Layer 4: Corporate Setup
Market Entry Options for Brazil
Three ways to sell into Brazil — from zero-commitment direct exports to full subsidiary establishment. Each path trades setup complexity for control and margin.
Quick comparison
| Direct Export | Brazilian Subsidiary | Import Agent (Encomendante) | |
|---|---|---|---|
| Setup cost | Zero upfront | High | Moderate |
| Timeline | Immediate | 60–120 days | 30–45 days |
| RADAR | Not needed (buyer handles) | Apply for Limitada RADAR (unlimited) | Agent has their own RADAR |
| Control | Low | Full | Medium |
| Margin | Lower (split with importer) | Higher (direct sales) | Medium (agent fee 3–8%) |
Direct Export
Sell to a Brazilian importer
Advantages
- + No Brazilian entity needed
- + Fastest market entry
- + Zero setup cost
- + No local tax obligations
- + No employment law exposure
Disadvantages
- − No control over pricing to end customer
- − Dependent on importer relationship
- − No direct access to government procurement
- − Brand visibility limited to B2B
Brazilian Subsidiary
Establish a legal entity (CNPJ)
Advantages
- + Full control over pricing and distribution
- + Direct access to government procurement (PNCP)
- + Own CNPJ enables banking, contracts, hiring
- + Apply for Ex-Tarifário directly
- + Qualify for state incentives (FUNDAP, TTD)
Disadvantages
- − Complex setup: CNPJ, Inscrição Estadual, RADAR, digital certificate
- − Monthly tax obligations (DF, IRPJ, CSLL, PIS, COFINS, ISS)
- − Employment law is protective — dismissal costly
- − Need local accounting firm (obrigatório)
- − Transfer pricing rules on intercompany transactions
Import Agent (Encomendante)
Brazilian company imports on your behalf
Advantages
- + No CNPJ needed
- + Agent handles all customs and tax compliance
- + Faster than subsidiary setup
- + Access to agent's existing RADAR and logistics network
- + Can switch to subsidiary later
Disadvantages
- − Agent fee reduces margin (typically 3–8% of CIF)
- − Less control than subsidiary
- − Agent handles customer relationships
- − Some government contracts require direct presence
Setting up a Brazilian subsidiary: step by step
If you choose the subsidiary path, here's the typical sequence:
- Appoint a local legal representative — Brazilian law requires at least one partner or administrator residing in Brazil. Many foreign companies use a trusted employee or a professional nominee service.
- Register the company (CNPJ) — choose between Limitada (LTDA, similar to LLC) or S.A. (corporation). LTDA is simpler for most. Register with the Junta Comercial of your chosen state.
- Obtain Inscrição Estadual (IE) — state tax registration, required to sell goods. Apply at the state SEFAZ.
- Obtain Inscrição Municipal — municipal registration, required for services. Apply at the local prefeitura.
- Apply for RADAR — Receita Federal's importer/exporter registry. Limitada modality (unlimited import volume) requires financial documentation. RADAR guide →
- Get a digital certificate (e-CNPJ) — required for electronic invoices (NF-e), tax filings, and customs clearance.
- Open a bank account — Brazilian banks require CNPJ, contract social, and proof of address. Major banks: Itaú, Bradesco, Santander, BTG.
- Hire an accounting firm (escritório contábil) — mandatory. They handle monthly tax filings, payroll, and annual returns.
?What is a CNPJ?
CNPJ (Cadastro Nacional da Pessoa Jurídica) is Brazil's national business registry number — equivalent to an EIN (US), Company Number (UK), or Handelsregisternummer (Germany). Every company that imports into Brazil must have a CNPJ.
CNPJ registration guide?What is RADAR?
RADAR (Registro e Rastreamento da Atuação dos Intervenientes Aduaneiros) is Receita Federal's mandatory import/export authorization. Your Brazilian buyer needs active RADAR before any goods can clear customs. It comes in three modalities with different value limits.
RADAR & customs clearance guide?What is a Despachante Aduaneiro?
A despachante aduaneiro is a licensed customs broker — required for all import clearances in Brazil. They file declarations in Siscomex, classify NCM codes, pay taxes on your behalf, and handle inspections. Must hold a registration from Receita Federal.
How to choose a customs brokerCNPJ vs. no CNPJ: what you can and can't do
With CNPJ
- Import directly (own RADAR)
- Bid on government procurement
- Issue invoices (NF-e)
- Hire employees
- Open Brazilian bank account
- Apply for Ex-Tarifário
- Access state incentives (FUNDAP, TTD)
Without CNPJ
- Sell to Brazilian importers (direct export)
- Use an import agent (encomendante)
- Register trademarks (via local attorney)
- Cannot bid on government contracts
- Cannot import directly
- Cannot issue Brazilian invoices
- Cannot access state incentive programs
Common progression
Most foreign companies follow a staged approach:
This isn't universal — some companies jump directly to subsidiary if they have strong local demand or need government procurement access. The key is that every path above requires understanding Brazil's import cost structure.