Brazilian law offers several vehicles for conducting business. The two principal forms are:

• the sociedade limitada (Ltda), which is governed by the Civil Code and is commonly used for closely held businesses, joint ventures and Brazilian subsidiaries of foreign groups, as its governance is simple and customisable through the articles of association and shareholders’ (or quotaholders’) agreements; and
• the sociedade anônima (S.A.), which is governed by the Corporations Law and can be private or publicly held. It is generally preferred where the business needs more sophisticated capital and governance arrangements, including different classes of equity securities, debenture issuances, broader investor participation or capital markets access.

Both may be incorporated and operate with a single shareholder.

Other forms, including partnerships, exist but are less common due to their governance features and, in some cases, partners’ exposure to personal liability. Entities engaged in intellectual professions of a scientific, literary or artistic nature, such as law firms, are subject to specific regimes and may not operate as Ltdas or S.A.s; their members may therefore be held liable if the entity lacks sufficient assets.

The choice between Ltda and S.A. is driven mainly by:

• governance requirements;
• fundraising plans;
• regulatory constraints;
• transfer and exit mechanics;
• administrative costs; and
• tax considerations.

Shareholders’ liability in both structures is generally limited to subscribed capital, although shareholders and managers may be exposed exceptionally under specific statutory rules or where the corporate veil is pierced. Certain regulated activities may also require a specific corporate form.

Incorporation generally requires execution of the organisational documents – the contrato social for a Ltda or estatuto social for an S.A. (similar to articles of incorporation or association) – and registration with the competent State Commercial Registry (Junta Comercial). The company must also obtain a Cadastro Nacional de Pessoas Jurídicas (CNPJ) taxpayer registration and, depending on its activities, state or municipal registrations and operating or sector-specific licences. Most filings are electronic, and processing times vary by state and filing complexity; straightforward incorporations can often be completed within five to ten business days once documentation is in order.

Foreign shareholders or quotaholders must appoint a representative resident in Brazil and comply with the applicable foreign investment registration and reporting framework. Since the modernisation of the Central Bank’s regulations, foreign direct investment has been reported through the SCE-IED electronic system, subject to applicable events and thresholds.

Ongoing compliance includes:

• maintaining corporate books and records;
• holding an annual shareholders’ or quotaholders’ meeting within the statutory period to approve management accounts and financial statements; and
• registering amendments, management changes and other corporate acts with the Commercial Registry.

S.A.s are subject to additional requirements regarding corporate books, financial statements and, where applicable, publication. Publicly held companies are also subject to the periodic and event-driven disclosure regime of the Comissão de Valores Mobiliários (CVM).

Creating, issuing or altering a Brazilian company’s share capital generally requires a shareholders’ or quotaholders’ resolution amending the relevant contrato social or estatuto social (articles of association or by-laws).

For an S.A., the estatuto social may set an authorised capital limit within which the board may approve increases without further by-law amendment; increases beyond that limit generally require shareholder approval. Shares may have par value or no par value, but not both at once. Contributions may be made in cash or in assets capable of valuation, with in-kind contributions subject to the statutory appraisal procedure.

S.A.s may issue common and preferred shares. Preferred shares may carry economic preferences, such as priority in dividends or capital reimbursement, and may have restricted voting rights, subject to mandatory statutory protections. Non-voting or restricted-voting preferred shares may not generally exceed 50% of total issued shares. Closely held S.A.s have greater flexibility in creating share classes, whereas publicly held companies must also consider CVM regulations, B3 rules and minority protection requirements.

Ltdas may not have authorised capital, although preferred quotas – similar to preferred shares in an S.A. – are permitted. A Ltda’s articles may provide for different classes of quotas and differentiated economic or political rights, subject to mandatory law and, where the Corporations Law applies supplementarily, its relevant rules.

In both Ltdas and S.A.s, the rights, privileges and restrictions attached to each class of shares or quotas – including rights of first refusal, tag-along, drag-along and other transfer restrictions – are key to the governance framework and can significantly affect control allocation and minority protections.

For S.A.s, dividends are paid from profits determined under the Corporations Law and the company’s financial statements. The by-laws normally set the mandatory dividend; if not, the statutory rule generally entitles shareholders to 50% of adjusted net income. Payment may be withheld where incompatible with the company’s financial condition, and interim dividends may be declared when statutory and by-law requirements are met.

Ltdas offer greater flexibility. Unless the articles provide otherwise, profits and losses are allocated proportionally, but a properly approved resolution may allow disproportionate distributions, provided no quotaholder is excluded from profits altogether. Distributions must be supported by available profits; unlawful distributions may give rise to restitution and officer liability.

An S.A. may acquire its own shares subject to the Corporations Law and, for publicly held companies, CVM rules on treasury shares, reserves and equal shareholder treatment. Shares may also be redeemed, amortised or cancelled, as permitted by law. A capital reduction returning capital to shareholders is generally subject to a 60-day creditor opposition period.

A Ltda may reduce capital to absorb irreparable losses or where capital is excessive for its purpose; a reduction for excess capital requires publication and a 90-day objection period for unsecured creditors. Brazil has no general financial assistance prohibition, but capital maintenance, fiduciary duty, conflict-of-interest and insolvency rules may constrain acquisition financing involving the target.

Brazil does not maintain a general public register of beneficial owners or “control persons” for private companies. Corporate ownership information is nevertheless recorded through the relevant corporate registrations, and Brazilian tax rules require entities within the scope of the CNPJ regime to provide ultimate beneficial owner (UBO) information to the Federal Revenue Service, subject to statutory exemptions and the applicable criteria for identifying the individual who ultimately owns, controls or exercises significant influence over the entity. This information is not generally maintained in a public UBO register.

Additional identification and record-keeping obligations apply in regulated sectors under anti-money laundering (AML) and know-your-customer (KYC) rules. Publicly held companies are subject to separate CVM disclosure requirements regarding controlling shareholders, management and holders of relevant equity interests; see 5.4 Shareholder Disclosure.

Corporate governance in Brazil is governed primarily by the Corporations Law (Law 6,404/1976) for S.A.s and the Civil Code (Law 10,406/2002) for Ltdas. Publicly held corporations are also subject to the Securities Law (Law 6,385/1976) and CVM regulations, including Resolution 80 on issuer registration and disclosure. Companies listed in B3’s special segments, such as Novo Mercado and Level 2, must also comply with the relevant B3 listing regulations, which impose enhanced requirements on governance, minority protections, board composition, disclosure and dispute resolution.

Best-practice guidance is strongly influenced by the Brazilian Institute of Corporate Governance’s Code of Best Practices for Corporate Governance and the Brazilian Corporate Governance Code for Listed Companies, which operates on an “apply or explain” model.

Market participants are also subject to ANBIMA’s self-regulatory codes covering public offerings, fund distribution, asset management and other capital market services. These codes are contractual and applicable mainly to adherents, but they establish governance, conduct and investor protection standards that are widely observed in the Brazilian market.

These non-statutory standards are frequently considered by boards, controlling shareholders and institutional investors when designing governance arrangements, even where not legally mandatory.

Directors and officers of an S.A. owe statutory duties under the Corporations Law, including duties of care, loyalty and confidentiality, as well as duties to act within the company’s purpose and avoid conflicts of interest. They must act in the company’s interest and may not subordinate it to a controlling shareholder, the shareholder who elected them or any third party.

The CVM and courts tend to focus on the integrity of the decision-making process and generally afford greater deference to informed, good-faith, disinterested business decisions.

A manager is generally not personally liable for obligations regularly undertaken on the company’s behalf, but may be liable for losses caused by negligence, wilful misconduct or breach of the law or by-laws. Liability can also arise under specific tax, labour, environmental, consumer, insolvency and regulatory regimes, each with its own requirements distinct from the general veil-piercing test under Article 50 of the Civil Code.

D&O insurance and contractual indemnification are common, particularly in larger and listed companies, but remain subject to public policy and corporate law limits, and should not insulate managers from consequences for fraud or wilful misconduct.

Under the Corporations Law, a board of directors is mandatory for publicly held S.A.s and S.A.s with authorised capital, and optional for most closely held S.A.s; where established, it must have at least three members. Board members need not reside in Brazil, but non-resident directors must appoint a Brazil-based representative. Ltdas are not generally required to have a board and may be managed by one or more officers, although more sophisticated Ltdas often create boards or advisory bodies by contract.

There is no general statutory independence requirement for private companies, but listed issuers are subject to CVM disclosure requirements and applicable B3 rules. Under Novo Mercado, the board must have at least two independent directors or 20% independent directors, whichever is greater, and the chair and CEO roles are generally separated.

Brazilian best practice goes beyond minimum requirements. Larger companies increasingly:

• use a skills matrix;
• seek meaningful independent representation;
• separate the chair and CEO roles;
• establish audit and other committees;
• conduct periodic evaluations; and
• adopt succession and conflict-of-interest policies.

Diversity in gender, professional background and experience is increasingly treated as part of board effectiveness, and is reflected in the disclosure framework for listed issuers.

Brazil has no single ESG statute. ESG-related obligations arise from corporate, securities, environmental, labour, consumer, anti-corruption and sector-specific rules, while listed issuers face progressively more detailed sustainability disclosures. CVM Resolution 193 introduced sustainability-related financial disclosure based on ISSB standards, incorporated in Brazil through the Comitê Brasileiro de Pronunciamentos de Sustentabilidade (CBPS – Brazilian Sustainability Pronouncements Committee) standards.

In May 2026, CVM Resolution 244 removed the previously scheduled mandatory adoption of International Sustainability Standards Board (ISSB) reporting and retained a voluntary regime. Entities that opt to report must comply with the applicable CBPS/ISSB standards and, from 1 January 2026, obtain reasonable assurance from a CVM-registered auditor. From 2027, a listed company opting not to report must disclose and justify that decision via market announcement.

The Corporations Law does not create a standalone duty to maximise an ESG metric. Directors must pursue the company’s interests and observe its corporate purpose and social function, while environmental, labour, consumer and other mandatory regimes may make ESG-related risks directly relevant to board duties.

Best practice allocates responsibility for material ESG risks at board or committee level, integrates them into strategy and enterprise risk management, establishes reliable internal controls over sustainability data, and ensures external statements are supported by verifiable information, particularly given growing scrutiny of greenwashing.

Brazilian corporate law requires managers to disclose conflicts of interest and, where conflicted, to abstain from the relevant decision. The Corporations Law also restricts abusive control by a controlling shareholder and requires transactions involving managers, controlling shareholders or other related parties to be conducted in the company’s interests and through appropriate corporate procedures. A transaction breaching these duties may expose the responsible persons to liability and, depending on circumstances, may be challenged or annulled.

For listed companies, related-party transactions are also subject to CVM disclosure requirements and the company’s internal governance policies; B3’s special segments may impose additional standards. In practice, material related-party transactions are commonly reviewed by disinterested directors or a dedicated committee, with independent advice where appropriate.

The approval route depends on the transaction, the company’s governance documents and the nature of the conflict, and material transactions involving listed issuers may require specific market disclosure.

Shareholders of an S.A. have statutory rights that include:

• participation in profits and in the company’s assets on liquidation;
• supervision of management;
• pre-emption rights in the circumstances prescribed by law;
• voting rights attached to their shares; and
• withdrawal rights in specified fundamental transactions.

Shareholders with voting rights vote on matters reserved for the general meeting, including:

• amendments to the by-laws;
• the election and removal of directors, where applicable;
• the approval of annual accounts; and
• specified reorganisations.

The Corporations Law also grants information, meeting-convocation and board-election rights to minority shareholders once the relevant statutory thresholds are met.

Statutory remedies include:

• actions to annul unlawful shareholder resolutions;
• claims against managers and controlling shareholders;
• derivative actions for losses caused to the company; and
• appraisal or withdrawal rights in the situations provided for by law.

Minority shareholders may also use statutory mechanisms for cumulative or separate board elections and, in appropriate circumstances, seek urgent judicial relief.

Quotaholders of a Ltda have analogous core rights under the Civil Code, including:

• participation in profits;
• voting on matters reserved for quotaholders;
• access to accounts and information;
• pre-emption rights on capital increases; and
• the right to challenge unlawful resolutions.

The precise voting thresholds and shareholder rights depend significantly on the articles of association, including rules on the transfer of quotas, the exclusion of quotaholders, withdrawal and dissolution, which makes careful drafting particularly important in closely held companies.

Shareholders’ agreements are expressly regulated by Article 118 of the Corporations Law and are widely used to govern:

• voting arrangements;
• transfer restrictions;
• pre-emption, tag-along and drag-along rights;
• reserved matters;
• board nomination rights;
• deadlock procedures; and
• exit mechanisms.

When an agreement concerning Article 118 matters is filed at the company’s registered office, the company must observe it, and votes cast in breach of it may be disregarded under the statutory mechanism; specific performance is expressly available.

Ltdas also make extensive use of quotaholders’ agreements, which are enforceable principally under the Civil Code, the articles and general contract law; where the articles adopt the Corporations Law supplementarily, Article 118 may also apply. For enforceability against the company, key governance and transfer provisions are commonly reflected in the articles and formally acknowledged by the company.

Shareholder and quotaholder disputes are frequently submitted to arbitration where the governing documents contain a valid clause; arbitration is mandatory for companies listed in certain B3 segments.

Judicial remedies remain available where arbitration does not apply, including:

• specific performance;
• interim relief;
• annulment of resolutions;
• damages claims;
• manager liability claims; and
• in closely held companies, partial dissolution recognised by the Civil Code and case law.

Brazil has no single statutory “oppression remedy”; minority protection is instead provided through these mechanisms.

Brazilian M&A is governed by the Corporations Law, the Civil Code, the Competition Law and, for listed companies, CVM and B3 rules; sector-specific approvals may also apply.

Private acquisitions are primarily contractual, while corporate reorganisations – mergers (incorporação), spin-offs (cisão) and share-for-share mergers (incorporação de ações) – follow statutory procedures. Brazil has no general court-sanctioned scheme of arrangement comparable to common law jurisdictions.

The most common private structures are:

• purchases of shares or quotas;
• asset or business acquisitions;
• primary investments through capital increases;
• joint ventures; and
• combinations via statutory reorganisations.

The choice depends on tax treatment, succession of liabilities, licences, financing, minority rights and regulatory approvals. Transactions frequently use earn-outs, deferred consideration, escrow or holdback arrangements and indemnification mechanisms to allocate risk.

Public company transactions are subject to the Corporations Law and CVM rules on disclosure, tender offers and shareholder protection. A change of control generally triggers a mandatory tender offer under Article 254-A, entitling non-controlling voting shareholders to at least 80% of the price paid for control-block shares.

Delisting and other statutory tender offers are governed by CVM Resolution 215, effective since 1 October 2025, which consolidated the tender offer framework.

Merger clearance from the Administrative Council for Economic Defence (Conselho Administrativo de Defesa Econômica, or CADE) is suspensory once thresholds are met, and regulated businesses may need approvals from authorities such as the Central Bank, the National Electric Energy Agency (ANEEL), the National Telecommunications Agency (ANATEL), the National Supplementary Health Agency (Agência Nacional de Saúde Suplementar, or ANS) or the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis, or ANP), making conditions precedent and regulatory risk allocation central to transaction documents.

Recent developments have been predominantly regulatory: CVM Resolution 215 modernised the tender offer regime, while CADE refines its approach to gun-jumping and pre-closing coordination.

Public court decisions on sophisticated private M&A disputes are comparatively limited given the wide use of arbitration; where disputes reach the courts, case law generally gives significant weight to the risk allocation negotiated by sophisticated parties, subject to mandatory law and good faith.

Brazilian capital markets are primarily regulated by the Securities Law (Law 6,385/1976), the Corporations Law and CVM regulations. The CVM is the principal securities regulator, while B3 operates the main organised markets and imposes listing and self-regulatory requirements. The Central Bank and other authorities may also have jurisdiction, depending on the issuer, intermediary or instrument.

Public offerings are principally governed by CVM Resolution 160, which provides ordinary and automatic registration procedures. The applicable procedure depends on the security type, the issuer’s registration status and the target investor base. A prospectus and other offering materials are required, as prescribed by CVM Resolution 160. Automatic registration may be obtained without prior substantive CVM review once requirements are met, whereas the ordinary procedure is subject to CVM review and can take longer for first-time equity issuers.

An IPO also requires registration as a publicly held company with the CVM and compliance with B3’s listing requirements. Companies electing a special B3 segment, such as Novo Mercado, assume governance obligations beyond securities law, including board composition, free float, disclosure and arbitration rules.

CVM Resolution 160 sets differentiated requirements by security type, issuer and investor base, including offerings to professional or qualified investors where prior CVM review is not required. These are not blanket exemptions: eligibility, disclosure and trading rules vary by route and security.

Offerings by qualifying small businesses through electronic participatory platforms, without registration, are governed separately by CVM Resolution 88. Securities under either regime may carry eligibility or trading restrictions; non-compliance may result in CVM enforcement, suspension or administrative sanctions.

Publicly held companies are subject to periodic and event-driven disclosure under CVM Resolution 80 and the material fact regime under CVM Resolution 44. A material act or fact capable of influencing the price of securities, an investor’s decision to buy, sell or hold them, or the exercise of rights attached to them must be disclosed to the market through the applicable official systems. The investor relations officer is responsible for the disclosure, without prejudice to the duties imposed by law and regulation on controlling shareholders, shareholders, directors, officers, members of the fiscal council and members of other technical or advisory bodies.

Disclosure of a material act or fact may exceptionally be withheld where the controlling shareholders or management reasonably consider that publication would jeopardise a legitimate corporate interest, but only while confidentiality is preserved. The information may remain confidential only while secrecy is preserved. If the information escapes the company’s control or if atypical movements occur in the price or trading volume of the issuer’s securities or related instruments, the material act or fact must be disclosed immediately.

Periodic obligations include annual and interim financial information, the reference form and other corporate, governance and meeting materials prescribed by CVM regulations. Listed companies must also comply with B3 disclosure rules applicable to their listing segment.

Insider trading, market manipulation and other abusive practices are prohibited under the Securities Law and CVM regulations, particularly CVM Resolution No 44. Trading while in possession of material non-public information may give rise to administrative liability and, where the statutory elements are met, criminal liability under Article 27-D of Law No 6,385/1976. The rules apply not only to formal corporate insiders but also, depending on the facts, to persons who obtain privileged information and know or should know that it is confidential and material.

The CVM has broad supervisory, investigative and sanctioning powers, including the authority to:

• investigate trading activity;
• commence administrative enforcement proceedings;
• impose fines and restrictions or disqualifications; and
• enter into settlement agreements where legally appropriate.

Conduct amounting to a criminal offence may also be referred to the Public Prosecutor’s Office, and affected investors may pursue civil remedies where the requirements for liability are met.

CVM Resolution No 44 requires a direct or indirect shareholder, or a group of shareholders acting together or representing the same interest, to disclose the acquisition or disposal of a relevant participation in a publicly held company. As a general rule, disclosure is triggered when the position reaches or crosses 5% of a class or type of shares and upon each subsequent 5% increase or decrease. The disclosure must include the information prescribed by the regulation, including the purpose of the participation and relevant agreements or instruments affecting the securities.

The regime also takes into account certain rights over shares and derivative instruments for the purposes of calculating and disclosing relevant positions. Controllers, directors, officers and members of specified corporate bodies are subject to additional periodic disclosure rules concerning their holdings of and transactions in the issuer’s securities and related instruments.

Failure to comply may result in administrative enforcement proceedings and sanctions by the CVM, and may create disclosure, governance and transactional risk, particularly in takeover or change-of-control situations. Separate, more granular reporting requirements apply during certain public tender offers under CVM Resolution No 215.

Brazil does not impose a single internal control framework on all companies; requirements vary according to a company’s type, size and regulated activity. Publicly held companies are subject to CVM governance and disclosure requirements, while financial institutions, insurers and other regulated entities are subject to sector-specific risk management, compliance and internal control requirements.

The Anti-Corruption Law (Law No 12,846/2013) and Decree No 11,129/2022 do not make a compliance programme universally mandatory, but an effective integrity programme is an important mitigating factor in enforcement and leniency contexts.

Decree No 11,129/2022 identifies the factors used to assess an integrity programme, including:

• senior management commitment;
• standards of conduct;
• risk assessment;
• training;
• third-party diligence;
• accounting controls;
• procedures for interactions with public authorities;
• reporting channels and measures to protect good-faith reporters;
• disciplinary measures; and
• continuous monitoring.

Regulated sectors may impose more specific reporting channel or escalation requirements.

As a matter of governance practice, companies commonly allocate compliance oversight to senior management with reporting access to the board of directors or an audit or compliance committee, maintain confidential reporting channels, establish investigation and anti-retaliation procedures, perform periodic risk assessments and monitor remediation efforts.

The design of the compliance framework should be proportionate to the company’s size, sector, geographic footprint and exposure to public authorities and regulated activities.

Legal Framework and Forms of Security Available in Brazil

Secured transactions are principally governed by:

• the Civil Code;
• the Code of Civil Procedure;
• the Public Registries Law (Law 6.015/1973);
• the Bankruptcy and Judicial Reorganisation Law (Law 11,101/2005);
• the fiduciary ownership of real estate law (Law 9,514/1997); and
• the Corporations Law (Law 6,404/1976).

The principal security interests are:

• mortgages over real estate;
• pledges over movable assets, shares, quotas and financial instruments;
• fiduciary transfers of movable and immovable assets; and
• fiduciary assignments of receivables.

Financing structures also commonly include personal guarantees, particularly sureties (fianças) and avals.

Fiduciary security transfers defeasible ownership to the secured creditor until the obligations are discharged, and is generally preferred as it facilitates enforcement and offers stronger insolvency protection: fiduciary collateral is generally excluded from the debtor’s estate, although measures selling essential capital assets may be suspended during the statutory stay period.

Requirements for Creating, Enforcing and Ranking Security Interests

Security documents must adequately identify the secured obligations and collateral, which may cover present and future obligations, including third-party obligations, if sufficiently described.

Mortgages and fiduciary transfers of real estate must be registered with the competent Real Estate Registry. Security over movable assets and receivables is generally registered with the Registry of Deeds and Documents, while specific assets may require registration with specialised registries. Security over shares and quotas should be recorded in the corporate books and, where applicable, filed with the Commercial Registry, and receivables assignments should be notified to the debtors in order to bind them.

Perfection requirements are generally necessary for third-party effectiveness and priority, which follows the order of filing, subject to statutory preferences and insolvency law. Intercreditor agreements regulate creditors’ contractual rights but do not alter priority against third parties.

Traditional pledges are generally enforced judicially, unless an extrajudicial sale is contractually and legally permitted. Mortgages may be enforced judicially or extrajudicially under Law 14,711/2023. Fiduciary security may also benefit from statutory extrajudicial procedures, including consolidation of title, repossession and sale, subject to applicable rules on default, notice, registration, valuation and sale.

Acquisition Financing and Security Packages

Acquisition financings commonly combine security from the acquisition vehicle with guarantees from other group companies, including:

• pledges or fiduciary transfers over the vehicle’s shares or quotas and, post-completion, the target’s;
• assignments of receivables and material contract rights;
• controlled accounts and cash sweeps; and
• security over material assets.

Brazilian law imposes no general prohibition on financial assistance by non-regulated companies, but upstream, downstream and cross-stream guarantees must be assessed against corporate authority, purpose, directors’ duties and insolvency risk. A company may not accept its own shares as collateral except to secure its officers’ management.

In syndicated financings, a security agent commonly holds and administers the security. Intercreditor agreements regulate voting, enforcement control, standstill arrangements, subordination and distribution of proceeds, co-ordinated with perfection and registration, since contractual subordination alone does not determine priority against third parties.

Recent Legislative Developments

Law 14,711/2023 (the Legal Framework for Guarantees) is the principal recent development. It expressly recognised security agents, expanded successive fiduciary security over real estate, permitted existing mortgages to secure new obligations to the same creditor, and expanded extrajudicial enforcement for mortgage-backed and fiduciary security claims. The reforms have increased structuring flexibility and strengthened out-of-court enforcement, particularly in syndicated financings, although their effectiveness remains subject to statutory requirements and to interpretation by registries and courts.

Brazilian commercial contracts are primarily governed by the Civil Code (Law No 10,406/2002), the main principles of which are freedom of contract, the binding force of agreements, objective good faith and the social function of contracts. Contracts are presumed to involve parties on an equal footing, and courts should respect the agreed allocation of risks. Judicial revision is exceptional and limited.

A valid contract mainly requires:

• legally capable parties;
• valid consent;
• a lawful and possible subject matter that is determined or determinable; and
• compliance with a mandatory form, where applicable.

Consideration is not a general requirement. Most commercial contracts do not require a particular form, and electronic contracting is generally recognised upon the establishment of consent, authorship and document integrity. Specific transactions – including copyright assignments and certain real estate dealings – require additional formalities (Articles 104 and 107–108 of the Civil Code and Article 10 of Provisional Measure No 2,200-2/2001).

Contracts are interpreted according to the parties’ expressed intention, good faith, commercial practices, subsequent conduct and the transaction’s economic purpose. Good faith requires disclosure, co-operation and consistent conduct throughout the contractual relationship. Clear drafting of deliverables, dependencies, acceptance criteria and risk allocation therefore materially improves enforceability.

Invalidity may arise from:

• an unlawful subject matter;
• incapacity;
• failure to observe essential formalities;
• sham transactions or defects such as material mistake;
• fraud;
• duress; and
• gross disparity arising from urgent need or inexperience.

Negotiated liability limitations are generally permissible, subject to mandatory rules and scrutiny for abuse; unequal bargaining power alone does not invalidate them. Consumer contracts and adhesion contracts receive additional protection, including controls on unfair terms and advance waivers of essential rights (Articles 138–171 and 423–424 of the Civil Code).

A party affected by a breach may seek performance or termination, together with recoverable damages. Courts may order delivery, performance or the cessation of prohibited conduct, supported by interim relief and coercive fines. Damages generally cover actual losses and reasonably established lost profits, subject to causation and proof; an ordinary breach does not automatically justify moral damages. Contractual penalties may be enforced without proof of actual loss but cannot exceed the principal obligation, and can be reduced in the event of partial performance or manifest excess. Additional damages generally require an express contractual reservation and proof of the excess.

Contracts may end through expiry, mutual agreement, permitted unilateral notice or a sufficiently serious breach. Termination must comply with applicable notice and cure requirements, and substantial investments may postpone the effectiveness of termination without cause. Wrongful termination may trigger damages, penalties or the temporary preservation of the relationship. Fixed-term service contracts require particular attention, as Article 603 of the Civil Code may apply between legal entities, providing for the payment of compensation already due, plus half of the compensation payable until the agreed end date.

Force majeure and fortuitous events generally exclude liability for losses resulting from effects that could not be prevented or avoided, unless the affected party assumed the relevant risk. They do not automatically terminate the agreement nor excuse unaffected obligations (as per Article 393 of the Civil Code). Hardship provisions allow exceptional judicial adjustment or termination where supervening circumstances satisfy the applicable requirements (Articles 317 and 478–480 of the Civil Code). Frustration of purpose concerns the loss of the contract’s objectively identifiable purpose despite performance remaining possible. Although not expressly regulated as a standalone doctrine in the Civil Code, its recognition is supported by non-binding Federal Justice Council Statement No 166, based on Article 421.

Commercial transactions involving intellectual property are principally governed by the Industrial Property Act (Law No 9,279/1996), the Copyright Act (Law No 9,610/1998) and the Software Act (Law No.9,609/1998). Agreements should distinguish assignments (which transfer ownership) from licences (which authorise specified uses). The essential terms include:

• the protected assets;
• territory;
• duration;
• exclusivity;
• sublicensing;
• improvements; and
• rights following termination.

Patent and trade mark transactions may require registration with the INPI to produce effects against third parties. Copyright assignments must be in writing and are interpreted restrictively; payment for a deliverable does not itself transfer all economic rights. Moral rights are generally non-transferable and non-waivable, subject to the specific software regime. Trade secrets depend on confidentiality obligations, effective access controls and unfair competition protection.

Ownership of newly created intellectual property depends on the applicable statutory regime and contractual arrangements. Employment-related inventions and software developed within assigned duties generally belong to the employer or commissioning party under the relevant statutory conditions. Other commissioned copyright works do not follow a universal automatic transfer rule. Joint development agreements should expressly allocate pre-existing assets, new results, improvements and exploitation rights.

AI-generated content remains an area of uncertainty. Brazilian copyright law centres authorship on natural persons, making an identifiable human creative contribution relevant to protection. Contractual permission to use an output does not itself establish copyright, originality or exclusivity. Agreements should address authorised inputs, confidentiality, human review and infringement responsibility.

Statutory remedies for infringement of intellectual property include:

• injunctions;
• seizure or removal of infringing material;
• damages; and
• for specified conduct, criminal sanctions.

Lost profits in industrial property cases may be assessed through the injured party’s lost benefits, the infringer’s benefits or a hypothetical licence fee, applying the most favourable statutory criterion rather than cumulatively.

The Consumer Protection Code (CDC, Law No 8,078/1990) establishes mandatory rules governing consumer relationships, supplemented by sector-specific legislation and the e-commerce rules set out in Decree No 7,962/2013. Together, they establish mandatory protections that prevail over conflicting contractual terms. Unfair practices and abusive clauses are prohibited. Contractual labels cannot exclude the CDC where its substantive requirements apply.

Suppliers must provide clear information about essential characteristics, risks, prices and contractual conditions. Sufficiently precise offers bind the supplier, and ambiguities are interpreted in the consumer’s favour. For typical online purchases, consumers have seven days to withdraw, counted from the day the contract is signed or the day the product or service is received, with reimbursement of the amounts paid.

The Secretaria Nacional do Consumidor (SENACON), consumer protection agencies (PROCONs) and competent sector regulators may investigate infringements and impose administrative sanctions, including fines, suspension measures and corrective advertising. Consumers may seek individual relief, while authorised bodies and associations may bring collective proceedings. Available remedies include:

• repair;
• replacement;
• price reduction;
• reimbursement;
• performance; and
• damages, depending on the breach and applicable statutory conditions.

Courts and regulators assess the practical effect of business conduct, including whether consumers could make an informed choice. Misleading advertising includes material omissions, and advertisers bear the burden of substantiating their claims. Unsolicited supply, tying and the exploitation of consumer vulnerability are also prohibited.

E-commerce compliance extends to the entire customer journey. Suppliers must:

• disclose their identity, total charges and material restrictions;
• enable the correction of ordering errors;
• provide accessible contractual records; and
• maintain effective support and withdrawal mechanisms.

Businesses should align marketing, contracting, billing and customer service while ensuring that personal data processing also complies with the General Data Protection Law (Law No 13,709/2018).

Merger control is governed by Law No 12,529/2011 and enforced by CADE.

Transactions meeting the statutory concept of a concentration transaction must be notified where, in the financial year preceding the transaction, at least one economic group had gross turnover in Brazil of BRL750 million or more and another economic group had gross turnover in Brazil of BRL75 million or more. The regime is mandatory and suspensory: parties may not consummate a notifiable transaction before obtaining clearance.

Simple transactions may qualify for CADE’s summary procedure, which is designed for cases that are unlikely to raise competition concerns, while ordinary reviews may take substantially longer. The statutory review period is up to 240 days, subject to the extensions permitted by law.

CADE assesses whether a transaction is capable of eliminating competition in a substantial part of the relevant market, creating or strengthening a dominant position or otherwise resulting in dominance of a relevant market, while considering efficiencies and the statutory exceptions that may justify approval.

CADE may clear a transaction unconditionally, impose remedies or prohibit it.

Gun-jumping may lead to fines ranging from BRL60,000 to BRL60 million, the potential nullity of acts implemented before clearance and an administrative investigation.

Anti-competitive conduct is subject to a separate enforcement regime. Companies may face significant turnover-based fines and behavioural or structural remedies, and individuals may also be sanctioned. Cartels may additionally give rise to criminal liability. CADE operates leniency and settlement mechanisms for qualifying conduct.

Brazil has no general foreign investment screening regime or national security review mechanism comparable to CFIUS. In most sectors, foreign investors may acquire Brazilian businesses on substantially the same basis as domestic investors.

However, foreign direct investment is subject to Central Bank reporting requirements under the foreign exchange and capital framework, including through SCE-IED where applicable thresholds are met. This is generally a declaratory regime rather than an approval process.

Restrictions and prior approvals remain relevant in specific sectors. The acquisition or lease of rural land by foreign individuals, entities and certain foreign-controlled Brazilian entities is subject to statutory restrictions, and application can depend on the investor and transaction structure.

Broadcasting companies face constitutional limits on foreign participation, and nuclear and defence-related activities face constitutional or statutory restrictions. Financial institutions may need Central Bank or sector regulator approval for changes of control, while sectors such as civil aviation have been materially liberalised and no longer operate under the historical foreign ownership cap.

There is no general threshold triggering a national filing requirement across the economy. Where sector-specific approval is required, procedures and timings are set by the relevant regulator and may run in parallel with CADE’s merger review. Foreign investors should also assess restrictions affecting border areas, rural land and activities reserved to the State.

Foreign investors generally have access to the same investment incentives as domestic investors, including the Manaus Free Trade Zone, regional development incentives and financing programmes for qualifying infrastructure and innovation investments.

Recent policy developments have focused more on modernising the foreign exchange and capital reporting framework than on creating a screening mechanism. Law 14,286/2021 and subsequent Central Bank regulations have simplified several procedures, with reporting migrating to the SCE systems.

The LGPD Framework

Brazil’s data protection regime centres on the Lei Geral de Proteção de Dados (LGPD, Law 13,709/2018), which is modelled in part on the EU’s GDPR but with its own enforcement architecture. It applies to any processing of personal data carried out in Brazil, or aimed at offering goods or services to individuals in Brazil, regardless of where the controller, processor or data is based. Enforcement sits with the Brazilian Data Protection Authority (ANPD), which has steadily expanded its regulatory and sanctioning activity.

Sector-specific regimes layer additional obligations onto particular industries:

• financial institutions answer to Central Bank cybersecurity and data-sharing rules (including Open Finance);
• telecoms operators to Anatel;
• health data handlers to the Ministry of Health; and
• credit-related processing to the Positive Credit Register statute.

Employers must also reconcile LGPD compliance with labour and union oversight of workplace monitoring.

Legal Bases, Consent, Collection, Use and Disclosure

Processing requires a valid legal basis; consent is only one of ten bases, alongside legitimate interest, contractual necessity and legal obligation. Consent must be free, informed, unambiguous and purpose-specific, with the burden of proof resting with the organisation. Sensitive data (health, biometric, racial, religious or political, among others) is subject to a narrower list of bases and heightened care.

• Purpose limitation and data minimisation govern collection and later use; any new purpose generally requires a fresh legal basis or consent.
• Controllers must maintain processing records, adopt a privacy governance programme and appoint a data protection officer (Encarregado) as a point of contact with the ANPD.
• Disclosure to third parties, including intragroup sharing, is a distinct activity requiring its own legal basis and, where relevant, a data processing agreement.

Data Breach Notification

The LGPD requires controllers to notify the ANPD – and the individuals themselves where risk to data subjects is significant – of incidents creating relevant risk or damage, assessed on a case-by-case basis rather than against a fixed deadline. Well-advised organisations treat any incident as requiring an internal risk assessment within days, with notification following once its scope is reasonably understood.

Cross-Border Data Transfers and Localisation

The LGPD permits international transfers through defined mechanisms, including:

• transfers to countries or bodies recognised by the ANPD as adequate;
• standard contractual clauses;
• binding corporate rules approved by the ANPD;
• specific consent; and
• other statutory hypotheses, such as international legal co-operation requests.

The ANPD has progressively formalised this framework to give companies a clearer path than the LGPD’s original, open-ended text.

Brazil imposes no general data localisation requirement; data may generally be processed and stored abroad if a valid transfer mechanism applies. Certain sectors layer additional constraints, such as Central Bank expectations on financial system infrastructure. Multinational groups should map intragroup data flows and formalise the applicable transfer mechanism as part of their LGPD governance programme.

Anti-Money Laundering and Counter-Terrorist Financing

Brazil’s AML regime is anchored in Law 9.613/1998, as amended, which criminalises money laundering and establishes preventative obligations for regulated entities. Conselho de Controle de Atividades Financeiras (COAF) is the central financial intelligence unit, receiving suspicious activity reports and setting cross-sectoral policy, while the following sector regulators issue their own rules:

• the Central Bank for banks;
• the CVM for capital markets;
• Superintendência de Seguros Privados (SUSEP) for insurers; and
• professional bodies for lawyers, accountants and real estate brokers.

Obliged entities must implement KYC procedures, transaction monitoring, record-keeping and reporting of suspicious or high-value transactions, with AML policies calibrated to risk. Beyond the financial sector, the regime reaches designated non-financial businesses, including dealers in high-value goods, real estate agents and certain legal and accounting activities.

Sanctions, Trade Restrictions and Export Controls

Brazil implements UN Security Council sanctions through federal decrees, and Law 13.810/2019 provides the mechanism for freezing designated individuals’ and entities’ assets. Brazil has no autonomous sanctions programme comparable to the US or EU, but internationally active Brazilian companies remain exposed to extraterritorial foreign sanctions, and must screen counterparties accordingly.

Export and import controls are administered mainly by the Ministry of Development, Industry, Trade and Services through the Siscomex system, with sensitive, dual-use and defence-related goods subject to licensing by specialised bodies. Companies in regulated sectors typically build sanctions and export control screening into onboarding and due diligence.

Anti-Corruption and Anti-Bribery

The Clean Company Act (Law 12.846/2013) is the principal anti-corruption statute, establishing strict administrative and civil liability for legal entities engaging in acts against domestic or foreign public administration, including bribery, tender fraud and obstruction of investigations. Liability does not require proof of intent or fault, making a well-documented compliance programme central to risk mitigation and leniency negotiations.

• Companies typically structure compliance programmes around risk mapping, a code of conduct, third-party due diligence, training, confidential reporting channels and periodic audits, per Decree 11.129/2022.
• A robust, demonstrably effective integrity programme is an express mitigating factor in calculating fines, and can support a leniency agreement with the Comptroller General of the Union (CGU) or the relevant state or municipal authority.
• Individual criminal liability for bribery runs in parallel under the Criminal Code and specific statutes, pursued separately from corporate administrative liability.

Enforcement Powers

The CGU leads federal administrative enforcement, with power to investigate, negotiate leniency agreements and impose fines reaching a significant percentage of gross revenue, alongside publication of the sanction. The Federal Prosecution Service and Federal Police pursue parallel criminal investigations, while the Tribunal de Contas da União (TCU) and CVM oversee public contracting and listed companies respectively, so a single set of facts can trigger simultaneous proceedings before different bodies.

Environmental Regulatory Framework

Brazilian environmental law operates on three levels of government, with the National Environmental Policy Act (Law 6.938/1981) setting overarching principles, and federal, state and municipal agencies sharing licensing and enforcement authority, depending on the activity’s scope. Environmental licensing is the central compliance mechanism for most industrial, infrastructure and real estate projects, typically comprising sequential preliminary, installation and operating licences, each requiring studies proportionate to impact.

Environmental liability in Brazil is strict, joint and several, and unlimited in time, so a purchaser of contaminated land or an acquirer of a business can inherit remediation obligations regardless of fault or timing. This makes environmental due diligence, including licensing history review and soil and groundwater assessments, standard in M&A and real estate transactions involving industrial sites. Carbon pricing has recently taken shape through the Brazilian Emissions Trading System (SBCE, Law 15,042/2024), which will progressively require large emitters to monitor, report and surrender allowances for emissions.

Climate-Related Litigation and Corporate Environmental Liability

Climate litigation has grown steadily, with cases brought against the government, seeking enforcement of climate commitments, and against private companies, testing corporate responsibility for deforestation, emissions and supply chain impacts. The Superior Courts have increasingly treated a stable climate as a legal interest tied to constitutional environmental protections, encouraging actions against companies in carbon-intensive and land use sectors.

For businesses, exposure runs beyond direct liability to disclosure and due diligence risk: lenders, investors and trading partners increasingly expect documented deforestation-free and low-carbon supply chains, particularly for commodities linked to agribusiness and mining. Companies in these sectors typically pair legal compliance with proactive ESG documentation to manage both litigation and counterparty risk.

Health and Safety Obligations

Occupational health and safety is governed principally by the Consolidation of Labour Laws (CLT) and the Ministry of Labour’s Regulatory Standards (NRs), covering risk management programmes, protective equipment, ergonomics and psychosocial risk. Employers must maintain health and safety programmes, provide periodic medical examinations and report workplace accidents to social security, with non-compliance exposing companies to inspection fines, civil liability and, in serious cases, criminal liability.

Licensing and Sector-Specific Regulatory Regimes

Beyond general environmental and safety rules, many activities require sector-specific authorisations on top of standard licensing:

• energy projects require ANEEL concessions or, for oil and gas, ANP authorisation;
• financial services require Central Bank or CVM authorisation;
• healthcare products and services require ANVISA (the Brazilian Health Regulatory Agency) registration and, in some cases, prior inspection; and
• activities with environmental impact often require both an operating licence and industry-specific permits.

Businesses entering a new sector should map this layered landscape early, since its timelines often drive deal or launch schedules more than general formalities.

Current Legal Landscape

Brazil has no dedicated, fully enacted AI statute. AI systems processing personal data fall within the LGPD’s existing framework, including provisions on automated decision-making, which give individuals the right to request the review of decisions taken solely on that basis and, on request, meaningful information about the criteria used. The ANPD has begun issuing AI-specific guidance, and general consumer protection, civil liability and anti-discrimination laws apply to AI-driven products in the absence of AI-specific rules.

The Proposed AI Framework (Bill 2338/2023)

The principal legislative vehicle is Bill 2338/2023, approved by the Senate and pending further debate in the Chamber of Deputies. As drafted, it adopts a risk-based approach broadly comparable to the EU AI Act, classifying systems by risk level, imposing heightened obligations (impact assessments, human oversight, enhanced transparency) on high-risk uses, and prohibiting certain harmful applications outright.

• The bill would create rights for individuals affected by AI systems, including the right to be informed when interacting with one and to obtain an explanation of automated decisions that significantly affect them.
• Developers and deployers would face differentiated obligations by role in the AI value chain, with heavier documentation and governance duties for high-risk systems.
• Enforcement is expected to build on the data protection authority’s structure, with civil society and industry debating the scope of a dedicated AI regulator’s powers.

Sectoral and Self-Regulatory Approaches

In parallel, sector regulators have begun addressing AI within existing mandates: the Central Bank has issued guidance on AI in financial services, and consumer protection authorities have applied existing rules to algorithmic pricing and recommendation systems. Many organisations have adopted internal AI governance frameworks ahead of the statute, to manage LGPD exposure and prepare for its enactment.

Practical Obligations for Organisations

Pending a dedicated AI statute, organisations deploying AI in Brazil should treat LGPD compliance – a documented legal basis for training or operating data, transparency towards affected individuals, and a process for reviewing automated decisions – as the immediate baseline. Building basic AI governance now, including an inventory of AI use cases, bias assessment and documented human oversight, positions companies to adapt once Bill 2338/2023 or a successor statute is enacted.

Consumer Protection

The Consumer Defence Code (Law 8.078/1990) imposes strict liability on suppliers, reverses the burden of proof in favour of consumers in specified circumstances, and grants broad powers to consumer protection agencies (led nationally by SENACON) to investigate practices and impose fines. E-commerce, subscription services and algorithmic pricing have drawn increased regulatory attention, and companies selling to Brazilian consumers should expect the Code to apply to their activities, whether they are locally established or not.

Cybersecurity

Cybersecurity obligations are distributed across sector rules rather than consolidated in a single statute:

• the Central Bank imposes detailed cybersecurity and incident-reporting requirements on financial institutions;
• the LGPD requires proportionate security measures; and
• critical infrastructure operators face additional expectations under policy co-ordinated by the Institutional Security Cabinet.

Incident response planning increasingly needs to address both LGPD breach notification duties and sector-specific reporting timelines, which can run on different clocks.

ESG, Sustainability and Foreign Trade Compliance

Publicly held and, increasingly, private companies seeking financing face growing ESG disclosure expectations, driven by CVM rules for listed issuers, lender and investor due diligence standards, and emerging carbon market obligations. Companies engaged in cross-border trade must also observe customs valuation, classification and country-of-origin rules administered through Siscomex, together with product-specific technical or sanitary requirements imposed by regulators such as ANVISA or the Ministry of Agriculture.

Labour Laws

Brazilian employment relationships are governed primarily by the Federal Constitution and the CLT. The Constitution establishes fundamental employee protections, while the CLT regulates matters such as employment contracts, working hours, remuneration and individual and collective employment rights.

Federal Law No 13,467/2017, known as the Labour Reform, introduced significant changes to the CLT, including the recognition of “highly qualified employees” – ie, individuals who hold a university degree and earn a monthly salary equal to or greater than twice the ceiling of the General Social Security Regime. These employees have greater autonomy to negotiate certain contractual terms directly with employers, provided that constitutional guarantees and the non-waivable rights listed in Article 611-B of the CLT are respected.

Article 507-A of the CLT also permits arbitration agreements with highly qualified employees, subject to their express consent and compliance with the applicable legal requirements. Arbitration proceedings are additionally governed by the Brazilian Arbitration Act (Federal Law No 9,307/1996).

Employers engaging individuals as independent service providers must also consider the risk that the arrangement may be reclassified as employment. Courts generally examine whether the relationship involves subordination, personal service, continuity and remuneration. The Federal Supreme Court is considering the legality, jurisdictional rules and burden of proof applicable to such arrangements under Theme 1,389.

Termination Requirements, Employee Protections and Employer Liability Under Brazilian Law

Employment contracts in Brazil may be terminated as follows:

• by the employer with or without cause;
• by the employee, by mutual agreement; or
• in the case of a serious breach by the employer, through constructive dismissal.

As a general rule, an employer may terminate an indefinite-term employment contract without cause, without having to demonstrate a business justification. The employee will ordinarily be entitled to:

• accrued salary;
• a proportional 13th-month salary;
• accrued and proportional holiday pay plus the constitutional one-third supplement;
• access to the balance of the Severance Indemnity Fund (FGTS);
• a 40% penalty on the employer’s FGTS deposits; and
• subject to eligibility requirements, unemployment insurance.

Notice may be worked or paid in lieu by the employer. The statutory period is 30 days, increased by three days for each year of service with the same employer, up to a maximum of 90 days. The employer must also record the termination, notify the relevant authorities, deliver the required documents and pay the termination amounts within ten days of the end of employment.

Dismissal for cause is permitted only in the circumstances established by Article 482 of the CLT, which include:

• dishonesty;
• serious misconduct;
• habitual neglect of duties;
• insubordination; and
• breach of confidentiality.

As this is the most severe disciplinary measure available, employers are generally expected to establish the misconduct through reliable evidence and observe principles such as proportionality, consistency and prompt application of the sanction. If the alleged cause is not upheld, the dismissal may be converted into termination without cause, with the corresponding payments becoming due.

Brazil does not apply a general concept of “wrongful dismissal” in precisely the same manner as some common law jurisdictions. Nevertheless, a dismissal may be challenged if it is:

• discriminatory;
• retaliatory;
• abusive;
• contrary to a contractual or collective bargaining restriction; or
• carried out during a period of statutory job protection.

Protected categories may include pregnant employees, employees on certain occupational accident leave, and trade union or internal accident prevention representatives. Depending on the circumstances, an invalid or discriminatory dismissal may result in reinstatement, back pay, damages or payment of the remuneration relating to the protected period. Brazilian law expressly allows an employee affected by discriminatory termination to seek reinstatement with back pay or twice the remuneration for the period away from work, in addition to moral damages.

Constructive dismissal, known in Brazil as rescisão indireta, is governed by Article 483 of the CLT. It may be claimed when the employer commits a sufficiently serious breach that makes the continuation of employment unreasonable. Examples include:

• requiring unlawful or excessively burdensome services;
• subjecting the employee to abusive treatment;
• exposing the employee to serious danger;
• materially breaching contractual obligations;
• reducing work in a manner that significantly affects remuneration; or
• committing acts against the employee’s honour or physical integrity.

Repeated failure to pay salary, make FGTS deposits or comply with material contractual duties may also support such a claim.

Constructive dismissal is usually sought before the labour courts, and the employee generally bears the burden of proving the employer’s serious breach. If the claim succeeds, the employee normally receives substantially the same termination entitlements as in a dismissal without cause, including the FGTS penalty. If it fails, the departure may instead be treated as a resignation, depending on the facts and how the employee proceeded. Employers should therefore investigate complaints promptly, document remedial measures and correct material breaches before they render the employment relationship untenable.

Additional considerations apply to fixed-term contracts, negotiated termination agreements and collective redundancies. In particular, mass dismissals require prior trade union intervention, although union authorisation or the conclusion of a collective agreement is not required. Employers should also review applicable collective bargaining agreements, which may establish additional procedures, payments or protections.

Executive Compensation

Executive compensation arrangements may provide for fixed and variable remuneration, performance-related bonuses, short- and long-term incentives, equity awards and deferred compensation. When the executive meets the statutory requirements to qualify as a highly qualified employee (see 10.1 Employment Standards and Workplace Regulation), the parties have greater freedom to negotiate these provisions directly.

Nevertheless, contractual autonomy is not unlimited. Compensation arrangements must comply with the minimum protections established by the Federal Constitution and the CLT. Particular attention should be paid to the proper legal characterisation of each payment for employment law, tax and social security purposes.

Equity incentive arrangements should clearly regulate eligibility, vesting conditions, performance targets, termination consequences and the treatment of awards in corporate transactions.

Enforceability of Restrictive Covenants in Brazilian Employment Relationships

Non-competition, non-solicitation and confidentiality obligations may be included in employment contracts, particularly those involving highly qualified employees. The enhanced contractual autonomy granted to these professionals supports the enforceability of appropriately drafted restrictive covenants.

However, that autonomy remains subject to constitutional protections and mandatory employment rights. Employers should therefore draft restrictive covenants clearly and proportionately, ensuring that their scope reflects a legitimate business interest and does not impose an excessive restriction on the employee.

Confidentiality provisions should identify the protected information and the employee’s obligations during and after employment. Non-competition and non-solicitation clauses should clearly specify their duration, territorial reach, restricted activities and the consequences of a breach. Specifically, a non-compete obligation must be accompanied by equivalent compensation.

Forms of Land Ownership

Brazilian property law recognises full ownership (propriedade plena) as the principal form, alongside lesser real rights that can be registered against a property, including usufruct, surface rights (direito de superfície), easements, and various leases and concessions. Ownership and real rights over immovable property must be registered with the competent notary (Cartório de Registro de Imóveis) in order to be effective against third parties; an unregistered transfer, however valid between the parties, does not transfer ownership under Brazilian law.

Restrictions on Foreign Ownership of Rural Land

The acquisition of rural land by foreign individuals, entities and Brazilian companies with foreign shareholdings above certain thresholds is restricted under Law 5.709/1971 and its implementing decree, which the Supreme Federal Court (Supremo Tribunal Federal, or STF) reaffirmed as constitutional in a 2023 decision resolving years of legal uncertainty. The regime caps the rural land such purchasers may hold, in terms of area and as a proportion of the municipality, and requires prior authorisation from the National Institute of Colonisation and Agrarian Reform (Instituto Nacional de Colonização e Reforma Agrária, or INCRA) or, in some cases, Congress above certain thresholds, including for land near international borders.

In 2026, the STF further confirmed that these restrictions extend to Brazilian companies controlled by foreign capital, closing off structures previously used to acquire rural land through domestic vehicles without INCRA authorisation. Investors should map the acquiring entity’s ultimate beneficial ownership early, since the restrictions turn on the nationality of control rather than the entity’s place of incorporation.

Foreign Ownership of Urban Property

Urban real estate is not subject to the general restrictions on rural land, and foreign individuals and entities may generally acquire, hold and dispose of urban property on the same terms as Brazilian nationals, subject to standard registration and tax identification (CPF or CNPJ). Specific categories of land carry their own rules regardless of nationality, including border zone land (faixa de fronteira), coastal lands (terrenos de marinha) subject to a tenure form known as aforamento, and indigenous or protected environmental areas, which are generally inalienable.

Additional Considerations for Non-Resident Purchasers

Non-resident purchasers must typically register with the Central Bank’s foreign capital system (RDE) when remitting funds from abroad to acquire Brazilian real estate, to allow future repatriation of proceeds and ensure correct tax treatment. Non-resident owners are also subject to Brazilian property taxes (IPTU for urban, ITR for rural) and capital gains tax on disposal, and commonly appoint a local tax representative and, for individuals, obtain a CPF registration to complete the acquisition.

Legal Framework and Land Registration System

Commercial real estate transactions are governed principally by the Civil Code, the Public Registries Law (Law 6.015/1973) and, for leasing, the Tenancy Law (Law 8.245/1991). Brazil operates a registration-based (rather than title-based or Torrens) system: each property has its own registration record (matrícula) at the local real estate registry, and a chronological, continuous chain of registered transfers and encumbrances establishes and protects ownership and security interests against third parties.

Because the matrícula is the authoritative source of title, due diligence centres on an updated certified copy of the registration record together with certificates confirming the absence of liens, judicial claims, tax debts and litigation involving the seller, rather than on title insurance, which remains uncommon in Brazil compared with jurisdictions such as the United States.

Structuring Acquisitions and Dispositions

Commercial property can be acquired directly (asset deal, via a registered deed) or indirectly, through the acquisition of shares or quotas in the entity holding the asset (share deal), with the choice being driven mainly by tax efficiency and the buyer’s willingness to assume contingent liabilities. Direct acquisitions generally limit exposure to the seller’s pre-existing liabilities but trigger municipal transfer tax (ITBI), whereas share deals can defer that exposure but bring the target’s full liability history.

• Due diligence typically covers registered title and chain of ownership, zoning compliance, environmental licensing history, outstanding property and municipal tax debts, and any leases, easements or third-party rights affecting the asset.
• Real estate funds (Fundos de Investimento Imobiliário) and other vehicles are frequently used to hold commercial assets, offering tax advantages for certain investors and facilitating exit through the sale of fund units rather than the underlying property.
• Escrow and holdback mechanisms are common to address contingencies identified in due diligence, particularly tax and environmental risks that survive as liabilities regardless of transaction structure.

Commercial Mortgage Financing and Security

Real property financing is most commonly secured by a mortgage (hipoteca) or, increasingly, a fiduciary transfer of ownership for security purposes (alienação fiduciária), which is favoured by lenders because it allows faster extrajudicial enforcement upon default. Both forms must be registered against the property’s matrícula to be effective and establish priority, which generally follows the chronological order of registration rather than the date the agreement was signed.

Landlord and Tenant Considerations in Commercial Leases

The Tenancy Law gives commercial tenants a statutory right to renew a lease (ação renovatória) where cumulative requirements are met, including a written lease, a minimum aggregate term (typically five years) and at least three years running the same business at the premises – a significant factor for lease negotiations and portfolio planning. Assignment and subletting generally require landlord consent unless the lease provides otherwise, and the law sets specific remedies and notice requirements for default, non-renewal and early termination, including summary judicial eviction in defined circumstances.

Commercial leases are typically structured on a build-to-suit or triple-net basis for larger occupiers, with rent indexed to inflation (commonly IGP-M or IPCA) and subject to judicial review after three years if either party believes rent has become materially misaligned with market levels.

Recent Developments

The consumption tax reform under Constitutional Amendment 132/2023 introduces new IBS and CBS taxes that will progressively apply to the leasing of real property by recurring lessors, overlapping with the current regime over a multi-year transition from 2026. Landlords and tenants are increasingly building tax gross-up and reopener mechanisms into new leases, and the STF’s 2026 decisions on foreign-controlled rural land (see 11.1 Requirements for Land Ownership) are also prompting renewed attention to beneficial ownership structuring for real estate vehicles.