Employing in Brazil

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Expanding into
Brazil

Economically, Brazil has one of the world’s leading mining industries and is rich in mineral reserves of gold, iron ore, nickel, and tin, niobium, which is used in construction and jet engines, and other rare earth elements. By 2050, Brazil is predicted to be a leading global supplier of raw materials. Agriculture and manufacturing are also key elements of the Brazil’s growing influence in the global economy.

And, of course … there’s an awful lot of coffee in Brazil, which is the world’s largest producer and reckoned to account for 40% of global consumption.

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Global Expansion is a step to make for any business, regardless of your goal. But the opportunities that can come with an expansion can be stimulating as well as intimidating and confusing, especially when you consider all of the registration procedures that need to be done and the documentation required.

Going at it without the proper support can increase the costs, time and risks involved.

The legwork and potential red tape can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, primarily through our Employer of Record (EOR) framework.

It can be best utilised when businesses are just beginning their expansion process and require more information before incorporating an entity and fully establishing themselves in that market.

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Country EOR Guide - Bradford Jacobs

Download our Guide to Brazil

Learn all about expanding into Brazil and see what we can do to make your expansion easier.

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Download our Guide to Brazil

Learn all about expanding into Brazil and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs
DOWNLOAD GUIDE

Hiring Staff
in Brazil

The economy of Brazil is the largest in Latin America and the Southern Hemisphere and the third-largest in the Americas. The economy is an upper-middle income developing mixed economy, Brazil being a newly industrialised country.

After rapid growth in preceding decades, the country, which historically had an economy in the top ten largest, entered an ongoing recession in 2014 amid a political corruption scandal and nationwide protests. The economy started to recover in 2017. In 2022, according to the International Monetary Fund (IMF), Brazil has the largest gross domestic product expenditure (GDP) and purchasing power parity. The Brazilian nominal GDP is USD 1.833 trillion, 12thworldwide.

According to the World Economic Forum, Brazil was the top country in the upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among the BRICS economies. Necessary steps taken since the 1990s toward fiscal sustainability and measures taken to liberalise and open the economy have significantly boosted the country’s competitiveness fundamentals, providing a better environment for private-sector development.

Brazil is a member of diverse economic organisations, such as the Southern Common Market (MERCOSUR), the Forum for the Progress and Integration of South America (PROSUR), G20, the World Trade Organisation (WTO), the Paris Club, the Cairns Group, and under negotiation to be a permanent member of the OECD.

Brazil calls them Small and Micro Enterprises (SMEs). Brazilian SMEs represent 98.5% of all businesses (11.5 million), amounting to 27% of Brazil’s GDP and 41% of the total payroll.

The Brazilian SMEs are qualified solely by revenue, at a maximum revenue of BRL 4,8 million/year (EUR 865,366 – USD 908,100), considerably smaller than a micro-enterprise by EU terms (€2 million, max ten employees). Between 2007 and 2019, 12,4 million jobs were created by SMEs. In 2020, SMEs hired 293 200 employees, while larger firms dismissed 193 600 workers.

Country:
Brazil
Local Currency:
Brazilian real (BRL)
Time Zone:
Brasilia Time (BRT) 4 time zones: from UTC -2 to -5
Country Dial Code:
+55
Tax Year:
1 January – 31 December (calendar year)
VAT:
17%
National Minimum Wage (2023):
BRL 1,212/month (EUR 218.89 – USD 230.60)
Taxpayer Identification Number (TIN):
The Secretariat of the Federal Revenue of Brazil (RFB) assigns a unique number to each person enrolled in its registries.
For individuals: the Cadastro de Pessoas Físicas (CPF) is the number attributed to nationals and residents taxpayers.
For entities: the Cadastro Nacional da Pessoa Jurídica (CNPJ) is the number attributed to taxpaying entities.
Main trading partners (2021):

Main Import partners: China, the United States, Argentina, Germany, India.

Main Export Partners: China, the United States, Argentina, the Netherlands, Chile

Hiring Staff
in Brazil

The economy of Brazil is the largest in Latin America and the Southern Hemisphere and the third-largest in the Americas. The economy is an upper-middle income developing mixed economy, Brazil being a newly industrialised country.

After rapid growth in preceding decades, the country, which historically had an economy in the top ten largest, entered an ongoing recession in 2014 amid a political corruption scandal and nationwide protests. The economy started to recover in 2017. In 2022, according to the International Monetary Fund (IMF), Brazil has the largest gross domestic product expenditure (GDP) and purchasing power parity. The Brazilian nominal GDP is USD 1.833 trillion, 12thworldwide.

According to the World Economic Forum, Brazil was the top country in the upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among the BRICS economies. Necessary steps taken since the 1990s toward fiscal sustainability and measures taken to liberalise and open the economy have significantly boosted the country’s competitiveness fundamentals, providing a better environment for private-sector development.

Brazil is a member of diverse economic organisations, such as the Southern Common Market (MERCOSUR), the Forum for the Progress and Integration of South America (PROSUR), G20, the World Trade Organisation (WTO), the Paris Club, the Cairns Group, and under negotiation to be a permanent member of the OECD.

Brazil calls them Small and Micro Enterprises (SMEs). Brazilian SMEs represent 98.5% of all businesses (11.5 million), amounting to 27% of Brazil’s GDP and 41% of the total payroll.

The Brazilian SMEs are qualified solely by revenue, at a maximum revenue of BRL 4,8 million/year (EUR 865,366 – USD 908,100), considerably smaller than a micro-enterprise by EU terms (€2 million, max ten employees). Between 2007 and 2019, 12,4 million jobs were created by SMEs. In 2020, SMEs hired 293 200 employees, while larger firms dismissed 193 600 workers.

Country:
Brazil
Local Currency:
Brazilian real (BRL)
Time Zone:
Brasilia Time (BRT) 4 time zones: from UTC -2 to -5
Country Dial Code:
+55
Tax Year:
1 January – 31 December (calendar year)
VAT:
17%
National Minimum Wage:
BRL 1,212/month (EUR 218.89 – USD 230.60)
Taxpayer Identification Number (TIN):
The Secretariat of the Federal Revenue of Brazil (RFB) assigns a unique number to each person enrolled in its registries.
For individuals: the Cadastro de Pessoas Físicas (CPF) is the number attributed to nationals and residents taxpayers.
For entities: the Cadastro Nacional da Pessoa Jurídica (CNPJ) is the number attributed to taxpaying entities.
Main trading partners (2021):

Main Import partners: China, the United States, Argentina, Germany, India.

Main Export Partners: China, the United States, Argentina, the Netherlands, Chile

The Main Sectors of the Brazilian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Agriculture

Brazil is the world’s largest producer of sugarcane, soy, coffee, orange, guaraná, açaí and Brazil nut; is one of the top 5 producers of maise, papaya, tobacco, pineapple, banana, cotton, beans, coconut, watermelon and lemon; is one of the top 10 world producers of cocoa, cashew, avocado, tangerine, persimmon, mango, guava, rice, sorghum and tomato; and is one of the top 15 world producers of grape, apple, melon, peanut, fig, peach, onion, palm oil and natural rubber. Brazil is one of the world’s largest countries in the production of animal proteins. In 2019, the country was the world’s largest exporter of chicken meat. It was also the second-largest producer of beef, the world’s third-largest producer of milk, the world’s fourth-largest producer of pork and the seventh-largest producer of eggs worldwide.

In 2019, Brazil’s mining figures were as follows: the world’s largest producer of niobium (88.9 thousand tons), the 2nd largest world producer of tantalum (430 tons), and iron ore (405 million tons); the 3rd largest world producer of graphite (96 thousand tons), the 4th largest world producer of manganese (1.74 million tons), of bauxite (34 million tons), and vanadium (5.94 thousand tons); the 5th largest world producer of lithium (2.4 thousand tons); the 6th largest world producer of tin (14 thousand tons); the 8th largest world producer of nickel (60.6 thousand tons), and phosphate (4.7 million tons); the 9th largest world producer of salt (7.4 million tons); the 12th largest world producer of gold (90 tons); the 13th largest world producer of gypsum (3 million tons); and the 14th largest world producer of copper (360 thousand tons) and of titanium (25 thousand tons).

n 2017, the Southeast was responsible for 58% of the value of industrial transformation in Brazil, followed by the South (19.6%), Northeast (9.9%), North (6.9%) and Midwest (5.6%). São Paulo in 2017 had an industrial GDP of BRL 378.7 billion, equivalent to 31.6% of the national industry and employing 2,859,258 workers. The main industrial sectors are construction (18.7%), food (12.7%), chemicals (8.4%), public utility industrial services, such as Electricity and Water (7.9%) and Motor Vehicles (7.0%). These five sectors concentrate 54.7% of the state’s industry. Brazil has the second-largest manufacturing sector in the Americas, with industries ranging from automobiles, steel and petrochemicals to computers, aircraft, and consumer durables. The World Bank lists the major producing countries annually, based on the total production value.

For more information download our Guide to Brazil here

Energy

Brazil was the 10th largest oil producer in the world in 2019, with 2.8 million barrels/day. The production manages to supply the country’s demand. In January this year, 3.168 million barrels of oil per day and 138.753 million cubic meters of natural gas were extracted. Brazil is also one of the leading world producers of hydroelectric power. In 2019, Brazil had 217 hydroelectric plants, with an installed capacity of 60.16% of the country’s energy generation. In the total generation of electricity in 2019, Brazil reached 170,000 megawatts of installed capacity, more than 75% from renewable sources (the majority, hydroelectric). In 2021 Brazil was the 7th country in the world regarding installed wind power (21 GW) and the 4th largest producer of wind energy in the world (72 TWh), behind only China, USA and Germany. As of October 2022, according to ONS, the total installed capacity of photovoltaic solar was 21 GW, with an average capacity factor of 23%.

Tourism in Brazil is a growing sector and key to the economy of several regions of Brazil. The country had 6.589 million visitors in 2018, ranking in terms of international tourist arrivals as the second leading destination in South America after Argentina and third in Latin America after Mexico and Argentina. Brazil offers both domestic and international tourists an ample range of options, with natural areas being its most popular tourism product, a combination of leisure and recreation, mainly sun and beach, and adventure travel, as well as historical and cultural tourism. Among the most popular destinations are beaches at Rio de Janeiro and Santa Catarina, beaches and dunes in the Northeast Region, business trips to São Paulo city, cultural and historical tourism in Minas Gerais, the Iguazu Falls and the Pantanal in the Centre-West Region.

The Main Sectors of the Brazilian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Agriculture

Brazil is the world’s largest producer of sugarcane, soy, coffee, orange, guaraná, açaí and Brazil nut; is one of the top 5 producers of maise, papaya, tobacco, pineapple, banana, cotton, beans, coconut, watermelon and lemon; is one of the top 10 world producers of cocoa, cashew, avocado, tangerine, persimmon, mango, guava, rice, sorghum and tomato; and is one of the top 15 world producers of grape, apple, melon, peanut, fig, peach, onion, palm oil and natural rubber. Brazil is one of the world’s largest countries in the production of animal proteins. In 2019, the country was the world’s largest exporter of chicken meat. It was also the second-largest producer of beef, the world’s third-largest producer of milk, the world’s fourth-largest producer of pork and the seventh-largest producer of eggs worldwide.

In 2019, Brazil’s mining figures were as follows: the world’s largest producer of niobium (88.9 thousand tons), the 2nd largest world producer of tantalum (430 tons), and iron ore (405 million tons); the 3rd largest world producer of graphite (96 thousand tons), the 4th largest world producer of manganese (1.74 million tons), of bauxite (34 million tons), and vanadium (5.94 thousand tons); the 5th largest world producer of lithium (2.4 thousand tons); the 6th largest world producer of tin (14 thousand tons); the 8th largest world producer of nickel (60.6 thousand tons), and phosphate (4.7 million tons); the 9th largest world producer of salt (7.4 million tons); the 12th largest world producer of gold (90 tons); the 13th largest world producer of gypsum (3 million tons); and the 14th largest world producer of copper (360 thousand tons) and of titanium (25 thousand tons).

In 2017, the Southeast was responsible for 58% of the value of industrial transformation in Brazil, followed by the South (19.6%), Northeast (9.9%), North (6.9%) and Midwest (5.6%). São Paulo in 2017 had an industrial GDP of BRL 378.7 billion, equivalent to 31.6% of the national industry and employing 2,859,258 workers. The main industrial sectors are construction (18.7%), food (12.7%), chemicals (8.4%), public utility industrial services, such as Electricity and Water (7.9%) and Motor Vehicles (7.0%). These five sectors concentrate 54.7% of the state’s industry. Brazil has the second-largest manufacturing sector in the Americas, with industries ranging from automobiles, steel and petrochemicals to computers, aircraft, and consumer durables. The World Bank lists the major producing countries annually, based on the total production value.

For more information, download our Guide to Brazil here

Energy

Brazil was the 10th largest oil producer in the world in 2019, with 2.8 million barrels/day. The production manages to supply the country’s demand. In January this year, 3.168 million barrels of oil per day and 138.753 million cubic meters of natural gas were extracted. Brazil is also one of the leading world producers of hydroelectric power. In 2019, Brazil had 217 hydroelectric plants, with an installed capacity of 60.16% of the country’s energy generation. In the total generation of electricity in 2019, Brazil reached 170,000 megawatts of installed capacity, more than 75% from renewable sources (the majority, hydroelectric). In 2021 Brazil was the 7th country in the world regarding installed wind power (21 GW) and the 4th largest producer of wind energy in the world (72 TWh), behind only China, USA and Germany.

Tourism in Brazil is a growing sector and key to the economy of several regions of Brazil. The country had 6.589 million visitors in 2018, ranking in terms of international tourist arrivals as the second leading destination in South America after Argentina and third in Latin America after Mexico and Argentina. Brazil offers both domestic and international tourists an ample range of options, with natural areas being its most popular tourism product, a combination of leisure and recreation, mainly sun and beach, and adventure travel, as well as historical and cultural tourism. Among the most popular destinations are beaches at Rio de Janeiro and Santa Catarina, beaches and dunes in the Northeast Region, business trips to São Paulo city, cultural and historical tourism in Minas Gerais, the Iguazu Falls and the Pantanal in the Centre-West Region.

Commercial Laws in
Brazil

Labour Law in Brazil

The most popular option for opening a subsidiary in The Republic of Brazil is a limited liability company (Sociedade Empresária Limitada) or a corporation (Sociedade Anônima), both of which offer protection against liability for the parent company and shareholders.

Establishing a legal entity in Brazil is essential for companies intending to hire staff and run their payroll. This involves operating within the online digital eSocial program for registering with Federal Revenue Service (Receita Federal do Brasil, RFB) and the Instituto Nacional do Seguro Social (INSS) for social insurance, among other procedures.

There is more. The employer’s working relationship with staff is strictly regulated in Brazil by the Consolidation of Labour Laws Decree (Consolidação das Leis do Trabalho), known as the Labour Code (CLT). Statutory regulations also come from the Federal Constitution, Social Security Law, decrees and Collective Bargaining Agreements (CBAs).

The Special Department of Federal Revenue of Brazil (Secretaria Especial da Receita Federal do Brasil), most commonly referred to as Receita Federal (RFB), is the Brazilian federal revenue service agency and a secretariat of the Ministry of the Economy. The bureau has the role of administrating tax collection and the customs of Brazil. The division of tax authorities between the Federation, the 26 Federal States and the Municipalities are as follows.

The Federation has the authority on:

  • Income tax (IRPF),
  • Corporate tax (IRPJ + CSLL),
  • Industrialised products tax (IPI),
  • Credit, exchange, stock market, insurance (IOF),
  • Foreign trade tax (imports, exports),
  • Rural land tax (ITR),
  • Personal assets (IGF),
  • Employer contributions (INSS),
  • Social contributions (PIS and COFINS),
  • Compulsory Provident Fund (FGTS),
  • Contribution to Interventions in the Economic Domain (CIDE).

The Federal States have authority on:

  • Services, transport, communication and movement of goods tax (ICMS),
  • Annual vehicle license (IPVA),
  • Inheritance tax (ITCMD).

The Municipalities have authority on:

  • Tax on services (ISS),
  • Urban land sale tax (IPTU),
  • Tax on real estate and related rights (ITBI).

In addition to specific registration procedures via the eSocial system, employers face other considerations when hiring, including:

  • Written contracts are not legally required but are advisable, and the basic terms and conditions of employment are detailed in the employee’s Work and Social Security Card (Carteira de Trabalho e Previdência Social, CTPS) and the employer’s employment files.
  • The CTPS belongs to the employee, is carried at all times and is retained by them when employment ends.
  • Where eSocial operates, the Digital Employee’s Workbook replaces the CTPS.
  • Employers must be given the employee’s Individual Taxpayer’s Registration number, the Cadastro de Pessoas Físicas (CPF), during the hiring process. This is assigned to all taxpaying Brazilian citizens and resident aliens.
  • The most common contract is indefinite or open-ended (Contrato por tempo indeterminado). Other options are fixed-term, temporary or occasional.
  • Probation periods cannot exceed 90 days.
  • Proposed employment of foreigners must be submitted to the Ministry of Labour.
  • Employers must publish workplace health and safety policies, such as the Occupational Health Medical Control Program (PCMSO) and Environmental Risk Prevention Program (PPRA).

Commercial Laws in
Brazil

Labour Law in Brazil

The most popular option for opening a subsidiary in The Republic of Brazil is a limited liability company (Sociedade Empresária Limitada) or a corporation (Sociedade Anônima), both of which offer protection against liability for the parent company and shareholders.

Establishing a legal entity in Brazil is essential for companies intending to hire staff and run their payroll. This involves operating within the online digital eSocial program for registering with Federal Revenue Service (Receita Federal do Brasil, RFB) and the Instituto Nacional do Seguro Social (INSS) for social insurance, among other procedures.

There is more. The employer’s working relationship with staff is strictly regulated in Brazil by the Consolidation of Labour Laws Decree (Consolidação das Leis do Trabalho), known as the Labour Code (CLT). Statutory regulations also come from the Federal Constitution, Social Security Law, decrees and Collective Bargaining Agreements (CBAs).

The Special Department of Federal Revenue of Brazil (Secretaria Especial da Receita Federal do Brasil), most commonly referred to as Receita Federal (RFB), is the Brazilian federal revenue service agency and a secretariat of the Ministry of the Economy. The bureau has the role of administrating tax collection and the customs of Brazil.

The division of tax authorities between the Federation, the 26 Federal States and the Municipalities are as follows.

The Federation has the authority on:

  • Income tax (IRPF),
  • Corporate tax (IRPJ + CSLL),
  • Industrialised products tax (IPI),
  • Credit, exchange, stock market, insurance (IOF),
  • Foreign trade tax (imports, exports),
  • Rural land tax (ITR),
  • Personal assets (IGF),
  • Employer contributions (INSS),
  • Social contributions (PIS and COFINS),
  • Compulsory Provident Fund (FGTS),
  • Contribution to Interventions in the Economic Domain (CIDE).

The Federal States have authority on:

  • Services, transport, communication and movement of goods tax (ICMS),
  • Annual vehicle license (IPVA),
  • Inheritance tax (ITCMD).

The Municipalities have authority on:

  • Tax on services (ISS),
  • Urban land sale tax (IPTU),
  • Tax on real estate and related rights (ITBI).

In addition to specific registration procedures via the eSocial system, employers face other considerations when hiring, including:

  • Written contracts are not legally required but are advisable, and the basic terms and conditions of employment are detailed in the employee’s Work and Social Security Card (Carteira de Trabalho e Previdência Social, CTPS) and the employer’s employment files.
  • The CTPS belongs to the employee, is carried at all times and is retained by them when employment ends.
  • Where eSocial operates, the Digital Employee’s Workbook replaces the CTPS.
  • Employers must be given the employee’s Individual Taxpayer’s Registration number, the Cadastro de Pessoas Físicas (CPF), during the hiring process. This is assigned to all taxpaying Brazilian citizens and resident aliens.
  • The most common contract is indefinite or open-ended (Contrato por tempo indeterminado). Other options are fixed-term, temporary or occasional.
  • Probation periods cannot exceed 90 days.
  • Proposed employment of foreigners must be submitted to the Ministry of Labour.
  • Employers must publish workplace health and safety policies, such as the Occupational Health Medical Control Program (PCMSO) and Environmental Risk Prevention Program (PPRA).

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