due tax collection.

    8. Registration of Non-Resident Investor with Local Brokerage Firms

    Non-resident investors as well as resident investors must effectuate the registration with a local brokerage firm and keep it updated. In case of non-resident investors there are two options described below:

    1. Simplified Registration for Foreign Investor (CVM Instruction 419/2005)

      Aiming at the recognition of the existing relationship between the Local Brokerage Firm and the Foreign Intermediary as well as the flexibilization of foreign investments rules and expedition and facilitation of registration process of foreign investor in Brazil, the brokerage firms received the option to register, in simplified form, their non-resident investors, adopting for that, the rules set forth by the Stock Exchanges and entities managing the organized over-the-counter market, previously approved by the CVM.

      For the adoption of simplifi ed registration form the non-resident investor shall be a client of a foreign intermediary institution where the investor must be properly registered under the applicable legislation in the country of origin thereof. Besides, the foreign intermediary shall assume, before the local broker, the obligation to submit, duly updated and whenever requested, the following information:

      • All information required by the CVM on the registration of investors within the stock exchange scope; and
      • Other information required by Brazilian public bodies with supervision powers.

      For adoption of simplified registration, the foreign intermediary institution’s country of origin can neither be assessed as a high-risk country in terms of money laundering and terrorism financing nor considered as a non-cooperating country with international bodies in combating those. Besides the regulating body of the capital market of the country of origin of the foreign intermediary institution must have entered into with the CVM a mutual cooperation agreement enabling the interchange of investors’ financial information.

      The local broker shall set forth the criteria allowing for the assessment of the foreign intermediary institution’s degree of reliability by adopting measures that will ensure that the client’s registration information will, whenever requested, be readily provided by the foreign institution. The local broker shall also assure that the foreign institution adopts the appropriate practices of client identification and registration according to the applicable legislation in the country of origin where such institution is located.

      It is forbidden to any local brokerage fi rm the use of simplifi ed registration to its clients acting through foreign intermediaries that will have defaulted the obligation to provide information on non-resident investors.

      Stock Exchanges and entities managing the over-the-counter market shall maintain at the CVM’s disposal an updated list of contracts entered into by foreign intermediaries and brokers subject to self-regulation thereof.



    2. Registration for Foreign Investor (CVM Instruction 387/2003)

      Brokerage firms not electing the Simplified Registration provided for in CVM Instruction No.419/2005 or not complying with requirements set forth by such Instruction shall register their non-resident investors according to the rules in CVM Instruction No. 387/2003.

      According to such Instruction, brokers should effectuate the registration of their clients and keep them updated and should further provide to Stock Exchanges and the Settlement and Clearing Houses according to standard defined thereby, such basic registration data of each client in order to enable their perfect identification and qualification.

      The registration should also contain the names of persons authorized to issue order and as the case may be, of the managers of the institution or those in charge of managing the portfolio as well as the legal representative or the person responsible for the custody of the securities thereof.

      The registration file should contain at least the information provided in CVM Instruction No. 301/1999 (Article 3, § 1) a regulation that addresses the combat to money laundering crimes (Law No. 9613/1998).

      In case of institutional clients or financial institutions, the lack of signature in the registration card is admitted up to twenty (20) days counting from the first operation ordered by such clients.

      Brokers can only make changes in the address appearing in the registration file upon the client’s express and written order accompanied by the relevant proof of address.

      Brokers must enforce appropriate control procedures to prove the service as required for the regular registration of their clients. Furthermore they should maintain in their corporate office or in the headquarters of the financial group of which they are part and at the disposal of the CVM, stock exchanges and clients for the period of five (5) years, counting from the date of operations:

      1. All documents related to operations with securities; and

      2. In case of existing Recording System, the entirety of recordings of all dialogs between clients, broker and their trade operators.

      The submission of the respective images instead of original documents made through scanning system is admitted.

    9. Portfolio Monitoring and Inspection

    The representative shall submit to the CVM, monthly, by the fifth business day of the following month, through electronic medium, such information referring to non-resident investors’ accounts according to the database structure and programs provided by the CVM. Such information should be maintained available to the Central Bank.

    All depositary and custodian institutions should also provide whenever requested to Central Bank and the CVM such records referring to applications by investor.

    The CVM charges a portfolio monitoring fee from own and omnibus accounts (Law 7940/1989), to be collected quarterly by the representative. The calculation basis is the portfolio net worth value calculated on December 31 of the previous year.


    Non-resident investors are forbidden to acquire or sell:

    • Securities of publicly listed companies by other means than the trade at the stock exchanges, electronic systems or organized over-the-counter market authorized by the CVM;
    • Securities traded in non-organized over-the-counter markets or organized by entities not authorized by the CVM;
    • Securities of closely held companies (permitted indirectly only via quotas of the CVM-registered investment which regulation considers them).

    The above prohibitions do not apply to cases of subscriptions (of securities and closed investment fund quotas), bonuses, conversion of debentures into shares, indexes referenced in securities, acquisition and sale of open investment fund quotas and with CVM authorization, cases where the capital is going private, cancellation or suspension of negotiation, court transactions and trading of shares bound to shareholders’ agreements.

    Any references or assignments of ownership abroad of investments or securities owned by nonresident investor are forbidden, and in the Country in other forms than those established in Resolution 2689/2000. This prohibition does not apply to cases of transfer resulting from merger, incorporation, split and other corporate changes made abroad as well as the cases of hereditary succession observing the regulation issued by the Central Bank of Brazil and CVM.

    It is forbidden to make any transfer of funds brought into the country under Law 4131/1962 (foreign direct investment and foreign indebtedness) or under Circular 3280/2005 (foreign exchange operations applicable to non-resident accounts) into the mechanism provided for in Resolution 2689/2000 and vice-versa.


    11. Taxation

    Non-resident investors shall appoint a Central Bank authorized institution as responsible in the Country for the performance of tax obligations resulting from its operations.

    1. Income Tax (IR)

      1. Non-resident investors carrying out financial operations in Brazil according to rules and conditions set forth by the National Monetary Council (CMN) shall comply with tax rules especially provided in the following regulations:

        • Law No. 8981 of 20/01/95 (Article 81)
        • SRF Declaratory Act No.60 of 03/08/00
        • SRF Regulatory Instruction No.25 of 06/03/01
        • Provisional Act No. 2158-35 of 24/08/01
        • Provisional Act No. 2189-49 of 24/08/01
        • SRF Regulatory Instruction No. 188 of 06/08/02
        • SRF Regulatory Instruction No. 208 of 27/09/02
        • SRF Regulatory Instruction No.487 of 30/12/04

        Earnings received by non-resident investors admitted under terms of Resolution No. 2689/2000 are subject to income tax at the following tax rates:


        (Funds brought in under CMN Resolution No. 2689/2000)

        In cases of taxation, the income tax calculation basis as well as the timing of its applicability on earnings received by non-resident investors complies with rules applicable to earnings of same nature received by investors resident in Brazil. Exceptions are the applications in investment funds where the income tax solely applies to the redemption of quotas.

      2. Non-resident investors carrying out financial operations in Brazil in other form than the provision in Resolution No. 2689/2000 and foreign investors from a country that has no income tax or has income tax at a rate below 20% (the list of such countries is in SRF Regulatory Instruction 188/2002 appearing in Part III hereof) are equivalent to the resident investors for purposes of Income Tax applicability especially observing the rules contained in the following regulations:

        • Law No. 8981 of 20/01/95 (Article 78)
        • SRF Regulatory Instruction No. 25 of 06/03/01
        • SRF Regulatory Instruction No. 208 of 27/09/02
        • Law No. 11.033 of 21/12/04

        Earnings received by such non-resident investors are subject to income tax at the following tax rates.


        Income tax at source, at tax rate of 0.005% (Article 10 of Regulatory Instruction 487/2004) will be applied to operations carried out at stock exchanges by such non-resident investor as a pre-payment.

        The transfer of domicile of non-resident investors resulting from applicable tax regime must be submitted to the CVM by sending of documentation proving the event issued by an official registration body. The CVM will answer with an Official Letter with retroactive effect to the event date.

    2. Tax over Financial Transaction (IOF)

      Non-resident investor’s investments are subject to IOF taxation upon the entrance of funds in the Country at a rate varying from 0% to 25%. The tax calculation basis is the amount in national currency received delivered or made available, corresponding to the amount in foreign currency of the foreign exchange operation.

      For non-resident investors the current IOF rate is zero for applications in fixed income funds and investments in securities and portfolios.


    Source: Brazilian Stock Exchange (Bovespa)