ANNOUNCEMENT 05 Feb 2014In February 2014, the government of Brazil announced changed rules for foreign investors.
NUMBER OF INTERVENTIONS
Lexology. (2014). Updating the rules on foreign investments in Brazil. Available at http://www.lexology.com/library/detail.aspx?g=12b0ef28-2ae1-4767-9c7a-c3fec67b97ab
Banco Central do Brasil. (2014). Public hearing notice No. 43/2014 of 5 February 2014. Available at https://www3.bcb.gov.br/audpub/Anexos/Download?caminho=/editais/edt_58/EditalAudienciaPublica43.pdf
On 5 February 2014, the Central Bank of Brazil (BCB) initiated a public hearing of a draft resolution, updating the rules for non-resident investments in the Brazilian financial and capital markets. The public hearing lasts until mid April and the definitive reform of the rules should be finished by the end of 2014.
The changes aim at: 1) streamlining foreign exchange rules applicable for foreign investments (currently managed by Resolution 2689/2000); 2) introducing new mechanisms to increase foreign investment in Brazil.
Most important change of the proposed reform:
New rules for representation. Foreign investors need to be represented by a Brazilian financial institution or by a foreign entity authorized to operate within Brazil by the BCB. Furthermore, their corporate documents must contain the representation powers of the institutions, including updated records, rendered information for the BCB and the Brazilian Securities Commission (CVM). In addition, investors need to keep track of inflows and outflows on an individual basis, safe keep documents and be able to receive services of processes or notices on behalf of the foreign investor.