For those who know Minas Gerais, the favorable business environment in the state is not surprising. Its ability to keep traditions in congruence with innovations is a big part of that success. ‘Minas’ appears as the second-best business environment in Brazil according to Doing Business Subnational 2021, a ranking created by the World Bank, which assesses the business environment in the country.
The institution assesses regulatory obstacles and best practices in the 26 states and the federal district, based on starting a business, obtaining a construction permit, registering properties, paying taxes, and executing contracts. Based on these criteria, it can be concluded that Minas Gerais is the second easiest state to open and maintain a business, behind only São Paulo.
ACMINAS – Commercial and Business Association of Minas
Active in Minas Gerais as a representative of the business class for over a century, its objective is to promote progress and economic development in Belo Horizonte and Minas Gerais. Its members can benefit from economic and legal advice, business mediation chambers, digital certification, registration consultations, ACMinas Journal, advertising spaces, incentives for the use of renewable energies, and projects to support internationalization.
BDMG – National Development Bank of Minas Gerais
This is the official player of Minas Gerais in the operations of public concessions in the Public-Private Partnership (PPP)
model. In addition, it supports the public and private sectors, offering credit to companies of all sizes and sectors, city halls, and municipal public service concessionaires.
Its work is based on impact, competitiveness, partnership, and culture of results presenting a strategy in line with the ‘2030 Agenda’ and the Sustainable Development Goals (SDGs) adopted by Brazil and other member countries of the United Nations (UN). The bank seeks to increase its operations innovatively, to improve the quality of life in Minas Gerais.
INVEST MINAS – Minas Gerais Investment and Foreign Trade Promotion Agency
The agency works for the development of Minas Gerais by attracting investments, promoting exports, and supporting companies located in the state. In addition, it has been acting as director of the World Association of Investment Promotion Agencies (WAIPA) in Latin America, projecting Minas Gerais internationally and enhancing its work. It is linked to the Minas Gerais State Secretariat for Economic Development (SEDE) and maintained by the Minas Gerais Economic Development Company (CODEMIG) and the Minas Gerais Development Bank (BDMG).).
CODEMGE – Minas Gerais Development Company
A state-owned company that is part of the Indirect Public Administration of the State of Minas Gerais. Its objective is to contribute to the development of ‘Minas’, fostering an environment of efficiency, simplification, and sustainability, in an attempt to generate greater value for the shareholder. It develops projects in the areas of aerospace, automotive, mining, metallurgy, energy, infrastructure, logistics, electronics, telecommunications, chemistry, security, medicines, biotechnology, and the environment, among others.
FIEMG – State of Minas Gerais Industry Federation
It represents the industrial sector of Minas Gerais, acting in the defense of its interests locally and nationally. It works in advising and consulting in the areas of credit, financing, tax, environment protection, and labor. It is through the entities that make up FIEMG that it can meet the demands of industry and society: Minas Gerais Industrial and Business Center (CIEMG), Social Service for Industry (SESI), National Service for Industrial Learning (SENAI), and Instituto Euvaldo Lodi (IEL).
Brazilian Support Service for Micro and Small Enterprises (Serviço Brasileiro de Apoio a Micro e Pequenas Empresas – SEBRAE)
Acting as a driving force behind the entrepreneurial movement in Minas Gerais, SEBRAE offers innovative products and solutions for those who want to open, diversify, expand or recover a business. They articulate efforts and resources with the government, the private sector, and civil society to boost small businesses, one of the main generators of employment in Brazil.
The Support Service for Micro and Small Enterprises is headquartered In Belo Horizonte, reaching 853 municipalities in Minas Gerais with services in nine different regional offices. In addition to serving companies separately, the project tries to develop and disseminate public policies that favor the growth of small businesses.
How to Set Up Foreign Companies in Minas Gerais
1st STEP: Definition of the legal structures for business.
Most common types:
- Individual Entrepreneur (EI)
- Individual Limited Liability Company (EIRELI)
- Limited Company (LTDA)
- Corporation (SA)
- Sole Proprietorship Limited (SLU)
2nd STEP: Consular Legislation for Documentation Copy of Foreign Partners
3rd STEP: Sworn translation of foreign documentation
4th STEP: Business registration at the Board of Trade (Junta Comercial); Minas Gerais State Board of Trade (Junta Comercial do Estado de Minas Gerais – JUCEMG – www.jucemg.mg.gov.br);
5th STEP: Registration of the National Register of Legal Entities (CNPJ)
6th STEP: Municipal Registration
7th STEP: Location Permit
8th STEP: State Registration
Foreign capital in Brazil can enter freely, without the need for government approval or restrictions on the amount invested. However, there are some activities provided for in the law that are exclusive to Brazilians.
Brazilian legislation has two definitions of “foreign capital”:
1) Financial or monetary resources introduced into the country for application in economic activities,
2) Goods, such as machinery and equipment, that enter Brazil without initial foreign exchange expenditure, intended for the production of goods or services.
According to the law, in both definitions, the resources must belong to individuals or legal entities resident, domiciled, or headquartered abroad.
Once the foreign capital arrives in the country, it must be registered within 30 days of its entry. Registration must be done by the receiving company and a foreign investor representative via the internet to be repatriated and have the profits and dividends remitted abroad.
Taxation of Financial Capital
Resources entering Brazil as foreign direct investment (FDI) are not subject to taxation. However, investment as a loan is subject to the Financial Operations Tax (IOF).
Profits and dividends, when repatriated abroad, are exempt from paying Income Tax (IR7) if the amount is equal to that registered with the Central Bank of Brazil. The amount that exceeds what was registered will be subject to income tax, the fee is between 15% and 25%, excluding cases where the shipment goes to countries that have applicable tax agreements with Brazil.
Profits obtained from foreign investment can be reinvested in Brazil, however, they must also be registered as foreign capital with the Central Bank of Brazil and, from then on, will become part of the tax calculation base levied on future divisions of the capital.
The issuance of visas in Brazil is related to the nature of the foreigner’s trip and stay in the country. To apply for a visa, simply visit the Ministry of Foreign Affairs Website and follow the steps recommended on the website: http://www.portalconsular.itamaraty.gov.br/vistos#precisa.
TYPES OF VISA
- VISIT VISA: granted to those who stay in Brazil for up to 90 days without migrating or exercising a remunerated activity.
- DIPLOMATIC VISA: granted to authorities and employees traveling to Brazil on an official mission.
- OFFICIAL VISA: granted to foreign administrative employees who travel to Brazil on an official mission, of a transitory or permanent nature, representing a foreign government or an international organization recognized by the Brazilian Government; or to foreigners who travel to Brazil under the official seal of their States;
- COURTESY VISA: granted to foreign personalities and authorities on an unofficial trip to Brazil; companions, dependents, and other family members who do not benefit from a Diplomatic or Official Visa for a family reunion; Foreign Mission workers based in Brazil or the Ministry of Foreign Affairs; foreign artists and athletes who travel to Brazil for a free and eminently cultural event.
- TEMPORARY VISA: this visa can be valid for up to 1 year and allows multiple entries to the country within this period. Foreigners must follow one of the situations described to receive the visa: academic research, human reception, health treatment, work, and investment use.
- INVESTOR VISA: The granting of a temporary visa for investors is conditioned to the residence permit issued by the Ministry of Labor and may be given to the immigrant administrator, manager, director, or executive with management powers, who comes to the country to represent the investing company.
- MERCOSUR CITIZENS: Nationals of the signatory States of the Mercosur Residency Agreement (Argentina, Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay) can obtain temporary residency in Brazil for up to 2 years. After this period, the temporary residence can be transformed into a residence for an indefinite period, a procedure that must be carried out with the Federal Police.