Olá! If you are a business owner based in Brazil but operating in the USA, you may already be familiar with the unique challenges that come with navigating compliance, legal, and beneficial ownership reporting requirements in both countries. From dealing with the complex tax laws in Brazil to understanding the regulations set forth by the Securities and Exchange Commission in the USA, it can be overwhelming to ensure that your business is operating in accordance with all necessary guidelines. In this blog, we will explore the key considerations and best practices for managing compliance and reporting requirements for your cross-border business operations. Vamos começar!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Brazil must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Brazilian Company in the US

Even if none of the specific criteria apply, a Brazilian company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Brazil. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Brazilian companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Brazilian businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Brazil need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Brazilian Businesses:

Tax Treaties

As a Brazilian business operating in the United States, it’s crucial to understand that there is no tax treaty between Brazil and the USA. This absence of a tax treaty means that your company may face double taxation on income earned in the US, as both countries can claim the right to tax the same income. Without the protection of a tax treaty, you may be required to pay taxes on your US-sourced income to both the US government and the Brazilian government, potentially reducing your overall profits. It’s essential to consult with tax professionals in both countries to navigate this complex situation and explore strategies to minimize the impact of double taxation on your business operations.

Trade Considerations

When conducting business with the USA, Brazilian companies should be aware of the U.S.-Brazil Trade and Economic Cooperation Agreement (ATEC), which aims to facilitate trade and investment between the two countries. Additionally, it’s crucial to familiarize yourself with the Generalized System of Preferences (GSP), which provides duty-free treatment for certain products from developing countries, including Brazil. However, as regulations can vary significantly depending on the industry and specific products involved, it’s essential to thoroughly research and understand any sector-specific requirements, tariffs, or quotas that may apply to your business. Consult with trade experts, legal advisors, and relevant government agencies in both Brazil and the USA to ensure compliance with all applicable laws and regulations, including those related to customs procedures, product safety standards, and labeling requirements.

Your Path to Compliance: Key Takeaways for Brazilian Businesses in the U.S.

Operating a Brazilian business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.