Brazil is one of the world’s largest economies and a country many have dreamed of relocating to. It boasts natural beauty, a friendly culture and endless beach parties. This guide covers how to acquire residency, how taxation works in Brazil and how to open a bank account.
Residency options
Brazil is a true immigrant country, with only a small percentage of its population native to the area. This is reflected in how accessible the country is and how its immigration system is structured. It is quite easy to become a resident, especially if you are retired or own a business which has been operating for at least five years. Unlike the likes of Chile and Uruguay, however, Brazil does not offer new residents any tax benefits. This, combined with worldwide taxation, means that it is not a suitable option for tax-free living. With that said, with a proper structure in place, your tax burden will be lower than in most other Latin American countries.
While there are a lot of different ways to qualify for residency, the two that are of interest to us are the retirement and startup options. To qualify for the retirement option, you must prove that you will receive at least 6000 BRL every month during your stay in Brazil (plus 2000 BRL per dependent). This income needs to come from passive sources (it cannot be employment / business income). To qualify for the startup option, you must prove that you own a business that has been in operation for at least five years outside Brazil. What is interesting about the startup option is that there is no investment requirement and that up to three visas can be issued using the same application. This can allow a non-retired couple to easily apply together. It is important to note, however, that the visas issued under the startup program are only valid for a period of two years. After two years, the visas have to be converted into normal investment visas (and you will have to meet all the requirements for this visa type).
The application process for the visas listed above is complex, overly bureaucratic and it will definitely test your patience. It is important to note that you must apply in your country of residency (you will need to provide a proof of legal residency). You should also apply at least three months before your planned move (I recommend four or five months). You can find the detailed requirements and procedures here. While this is the site of the Brazilian consulate in Houston, the requirements and procedures are the same in most countries. Brazil joined the Hague convention in 2016 so there is no need to certify documents anymore (an Apostille will suffice). Do note that your visa will be automatically canceled if you are absent from Brazil for a period of 24+ months.
After residing in Brazil for a period of four years, you will become eligible to apply for Brazilian citizenship. If you have a Brazilian child, are married to a Brazilian citizen or have rendered an extraordinary service to Brazil, the four year waiting period is reduced to just one year. If you have sought-after professional qualifications, the four year waiting period is reduced to two years. If you are involved with Brazilian industry, the waiting period is three years. In every cases, you will need to prove that you are sound of mind, can support yourself and can get by in Portuguese. You will also need to prove that you spent no more than 18 months outside Brazil during the four year period (proportional if applying using a shorter waiting period).
Taxation
While living in Brazil tax-free is nearly impossible, your tax burden there will likely be lower than in most other South American countries. Income up to around 1900 BRL is exempt, income from around 1900 BRL to around 2800 BRL is taxed at the rate of 7.5%, income from around 2800 BRL to around 3700 BRL is taxed at the rate of 15%. This goes on until you reach around 4700 BRL, from there the rate is a flat 27.5%. Capital gains are taxed as ordinary income (when received from outside Brazil) and at a progressive rate that ranges from 15 up to 22.5% (when received from inside Brazil). 20% of your income can be deducted every year (up to around 17000 BRL). As for residency rules, anyone residing in Brazil on a permanent visa (this includes the two visas listed above) will be considered a tax resident. There is no 183 days requirement for holders of permanent visas.
Compliance
As a tax resident, you must file an annual tax return. The fiscal year is the calendar year. The filing deadline is the last business day of April. If you own assets worth over 100000 USD outside Brazil, you must declare them on an annual basis to the central bank (before the 5th of April).
Powerful tax strategies
You can find powerful tax strategies in The Freedom Surfer course, especially in module two and three.
Banking
Brazil is not a suitable jurisdiction for non-resident banking. Opening an account usually requires a proof of residency and besides, there are better banking jurisdictions out there. If you do intend to become a resident, however, you will need a local bank account, realistically. This is due to the need to prove that you received the amount of money required to maintain your permanent visa (retirement visa) or that you received an income from your newly formed Brazilian company (startup visa). Having a local bank account will also help when it comes to paying bills and taxes.
Opening an account
To open a current account, you will need to visit a branch of your favorite bank in person. Bring your passport, resident ID card, tax ID number and a proof of address. You will likely need to provide details regarding your income so bring bank statements (showing deposits for at least three months). Once your account is opened, you will be issued with a debit card. You can also apply for a credit card (either via your income or a security deposit). I recommend Citibank and Santander. They are both stable international banks with a strong presence in the country.
Opening an account
To open a current account, you will need to visit a branch of your favorite bank in person. Bring your passport, resident ID card, tax ID number and a proof of address. You will likely need to provide details regarding your income so bring bank statements (showing deposits for at least three months). Once your account is opened, you will be issued with a debit card. You can also apply for a credit card (either via your income or a security deposit). I recommend Citibank and Santander. They are both stable international banks with a strong presence in the country.
International transfers
Transferring money to Brazil has become easier in recent years thanks to the rise of services like Wise and Revolut. Their rates usually beat the banks’ and they are far more secure than carrying large sums of cash.
