How to Verify a Company in Brazil? An Ultimate Guide

Brazil is an attractive market for foreign investment, as it holds half of the wealth that exists in South America and is replete with rich natural resources. On the other hand, it has a very complicated business environment considering the high costs of running operations, very knotty tax laws, and basically very strict regulatory systems. Some of the latest reforms included, for example, online business registration and laws on mediation of disputes for simplicity purposes. Although this is an improving trend, Brazil remains in the top ten countries in the world in terms of business complexity, so companies will have to be highly knowledgeable of local regulations and the “Custo Brasil”—the added cost of doing business in Brazil.

Although business networking in Brazil has quite good opportunities, verifying the legitimacy of companies is important before partnering with them. The company verification process involves the inspection of its legal status and the persons who own it. In this comprehensive guide, read more about how to verify a company in Brazil before establishing a partnership with them.

How to Verify if a Company is Registered in Brazil?

If you want to verify a company in Brazil, the first step is to screen it against the government registry. The company verification portal is maintained by the Junta Commercial do Estado de São Paulo (JUCESP), the commercial state of the State of  São Paulo. The primary role of this registry is to register businesses, providing access to legal and company information for businesses operating within the country.

Step-by-Step Guide to Verify a Company in Brazil

To verify a company in Brazil, two types of searches are normal and advanced search. In the normal search, you will enter the company’s name. To fetch the required documents on the government portal, you have the following options:

• Digite o nome da empresa (Company Name): This is the official and registered name of a business. To verify a company in Brazil, just enter it, and you will be directed to the company you desire.
• Razão social (Legal Name): It refers to a company’s legal or corporate name in Brazil. It is the official name under which the organization is registered. Furthermore, it also identifies the company for legal and regulatory purposes.
• CNPJ: A company in Brazil can also be verified from the Cadastro Nacional da Pessoa Jurídica (CNPJ) number. This number is assigned to the companies by the Federal Revenue of Brazil and is quite similar to the tax identification number.
• NIRE: Número de Identificação do Registro de Empresas (NIRE) is a registration number that shows a company is officially registered and authorized to operate in Brazil. It is issued by each state’s Commercial Registry and is necessary for the legal establishment, obtaining a tax ID (CNPJ), and operating in Brazil’s formal economy.

In the advanced search, a company in Brazil can also be verified through the following input parameters:

• Company name
• Capital Range
• Street
• Document number

Challenges to Verify a Company in Brazil

• Intricate Tax Framework

Taxation is one of the biggest obstacles to company growth in Brazil, with tax representing up to 33% of the country’s GDP. Firms are sometimes faced with problems in their tax requirement and obligations of tax legislation. New business companies face more problems trying to meet the complex system of taxes in Brazil. Tax laws in different regions complicate the issue and add further obstacles to the company screening.

• Language Barrier

The Brazil Business Registry makes business verification easy in the local Portuguese language, which handicaps non-native companies in corporate compliance. Mistakes in translation and inaccuracies in information create unintended significant implications for corporate onboarding. Non-native companies suffer in ensuring compliance through language barriers that do not allow them to completely grasp and understand critical laws, regulations, and compliance requirements.

Also Read: How to Verify a Company in Hungary? An Ultimate Guide

How to Verify Ultimate Beneficial Owners in Brazil?

All registered businesses in Brazil must be registered with the corporate registry for CNPJ and must identify their Ultimate Beneficial Owners (UBOs). To verify a company in Brazil, UBO identification is an essential prerequisite. As per the country’s standard, the threshold of UBO is up to 25%, and it is the persons who ultimately directly or indirectly exercise power over the organization. Brazil’s official business register does not contain information about the beneficial owner. Thus, there is a major challenge to the verification of a business. The vagueness of the ownership structure may increase the risk during the business onboarding process. Brazil’s privacy law is stringent, allowing minimal access to such information. This is the primary barrier: a lack of information regarding UBOs while performing business verification checks in Brazil, which deters openness and accountability in the business environment, most notably corporate ownership.

Implementing AML Checks on Businesses in Brazil

In Brazil, legal measures for suspending and confiscating relation to money laundering are sufficiently inclusive. Company verification procedures in the Brazilian area are of two types, comprising business and beneficial owners. Implementing both these checks to verify a company in Brazil is crucial to ensuring a transparent corporate framework. AML checks on businesses in Brazil include:

• Sanctions Screening: This check ensures that the business is not on the sanction list.

• Transaction Monitoring: It highlights companies that may have suspicious transactions.

• Enhanced Due Diligence: EDD is a type of check that is applied to high-risk businesses and persons. To verify a company in Brazil, businesses must ensure Enhanced Due Diligence to ensure risk-free operations.

• PEP-Check: PEP check screens individuals in prominent public positions for corruption, bribery, or money laundering risks.

Brazilian Licenses and Certifications

• Brazilian Central Bank

This Brazilian central bank, Banco Central De Brasil, researches monetary policy and compliance regulation. The BCR researches foreign exchange operations by managing international investment and trade to minimize the risk attached to any operation.  The Central Bank also collects relevant economic data to understand emerging trends. This makes sure that the prevailing financial system in Brazil remains stable.

• Brazilian Federal Revenue Service

This regulatory body is often called Receita Federal and manages revenue services in Brazil. The Brazilian Federal Revenue Service also manages the Brazilian national registry, which checks transactions from corporate entities. In Brazil, the number for CNPJ, or “Cadastro Nacional da Pessoa Jurídica,” is a unique and reliable business identification number.

• Comissão de Valores Mobiliários

The overall regulatory framework of the securities market is regulated by the Securities and Exchange Commission of Brazil to ensure fair and transparent company activities. Further, verifying ‘know your business‘ also represses organizations engaging in fraudulent or illegal financing.

Read More: How to Verify a Company in Italy? An Ultimate Guide

How Can The KYB Help Verify Business in Brazil?

Company data in Brazil is scattered in different registries, but the KYB centralizes data from several legitimate company registries. With The KYB, you can eliminate the possibility of risk or fraud in business onboarding as we provide full AML screening solutions. Through KYB, 25+ official sources of data are brought together into a single platform to verify companies in Brazil. We have real-time data integration, multiple integration methods – such as a very fast API – and record-keeping, which can be used to validate a company’s legal and financial position. Our business verification services in Brazil are credible, covering information on businesses in various industries, with databases of 300M+ million companies spreading over 250 countries and states.

Trust The KYB and contact us today to verify a company in Brazil and ensure compliance with international standards.