Over the past 12 months, Brazil’s technology M&A market has moved from early recovery to a materially more active environment. Following a sharp slowdown in 2023, tech deal volume rose from 145 transactions in 2023 to 191 in 2024 (Questum Deals Report). Activity so far in 2025 has continued this upward trend, with a stronger pipeline and the return of serial corporate buyers.

Current activity is led by strategic and corporate acquirers, particularly in enterprise software, ERP, fintech and other SaaS and tech-enabled services, often with an AI component. Valuations have normalised from the 2021–22 peak, but buyer confidence, process volume and willingness to transact are all higher than 12 months ago. The Brazilian technology M&A market is therefore best characterised as in a solid recovery, rather than the downcycle that marked 2023. This broadly mirrors global technology M&A, although Brazil remains smaller in absolute terms and shaped by local macroeconomic and sector-specific factors.

Brazilian technology M&A has been driven by consolidation in B2B and mission-critical solutions, with emphasis on ERP/IT platforms, financial services technology (including payments, credit and Open Finance players) and data-intensive SaaS models. Fintechs have been among the most active targets, alongside software companies in healthcare, education, marketing and sales, and cybersecurity, supported by the push for digitalisation and operational efficiency in large and mid-sized companies. Buyers show a preference for recurring revenue, for scalable platforms – often with embedded AI or advanced analytics – and for businesses with stronger governance, transparent financials and mature operations.

In parallel, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) has advanced capital markets flexibilisation for smaller issuers, including the newly approved “FÁCIL” regime, which is expected over time to broaden funding and exit alternatives for tech and VC-backed companies beyond traditional large-cap IPOs.

In Brazil, new technology start-ups are typically incorporated locally, most often as limited liability companies (sociedades limitadas – “Limitadas”). This structure is broadly comparable in practice to a US LLC and is preferred at early stages because it is simple to operate, involves fewer formalities and works well alongside shareholders’ agreements. It also accommodates convertible debt and SAFE-style instruments.

Where more sophisticated capital structures or governance are required – such as multiple classes of equity, a larger number of institutional investors or a potential future listing – companies may incorporate as corporations (sociedades por ações – “SAs”), either privately held or, later, publicly held. In cross-border, venture-backed structures, it is common to have a foreign holding company (eg, in Delaware or the Cayman Islands) above a Brazilian operating company, but the entity that conducts business in Brazil is usually incorporated locally.

There is no statutory minimum capital to incorporate a Limitada or a privately held SA, save for specific regulated sectors (eg, financial institutions, insurance, aviation and other strategic activities). For SAs, at least 10% of the cash portion of subscribed share capital must be paid in on incorporation and deposited with a Brazilian bank.

Digitalisation of corporate registries has made incorporation faster. A straightforward domestic company can usually be formed in around ten business days from filing. Where there are foreign investors, additional steps (tax IDs, notarisation and apostille of foreign documents, sworn translations and local notarial filings) can extend the timeline to several weeks.

Technology entrepreneurs almost always choose either a Limitada (sociedade limitada) or an SA (sociedade por ações). Both offer limited liability as a general rule.

The Limitada is the default for early-stage ventures and smaller technology businesses. It is simpler, involves fewer mandatory formalities and is cost-effective to maintain. Governance and economic arrangements are typically implemented through the articles of association and a quotaholders’ agreement, which offers significant contractual flexibility.

SAs are recommended where more complex governance or capital structures are envisaged – for example, multiple investor classes, broader equity incentive plans, larger syndicates of institutional investors or a potential IPO. Many start-ups begin as Limitadas and convert into SAs when ownership and financing become more complex.

Recent reforms have narrowed differences between the two forms. Both may have a single shareholder/quotaholder and both may be managed by a single director or officer (resident or non-resident, provided a Brazilian legal representative is appointed for non-resident managers). Control typically follows a majority of voting capital, although this can be adjusted by contract in sophisticated arrangements.

Both Limitadas and SAs can be wholly owned by foreign investors, subject to tax registration and appointment of a Brazilian resident legal representative. In practice, foreign-owned start-ups adopt the same basic forms as domestic ones, with added FX and registration formalities.

At pre-seed stage in Brazil, funding typically comes from angel investors (including experienced entrepreneurs), sometimes investing through informal groups or clubs, and from early-stage VC funds or accelerator programmes. Both domestic and foreign investors are active, subject to sectoral rules. Government-sponsored development institutions (such as BNDES and FINEP, and certain state agencies) also act as cornerstone investors in seed and venture funds that invest in early-stage technology companies.

Seed rounds are more often led by VC funds and complemented by angels, family offices and, in some verticals, corporate venture capital. Documentation commonly uses convertible instruments (convertible loans or notes) designed to convert into equity in subsequent priced rounds. SAFE-inspired instruments are also used, adapted to Brazilian law. Where non-resident investors fund convertible instruments or equity, the foreign investment must be registered in the Central Bank’s RDE-IED system for FX/statistical purposes and repatriation.

Venture capital is primarily provided by independent VC funds, bank- and corporate-backed funds and, increasingly, corporate venture arms of large Brazilian and multinational groups. BNDES and FINEP (and, in some cases, state agencies) act as cornerstone investors in seed and venture funds.

Access to domestic VC is cyclical. After a 2021 peak and a 2023 slowdown, investment began to recover from 2024 onwards, with investors focusing on unit economics and more mature models. Government programmes have eligibility criteria (eg, size, innovation profile, sector and governance), so they are not automatic sources of capital. Foreign VC firms are active across stages, and later seed, Series A and growth rounds often include international funds and corporate investors alongside domestic capital.

There is no official model documentation issued by Brazilian authorities or associations, but VC documentation follows well-developed market practice. Term sheets, quotaholders’/shareholders’ agreements, subscription agreements, convertible loans and equity or phantom option plans are relatively standardised, drawing on US and UK structures and adapted to Brazilian corporate, tax and FX rules.

SAFE-inspired instruments are increasingly common but are typically localised – documented as Brazilian-law “SAFE style” agreements or as convertible loans using SAFE concepts – to ensure consistency with Brazilian law. For foreign investors, commercial terms will usually be familiar, even if legal wrappers reflect Brazilian specifics.

Start-ups typically remain Limitadas at the operating level through early stages and convert into SAs when they need features that are impractical in a Limitada (eg, multiple share classes, capital markets alignment or IPO preparation). This is achieved through a reorganisation so the operating company becomes an SA.

From Series A/B onwards, it is relatively common to implement an offshore holding company (often Delaware or Cayman) above the Brazilian operating company, with all investors participating at the holding level. Drivers include investor familiarity with foreign company law, perceived legal certainty, standardised VC documentation and, in some cases, tax and exit planning.

In practice, this means that the “Brazilian tech story” is frequently a Brazilian operating business under an offshore holding company, particularly once international investors and later-stage rounds enter the picture.

In Brazil, venture-backed technology exits are more likely to occur via sale (trade sales or sponsor-to-sponsor deals, often combined with shareholder secondaries) than via IPO. Most meaningful liquidity events for founders and early investors arise earlier through M&A, while IPOs tend to occur later and in fewer cases.

This has been reinforced by the prolonged closure of the domestic IPO window. Brazil’s B3 exchange has seen no new IPOs since 2021, with 2022–24 recording zero listings, amid macroeconomic and market headwinds. Dual-track processes have therefore been less common, and most companies and VC backers opt for a sale process as the primary liquidity route, keeping IPOs as a longer-term alternative.

Listing venue is driven by size, investor base and geographic focus. Domestically oriented businesses have historically listed on B3, particularly where revenues and operations are concentrated in Brazil and the natural shareholder base is local. Larger or more international platforms – especially in financial services and fintech – are more likely to consider a foreign exchange (often in the USA) to access deeper liquidity, specialised research coverage and a broader universe of technology-focused investors.

As at the date of writing, there have been no new IPOs on B3 since 2021, with equity capital raising largely through follow-ons by listed issuers. Many technology companies therefore postpone listing and remain private longer or, if scale and governance justify, evaluate a foreign listing when conditions improve.

Choosing a foreign listing venue does not, by itself, prevent a future sale, but it alters the applicable framework. Where the listed entity is a Brazilian companhia aberta (listed corporation) on B3, public tender offers and delistings follow the Brazilian Corporations Law (Law No 6,404/1976) and CVM rules, providing tools – takeover bids, delisting offers and corporate reorganisations (eg, mergers or redemptions), with appraisal rights – to move towards high ownership levels while protecting minorities.

If the listing vehicle is a foreign company admitted only to a foreign exchange, Brazilian takeover/delisting rules generally do not apply at the listed entity level. Future take-private or squeeze-out mechanics will depend on the foreign jurisdiction’s company law, securities regulation and exchange rules, with Brazilian law relevant primarily to local subsidiaries. In cross-border structures, acquirers and founders therefore need to take into account, at the IPO planning stage, how the chosen foreign listing regime deals with takeover bids, minority squeeze-out and appraisal rights, as this can introduce additional legal complexity compared with a purely domestic listing.

Sales of privately held, venture-backed technology companies may be run as competitive auctions or bilateral processes. The choice depends on the target profile, likely bidder universe and investor dynamics. Many mid-market tech deals proceed as limited auctions with a small invited group or as bilateral negotiations with a strategic buyer with a strong industrial rationale, often organised through drag-along mechanisms and pre-emptive rights in the shareholders’ agreement.

VC-backed exits are typically equity deals, either of the Brazilian operating company or an offshore holding vehicle. Asset deals and statutory mergers exist but are used less frequently for tax and procedural reasons.

Buyers generally acquire all or substantially all of the equity, often via drag-along rights. Founders or key managers may roll over part of their stake, but VC funds usually seek a clean exit rather than remain as minority shareholders. Earn-outs may be used alongside negotiated roll-overs for founders and key talent.

Most technology M&A transactions in Brazil are structured as full company sales for cash. Share-for-share or mixed cash and stock consideration is less common and tends to appear in larger strategic or cross-border deals, or where the buyer is listed. Earn-outs are frequent in tech, although the mechanics are usually simpler than in US practice.

It is standard for sellers to stand behind representations and warranties and certain identified liabilities through post-closing indemnities. Founders are typically the primary indemnifying parties and, in some cases, early VC investors provide limited representations and indemnities, often with tighter caps and narrower scope.

Escrows and holdbacks are customary and well tested in Brazil as the main security for indemnities. Representations and warranties insurance is available and used, particularly in larger or cross-border deals, but is not yet a universal market standard in Brazil.

In Brazil, spin-offs (cisões) are available and used selectively in the technology sector when there is a clear need to separate businesses, assets or liabilities. Typical drivers include segregating distinct business lines or risk profiles (eg, regulated versus non-regulated activities), ring-fencing contingencies and preparing for a sale, joint venture or financing at a specific business unit level.

Tax authorities expect genuine economic substance and a legitimate business purpose; purely formal restructurings aimed mainly at tax efficiency risk challenge. Contractual impacts must also be evaluated (change of control, assignment or early termination provisions). Depending on the structure and the company type, dissenting shareholders may have withdrawal rights, and listed companies may need appraisal reports to support exchange ratios or fair value. Creditor protection is central where a reorganisation reallocates assets and liabilities.

Spin-offs (cisões) can, in principle, be structured on a tax-neutral basis at corporate and shareholder level if certain conditions are met. In broad terms, this requires genuine economic substance and business purpose, and transfers at book value. Typical tax-efficient scenarios include intragroup reorganisations to separate business lines or risks within the same shareholder base, or the carve-out of non-core activities from a core technology platform ahead of a sale or listing. Brazilian tax authorities scrutinise “tax free” characterisation in the absence of a substantive rationale and may recharacterise transactions and assess tax. As a result, any tax-neutral spin-off structure must be carefully designed and reviewed on a case-by-case basis.

A spin-off followed by a business combination (eg, merger, incorporation or sale of the spun-off company) is permissible, and this is a structure occasionally used in technology deals to isolate the business that will be combined or sold. The key constraint is the need for a genuine business purpose and economic substance. If the sequence primarily aims to reduce tax without a coherent corporate or commercial rationale (eg, risk segregation, regulatory alignment, integration planning), the tax authorities may challenge it and recharacterise it. Clear valuation support and a documented rationale are essential.

Spin-offs of privately held and listed companies do not require prior tax rulings or regulatory clearances as a condition to completion. There is no mandatory advance ruling from the Federal Revenue Service, though non-binding consultations may be used in complex cases.

Timetables typically include (i) preparation and approval (supporting documentation, convening meetings and passing resolutions – weeks to a couple of months for private companies; longer for listed companies), and (ii) post-implementation waiting periods for creditor opposition and, where applicable, dissenting shareholder withdrawal. A three-to-four-month timetable is common for private companies and four to six months for listed companies, depending on complexity.

Stakebuilding is permitted but not especially common. Under the CVM rules, any person (alone or in concert) who reaches or exceeds 5% of a given type or class of shares or relevant securities of a publicly held company must promptly notify the issuer (and the issuer shall issue a notice to the market), and do so on each subsequent 5-percentage-point change. The disclosure must state the purpose of the holding and any plans regarding control, management or capital structure, including the target stake.

Crossing 5 percentage points does not, by itself, impose a “put up or shut up” requirement in Brazil. Separate mandatory tender offer obligations may arise in other circumstances (eg, acquisition of control, delisting, free-float triggers or poison-pill thresholds in by-laws).

Brazilian rules provide for mandatory offers in specified cases. In a sale of control, the purchaser of the controlling stake must extend tag-along rights to minority holders of voting shares at not less than 80% of the price per voting share paid to the controller (or 100% where the company’s by-laws or premium governance segments, such as Novo Mercado or Level 2, so require). Mandatory tender offers are also required in delisting/cancellation of registration scenarios and in cases where additional acquisitions would reduce the free float below the minimum levels prescribed by the CVM.

Public company acquisitions are typically implemented via tender offers and direct share purchases, or through corporate reorganisations in which one company is merged or incorporated into another. Mergers into a newly formed vehicle are legally possible but less common, reflecting procedural complexity, timing, appraisal/withdrawal rights, valuation disputes in listed-company contexts and other tax implications.

Cash is the most common form of consideration in acquisitions of listed companies. Share-for-share or mixed consideration appears mainly in larger or cross-border deals or where the combination is structured as a statutory reorganisation with share issuance to target shareholders.

Cash is permissible in both tender offers and merger-type structures, but full cash-outs are generally implemented as tender offers, with corresponding disclosure and procedural requirements. In a sale of control, the statutory tag-along is not less than 80% (or 100% where by-laws/segment rules so provide). In delisting or free-float-related offers, the price must be supported by an independent appraisal. Earn-outs and contingent consideration may be used to bridge uncertainty, typically in simpler forms than in more developed public markets.

Conditional tender offers are permitted, with conditions required to be objective and clearly disclosed. Common conditions include antitrust and other regulatory approvals. Financing-out conditions are not accepted in mandatory offers; bidders must evidence the ability to settle at launch. For voluntary offers, conditionality is possible but market practice favours high certainty of funds. Minimum acceptance thresholds and “no material adverse change” conditions may appear, subject to equal treatment.

It is customary to have a transaction agreement between bidder and target (and/or controlling shareholders) in supported offers. Beyond recommendation, the target may commit to co-operation on filings, diligence access and ordinary-course covenants. Representations and warranties are limited versus private M&A and focus on fundamentals (corporate authority, capital, compliance and accuracy of disclosed information), and must comply with principles of equal treatment and market transparency.

Minimum acceptance thresholds are common to ensure a bidder achieves effective control (typically a majority of voting capital) or other strategic ownership levels (eg, facilitating delisting or reorganisation). Conditions must be objective, disclosed and consistent with equal-treatment rules.

Brazilian law does not provide an automatic statutory squeeze-out mechanism based solely on tender acceptances. In control offers, bidders must commit for a limited period to purchase remaining shares at the offer price, but cannot compel non-tendering shareholders to sell. For delistings and cancellations of registration, a tender offer to all minorities at a price supported by an independent appraisal is required; non-tendering shareholders typically remain in a closely held company post-deregistration. Bidders aiming for near-100% ownership generally combine tender offers with post-closing reorganisations (mergers, incorporations or incorporations of shares) approved in shareholders’ meetings and subject to minority protections (including withdrawal rights and potential valuation challenges).

There is no formal “certain funds” test identical to those in other jurisdictions, but the bidder must appoint a financial-institution intermediary and ensure adequate arrangements (eg, cash collateral, guarantees) so the CVM and B3 are satisfied the offer can be fully settled. In practice, funding is arranged before launch and described in offer documents. Conditions enabling withdrawal due to lack of financing are scrutinised and disfavoured; financing risk is typically managed outside the offer.

Brazilian law allows flexibility in deal protections, subject to approval by competent corporate bodies, pursuit of the company’s corporate interest, directors’ fiduciary duties, equal treatment and the absence of abusive conduct or conflicts with controllers. Within these limits, no-shop/non-solicit provisions, reasonable exclusivity, matching rights and proportionate break fees are generally acceptable, provided they do not prevent the board from considering a clearly superior proposal or unduly restrict shareholders. The CVM may seek clarifications or adjustments where protections raise concerns.

Brazilian law does not provide a separate domination or profit-transfer regime. Governance rights flow from shareholding levels and shareholders’ agreements (where they exist). A holder of a majority of voting capital will typically be the controlling shareholder and can appoint most directors and set strategy within corporate-interest limits, subject to duties under the Corporations Law and CVM/B3 rules. Significant but non-controlling stakes can secure governance rights through shareholders’ agreements or by-law amendments (eg, board seats, vetoes on reserved matters, information rights) duly filed with the company (and with the CVM/B3 for listed entities). Minority protections include rights to information, voting on specific matters, withdrawal rights in certain reorganisations, the ability to challenge abusive acts and, in some cases, the right to elect members to the statutory audit board (conselho fiscal).

In concentrated-ownership settings, bidders commonly secure binding agreements with controllers or core blocs, then launch any required offers. Broader irrevocables from other shareholders are less frequent but can be used in more widely held companies by way of support/voting agreements, provided they align with corporate and tender-offer rules and equal-treatment principles. “Fiduciary outs” are not standardised and are negotiated case by case within the OPA framework and shareholders’ rights.

Tender offers must be filed and registered with the CVM and conducted through an authorised intermediary on B3. The CVM and B3 review compliance with disclosure, procedure and equal-treatment rules; these entities do not “approve” commercial merits. Where rules impose pricing parameters (eg, control, delisting or free-float restoration offers), compliance is verified, including appraisal standards for price support. Timelines, acceptance periods and auction procedures are set by regulation and reflected in the registered documents. Competing offers are possible, and acceptance periods may be aligned/extended to allow comparison, though they are relatively rare where controllers have committed to a bidder.

Offers can be conditioned on merger-control and other approvals if conditions and timing effects are clearly described and compliant with CVM/B3 rules. Acceptance periods or settlement dates may be extended in specific cases, but an offer cannot remain open indefinitely. Merger-control and other reviews commonly run in parallel, with settlement conditional on approvals. Deals below notification thresholds are generally not fileable, though CADE retains ex officio review powers.

As a rule, no specific licence or prior approval is required merely to incorporate and operate a generic technology or software company in Brazil. Most early-stage tech businesses can be formed and start operating with standard corporate, tax and labour registrations. Where the core activity is regulated (eg, payments/fintech, telecoms, certain health-related activities), prior approvals or licences from the relevant regulator may be required before operations begin or expand.

Private and public M&A are grounded in the Brazilian Civil Code and the Corporations Law, with general contract law principles applying. For listed companies and admitted securities, the Brazilian Capital Markets Law (Law No 6,385/1976) and CVM regulations govern disclosure and, where applicable, tender offers. The CVM administers and enforces federal securities law. In listed-company cases, B3’s listing rules and its self-regulatory powers also apply. Alleged corporate law violations are pursued by private plaintiffs before state courts or arbitration, depending on by-laws and transaction documents.

Brazil is generally open to foreign investment, but specific sectors have restrictions (eg, defence-related activities, nuclear energy, press and broadcasting, rural land near borders and, in certain cases, aviation and financial services). These rarely affect pure technology or software M&A unless the target operates in a regulated segment (eg, fintech, telecoms, critical infrastructure). Foreign direct investment must be registered with the Central Bank’s electronic RDE-IED system; this registration is procedural, not discretionary or suspensory, provided sectoral rules are met.

Brazil has no cross-sector national security review regime comparable to those in some jurisdictions. National security and foreign ownership issues arise through sector-specific rules (eg, defence, media, landholding). As a rule, Brazil does not restrict investment based solely on the investor’s jurisdiction, but investments must comply with sanctions implemented by Brazil and with anti-money-laundering and KYC rules.

Export control rules apply to defence, dual-use and other sensitive goods/technologies. The Interministerial Commission for the Control of Exports of Sensitive Goods co-ordinates policy. For technology M&A, export controls matter where targets export controlled technologies or defence-related products; end use and licensing are addressed in diligence, conditions precedent and post-closing covenants. Exports must be registered in SISCOMEX (an export system of the Brazilian Federal Revenue Service); prior licences or authorisations may be required depending on goods/technologies.

Brazil operates a mandatory, suspensory merger-control regime administered by CADE (Conselho Administrativo de Defesa Econômica). A filing is required for acts of economic concentration with effects in Brazil that meet turnover thresholds: in the preceding financial year, at least one economic group involved must have gross revenues in Brazil of BRL750 million or more, and at least one group on the other side must have BRL75 million or more. Parties must notify pre-closing and are prohibited from implementing in Brazil before clearance; gun jumping can result in fines and, in extreme cases, in the transaction being rendered ineffective in Brazil. Deals below thresholds are not notifiable, though CADE may review exceptional cases ex officio.

General Environment and “Primacy of Reality”

Brazil has a historically employee-protective labour regime. Employment relations are primarily governed by the Consolidation of Labour Laws (Consolidação das Leis do Trabalho – CLT), interpreted by a specialised system of labour courts, and complemented by active trade unions and collective bargaining agreements (CBAs), which often grant additional rights and typically apply at category level even where an individual employee is not personally unionised. A traditional feature of Brazilian labour law is the “primacy of reality”: the existence of an employment relationship is determined by its substance rather than its form. Courts have long recharacterised consultancy or services agreements as employment where the factual indicia are present (eg, personal services, subordination, regularity and payment of wages), with corresponding labour and social security consequences; more recent higher-court case law has tended to scrutinise reclassifications more carefully, but the principle remains a practical risk.

Labour and social security matters are monitored by multiple authorities, including labour inspection bodies, the Ministry of Labour and Employment (Ministério do Trabalho e Emprego – MTE) and the Labour Prosecution Office (Ministério Público do Trabalho – MPT), which may conduct audits and investigations. As a result, labour and social security contingencies are a recurring focus in due diligence in Brazilian transactions, particularly in technology deals with large contractor pools or platform workforces.

Employment Agreements and Collective Arrangements

Employment agreements in Brazil operate against a comprehensive statutory and collective backdrop. The CLT and CBAs define most baseline rights (working hours, holidays, overtime, severance, benefits, etc). Individual contracts complement this framework but cannot validly waive or restrict rights granted by law or CBAs. In many cases, relationships are lightly documented in writing; even so, the CLT applies in full. Written contracts are often used to address points of particular interest to the employer (eg, confidentiality, IP allocation, non-compete obligations and variable remuneration structures).

For an acquirer, a simple “roll-out” of a model contract rarely suffices. It is essential to understand which CBAs apply to the workforce, how the CLT and those CBAs have been applied in practice, and whether arrangements agreed between employer and workers are enforceable under Brazilian rules (including the risk of recharacterisation of service contracts as employment). It is equally important to map any reliance on contractors or individual service providers whose agreements could be reclassified as employment if the factual conditions are met.

Contract Points That Require Close Review

• IP and confidentiality: Provisions assigning IP rights created by employees or contractors to the company should be express, clear and consistent with Brazilian law, especially for software and other technology assets.
• Non-competition and non-solicitation: Enforceability turns on narrow tailoring (eg, reasonable time, geography and scope) and is usually supported by adequate consideration; broad or open-ended clauses risk being struck down.
• Compensation and benefits: Fixed and variable pay, bonuses, stock options and fringe benefits must comply with CLT rules and be consistent with applicable CBAs, including for severance and social security calculations.
• Contractor reclassification risk: Agreements with “contractors” or individual service providers may be characterised as employment where the factual indicia of employment are present, with associated liabilities.

Practical Focus for Acquirers (Technology M&A)

• Are employment and contractor agreements sufficiently protective on IP ownership, confidentiality and assignment of inventions, code and other intangibles?
• Are there key employees or founders whose arrangements need to be revisited or reinforced in connection with the transaction (eg, retention and vesting)?
• Where non-competes exist, are they structured in a way that is likely to be enforceable (reasonable duration/scope and appropriate consideration)?
• What is the volume and nature of labour claims (individual lawsuits, collective actions and administrative proceedings)?
• Have there been audits or investigations by labour or social security authorities, or commitments/settlements that will continue to bind the company post-closing?
• Are contractor arrangements at risk of reclassification, and are any legacy issues adequately provisioned?
• Are labour and social security risks appropriately covered by representations and warranties, specific indemnities and escrows/holdbacks?
• Are compensation and benefits for key employees aligned with CLT requirements and relevant CBAs (eg, working hours, overtime, annual leave, 13th salary and FGTS deposits), and what CBA provisions could impact post-closing integration or restructuring?

Works Councils, Union Consultation and Disclosure

Brazil does not have a works council system comparable to certain jurisdictions, and there is no general mandatory requirement to consult employees or unions solely because of an M&A transaction, provided employees’ individual and collective rights (eg, severance, CBAs, health and safety) are respected. Trade unions are, however, very active and may be involved if the transaction leads to collective dismissals, changes in working conditions or broader restructurings after closing, depending on local practice and the terms of applicable CBAs.

From a corporate governance perspective, Brazilian corporate law permits a corporation’s by-laws to reserve a board seat for an employee representative, but this is optional. Where such a seat exists, the employee-elected director has a single vote like any other board member and does not have a superior or binding vote. Any consultation with unions or employee representatives in the context of a transaction is generally advisory rather than binding on the board, and there is no specific securities-law obligation to disclose a “works council opinion” as such.

There is no general currency control regime requiring Central Bank approval for standard-technology M&A. Cross-border payments must pass through authorised institutions and be recorded under foreign-exchange and foreign-investment rules (including FDI registration), which are procedural rather than discretionary. Specific Central Bank approvals may be required where the target is a regulated financial-sector entity (eg, banks and certain payment institutions), particularly on changes of control or qualifying holdings.

Two areas have been most relevant to technology M&A: data protection/privacy and capital markets.

On privacy, the General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD, Law No 13,709/2018) has consolidated as a fully operational regime. The National Data Protection Authority (Autoridade Nacional de Proteção de Dados – ANPD) issued its Regulation on Dosimetry and Sanctions (CD/ANPD Resolution No 4/2023), making sanction risk concrete and raising compliance expectations. For data-intensive businesses (digital platforms, fintechs, healthtechs, SaaS), LGPD compliance has become a core diligence and valuation workstream, with detailed mapping of databases, data flows and incidents, and increasingly granular contractual protections. In parallel, the European Data Protection Board’s Opinion 28/2025 on the European Commission’s draft adequacy decision for Brazil confirms the close alignment between the Brazilian data protection framework and EU data protection law and, once the adequacy decision itself is formally adopted by the Commission, will allow personal data to flow more freely from the EU to Brazil – a significant factor for cross-border technology M&A.

On capital markets, the CVM approved in July 2025 the “FÁCIL” regime (Facilitação do Acesso a Capital e de Incentivos a Listagens) through CVM Resolutions 231 and 232, creating a simplified listing/offering framework for companhias de menor porte (corporations with consolidated gross revenue below BRL500 million). FÁCIL introduces proportional rules for registration, offerings and ongoing disclosure (including a unified “Formulário FÁCIL” and the option for semi-annual financials) and provides simplified offering routes subject to an aggregate cap of BRL300 million per issuer over any 12-month period, with entry into force in early 2026.

Due diligence has broadened beyond corporate, tax, litigation and labour to include technology/IP assets (chain of title to software and other IP, with focus on employee/contractor assignments), registration status of industrial property and third-party/open-source use. Technical diligence (eg, code scans and SBOMs) is increasingly used to identify open source components and assess licensing/compliance.

Since the LGPD’s publication, data privacy and cybersecurity have become central strands of diligence: data flows, legal bases, security governance, incident history and ANPD engagement, as well as international transfer mechanisms and sector-specific rules. Regulated verticals (eg, fintech) also require focused licensing and conduct-of-business reviews.

In line with deal-activity trends, there has also been a marked increase in regulatory and compliance due diligence in fintech and other regulated technology verticals, with particular attention to financial services, payments and anti-money-laundering frameworks. Technology has led Brazilian deal volume in recent years, and fintechs are prominent both as targets and as acquirers, which reinforces the focus on licensing, conduct-of-business rules and supervisory interactions in these transactions. Tech due diligence in Brazil is now a mix of corporate, regulatory, IP and data protection workstreams.

A listed company may share non-public information with a bona fide bidder for M&A diligence where there is a legitimate purpose and robust confidentiality and non-use obligations, mindful of inside-information handling, LGPD compliance and competition-law safeguards. There is no express rule mandating identical information to all bidders, but equal-treatment and market-conduct principles mean boards should manage access to avoid unjustified informational advantages, often via staged data rooms and comparable access for serious bidders at similar stages.

Boards may authorise detailed legal/technical diligence of IP, software architecture, cybersecurity and data flows, subject to strict access controls for highly sensitive material (eg, source code/security configurations), LGPD-compliant handling (minimisation/anonymisation, where feasible) and clean team protocols where bidders are competitors.

There is no specific LGPD/ANPD rule establishing a distinct diligence regime for M&A or prohibiting diligence in transactional contexts. Any access to personal data in diligence must comply with LGPD principles and legal bases (purpose limitation, minimisation, security, transparency and data-subject rights). Practically, disclosure should be limited to necessary personal data (often pseudonymised where feasible), under appropriate contractual safeguards and technical/organisational security measures. Parties may face ANPD sanctions and civil liability in case of misuse, excessive collection or diligence-related security incidents.

A bid must be made public when it qualifies as a public tender offer (oferta pública de aquisição de ações – OPA) under the Corporations Law, CVM regulations or by-laws (eg, control-sale tag-along, delisting, free-float restoration, voluntary takeover bids or poison-pill triggers). The bidder must register the OPA with the CVM and B3 and publish the offer announcement. The issuer must disclose the launch as a material fact under general disclosure rules. Until the decision to proceed with an OPA is taken, negotiations must be treated as confidential price-sensitive information; once filed/launched, the offer is public through regulatory and market disclosures.

A prospectus is not automatically required simply because shares are used as consideration. Whether a prospectus is needed turns on whether the consideration constitutes a public offering under CVM rules. Stock-for-stock transactions implemented as statutory reorganisations (mergers/incorporations/spin-offs) typically disclose through merger protocols/justifications, appraisal reports, meeting materials and market announcements, not a separate prospectus. In tender offers where the bidder’s shares are broadly offered to target shareholders, the OPA must be registered and, absent an exemption, the public offering regime – including a prospectus – applies. There is no rule that consideration shares must be listed on a specific exchange; compliance with Brazilian offering/disclosure requirements is the key when securities (or BDRs) are offered in Brazil.

Financial statement requirements depend on structure, not solely on cash versus stock. In a typical cash OPA, the bidder need not include full financials merely because it pays cash; regulation focuses on evidencing settlement capacity (via financial-institution support and funding disclosure). Where securities are used and particularly in statutory reorganisations, independent appraisal reports commonly support exchange ratios and price parameters.

As regards the form of financial statements of companies generally, Brazilian companies classified as large-sized companies (that is, those exceeding certain thresholds of total assets or gross revenue), regardless of their corporate type, must prepare their financial statements in accordance with the accounting framework of the Corporations Law. That framework has been revised to converge with international standards and is now largely aligned with IFRS as adopted in Brazil, through local accounting pronouncements.

Listed issuers remain subject to audited financial statement obligations under IFRS-aligned Brazilian standards; pro forma information may be required in specific cases under CVM rules.

Private M&A documents (share purchase/investment agreements and schedules) are generally not publicly filed; only resulting corporate acts (by-law amendments, minutes) go to the commercial registry.

In public deals/offers, core documents must be filed/disclosed in specific cases – OPA documents and supporting materials; for statutory reorganisations, protocols/justifications, appraisal reports and shareholders’ resolutions. Underlying contracts are not automatically public; the CVM may request them where necessary for registration. Shareholding-threshold disclosures (eg, 5%) require a standard position/intention notice, not the filing of underlying purchase agreements.

Directors owe fiduciary duties of diligence and loyalty, and must act in the company’s best interests (interesse social). In M&A, this means informing themselves adequately on structure, valuation and risk allocation, including IP/software/data assets, key talent dependence, platform resilience/scalability and sectoral regulation (eg, LGPD and cybersecurity).

Loyalty requires managing conflicts, excluding conflicted individuals from deliberations and ensuring arm’s-length approval.

Directors of listed companies have broader disclosure and inside-information obligations under corporate and securities laws. Duties are owed primarily to the company; Brazilian law recognises the company’s social function/interest, allowing boards to consider stakeholder impacts insofar as they are relevant to long-term value and sustainability.

There is no uniform market practice, given limited public company M&A volume. Conflicts are commonly managed by disclosure and abstention (conflicted directors refrain from receiving certain information, leave meetings and do not vote).

In larger/sensitive transactions – especially related-party or controller-involved deals – boards sometimes create ad hoc committees of non-conflicted/independent directors to review and support recommendations as a governance best practice.

Clean teams may be established for diligence where competitively sensitive information is involved; these are management/adviser-led rather than led by board committees.

Most combinations require shareholder approval; the board is expected to act within fiduciary duties to safeguard the corporate interest. In material deals, the board typically supervises negotiations, assesses the transaction and issues a reasoned recommendation. The board may seek improved terms, authorise exploration of alternatives or set process parameters consistent with law, CVM/B3 rules and by-laws. Its unilateral ability to block a transaction supported by requisite shareholder majorities is limited in the absence of specific by-law provisions (eg, poison pills or enhanced quorums).

Litigation specifically challenging board recommendations is less frequent than in some markets and tends to arise in contentious cases, typically alleging fiduciary breaches, conflicts, process flaws or inadequate disclosure, before courts, the CVM or arbitration where by-laws so provide. Buyers should ensure conflicts are identified/managed, deliberations are informed and minuted, and disclosures comply with CVM rules.

Boards commonly rely on external legal, financial and tax advisers. There is no legal requirement to obtain a fairness opinion in all transactions, and it is not yet market standard, though fairness or valuation opinions are sometimes obtained in larger or complex deals, especially with cross-border or sensitive conflict profiles.

Independent appraisal reports are required in specific scenarios (eg, certain OPAs, mergers and spin-offs) and focus on economic value and exchange ratio support; while not labelled “fairness opinions”, they often serve a similar informational role for directors.