The possibility of a foreigner non-resident in Brazil to occupy a management position in brazilian companies

 

Por Lígia Cipullo

Among the many changes brought by the Law No. 14,195/2021, also known as Business Law (“Lei do Ambiente de Negócios”), which purpose is to simplify and reduce bureaucracy in the business environment, is the possibility of a foreigner non-resident in Brazil, to occupy management position in companies incorporated in the country.

In Brazilian Corporate Law, until the enactment of the aforementioned law, only persons residing in the country were authorized to occupy management or direction positions in limited liability companies[1] or corporations[2].

In this sense, Law No. 14,195/2021 brought an important change to paragraphs 1 and 2 of article 146 of Law No. 6,404/1976 – Corporation Law (“Lei das Sociedades Anônimas”), which previously provided solely for the possibility of a non-resident foreigner to be part of the board of directors of companies provided that the individual is legally represented in Brazil by a resident. Now, in addition to the above, the law foresees the possibility of foreigners not residing in the country to occupy management positions in limited liability companies, as well as director positions in corporations.

However, in order to be admitted, in accordance with article 146, paragraphs 1 and 2, of Law No. 6,404/1976, it is necessary that the foreigner domiciled abroad, who intends to become a manager or director, grants a power of attorney to a resident in Brazil, with powers for, up to at least 3 years, after the end of the term of management, to receive summons and subpoenas in lawsuits filed against him, based on the Brazilian Corporate Law and, in the case of publicly traded corporations, receive summons and subpoenas in administrative proceedings brought by the Brazilian Securities and Exchange Commission (“Comissão de Valores Mobiliários”).

Therefore, the effective and recent possibility marks a real advance for Brazilian Corporate Law, which, in addition to facilitating the environment for carrying out legal transactions, expands the freedom of choice of shareholders, bringing greater security and, as a consequence, attracts and enables new foreign investment in the country.

However, it is important to emphasize the condition imposed for the possibility of the non-resident manager to occupy his position. The chosen representative has additional obligations for a period of 3 (three) years after the end of his term, therefore, it is necessary to clearly establish the obligations that remain for the representative residing in Brazil during this period.

Finally, in view of the innovation, RMSA team is ready to assist, we have a specific department of International Law that advises foreign clients and has extensive know-how to advise companies in the definition of these obligations. We remain available for further clarification on the subject and for all the necessary support in relation to the appointment of a non-resident manager in companies incorporated in Brazil.

[1] Empresas de Responsabilidade Limitada.

[2] Sociedades Anônimas.