Annually, Brazilian companies need to deliver numerous ancillary filings. The content of these declarations may vary according to the type of Government requirements. By visualizing the Big-data information that the Government possesses, we can easily conclude that its breadth, increasingly, has grown.
Labor, accounting, tax data: The Brazilian government seeks to know and understand everything!
Therefore, when we reference electronic declaratory Registration-RDE, we enter in the financial nuances of accountability. The RDE is nothing more than a system from Central Bank of Brazil that records all foreign capital operations in Brazil or of Brazilian capital abroad. The records are classified into four pillars:
1. Brazilian Capitals abroad (RDE-CBE)
2. Portfolio Investments (RDE-Portfolio)
3. Financial transaction log
4. Foreign direct investment (RDE-IED)
The last, RDE-IED, is the manifestation of investments of foreign origin in Brazilian companies. For this type of declaration, the concept is a Brazilian company that has participated in the share capital of investors (whether this person is physical or legal) without residing in Brazil.
The periodicity of this statement is annual or quarterly, depending on the size of your company. Claims updates must be whenever the receiving company carries out an increase in capital, initial investment, updating of shareholders equity or capital, payment of dividends or interest on equity, purchase or sale of Companies and ultimately dissolution, liquidation. In addition, whenever there is a return of capital to the outside.
Deadlines for updating the RDE-IED registry
Here we need to separate the submission of events into two categories: update registration and the Periodic information Update.
Registry updates: For the registration updates, where there are events that change the equity interest of the foreign investor, for example. Mandatory the update must occur within 30 days.
Regarding changes related to foreign exchange transactions or international transfers in Reais (TIR), the deadline begins on the same day of liquidation from the exchange transaction or bank transfer.
Periodic information Update: We have two scenarios here. The first, for companies with assets or shareholders equity exceeding R$250.000.000,00. The second perspective covers companies that do not reach the ceiling of R$250.000.000,00.
For companies receiving foreign direct capital and with equity equal or bigger than 250 million, the following schedule applies:
- Until 31 March, relevant to the basic date of December 31 of the previous year;
- Until 30 June, relevant to the basic date of 31 March;
- Until 30 September, relevant to the basic date of 30 June;
- Until 31 December, relevant to the basic date of 30 September;
If the deadline for delivery of the event coincides with holidays or weekends, when there is no expedient in the Central Bank of Brazil, the period will be extended until the first working day thereafter.
Companies that have assets below 250 million, the declaration must be sent annually until March 31st.
RDE-IED Portal: Registering your company
Firstly, if the company does not yet have a CNPJ (National Registration of Legal Entities), it must register it in the CADEMP and forward a copy of its Articles of incorporation, or registration certificate to the email address firstname.lastname@example.org. If the investor is an individual, it is necessary to have a CPF (Individual Taxpayer ID), issued directly in the IRS or by diplomatic representations of Brazil abroad.
Moving forward to the next step. Whether or not you have a CNPJ, you must be accredited to the receiving investment company in the SISBACEN Portal. After accreditation is completed the inclusion of the data of the foreign investor, corporate framework, and other cadastral information of the company.
With this, you just need to fill in the following information:
1. Current corporate framework: Cadastral data of all partners, as long as investors (residing on Brazilian soil) are active or inactive, capital integrate, shareholders ‘ equity and the registration situation of your company. Corporate Events (capitalizations, disposals and exchanges, corporate reorganization and so on) must also be registered.
2. Financial economic statement: At this stage, the following data from the receiving company is manifested:
|Information to declare||Description|
|Paid-in Capital||Specify the total paid-in capital of the receiver, including shares or quotas, properties of equity instruments|
|Equity||Inform the total value of the net worth of the receiving company;|
|Active assets||Total value of the receiving company's assets;|
|Liabilities assets||Total amount of liabilities due (without equity of the company);|
|Profits and losses||-|
|Shared Profit on base period||-|
|Estimated value of company||-|
|Valuation Method||Specify the company's valuation method based on its estimated value. At this stage, it does not matter if the model applicable to your company is: Stock exchange listing; Existing negotiation; Discounted cash flow; Other forms of evaluation; Net worth;|
|Income and expenses arising from the evaluation of assets (impairment)||-|
|Income and expenses from exchange variation||-|
|Participation in voting power (%)||The voting power basically implies the voting capital of the organization. That is, the volume of common shares that gives voting power and participation in the company's corporate resolutions;|
|Investor's country of origin||-|
|Country of final controller||-|
3. Management of mandatory agents: The function of representatives of the recipient and the role of agents of the investor..
4. Investment movements
As another government arm for information gathering, the RDE-IED is fundamental not only to ensure respect for the legal aspects of financial transactions in Brazil but also, for the correct operation of the business that possesses capital from overseas here in Brazil.
This is a summary of what you face when you declare the RDE-IED. The level of the peculiarity of the information goes beyond the summary above. Therefore, we recommend that you contact your legal representative. Failure to comply with FDI standards, or the provision of incongruent, incomplete or non-term information implies penalties established by laws No. 4.131/1962 and No. 11.371/2006, and Circular No. 3.857/2017.