Start here - Absolute basics of investing in Brazil

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elma

New Member
Ok while the "buying and selling" thread has a lot of good advice, it's hard for new members to sift through the information to find the basics they need to purchase a property in Brazil safely.

So - everyone feel free to chip in your R$ 2 of advice and I'll try and keep this list updated. We want simple to understand, irrefutable facts about investing in Brazil for a non-resident. Opinions will not be counted and their posts deleted. Contradictory information will be debated until a consensus is reached. Constructive ideas and posts which help this thread be a source of good advice will be kept - anything else will be deleted. So if you are going to discuss something else, such as advice where and what to invest in - do it in another thread or your post WILL dissapear.

Thanks to everyone for their contributions:

The List

  1. Once you have decided on a property, you must sign a contract in Portuguese

  2. You should also sign a translation of the contract in your own language - read it!! Keep in mind that in case of conflict the Portuguese contract will prevail - the translation is merely a guideline so that you know what you are signing.

    Note: Both contracts should be signed by both parties and each party should get a copy. The very very basic information which needs to be in the contract is: the buyers name, sellers name, description of what is being sold/purchased, price (at least in BRL),the date, the CPF numbers of each party and the registration number of the property being bought/sold. If purchasing from a Pessoa Física (from an individual not from a company),and if the seller is married the contract should also be signed by spouse. There are 2 exceptions whereby the spouse does not have any rights to the property: A. If marriage regime is "comunhão parcial de bens" and the property was in the sellers possession before the marriage or B. For properties that seller acquired via inheritance (even if after marriage). or C. If the marriage regime is "Separaçao de Bens"

  3. 100% of the money for the purchase of your property in Brazil has to be registered as entering the country from you personally - never pay real estate agencies overseas or the developer anything more than a reservation fee and even then only when they agree to send that reservation fee to Brazil and register the money as coming from you. Make sure you get receipts for your payments proving that the money was sent to the country in your name. There is one exception where the money might be paid outside Brazil. This is possible if both the buyer and the seller are residents outside Brazil. This does not waive the fiscal obligations of the seller should he or she be liable to capital gain tax and the sale has to be registered in Brazil so that the property can be put in the buyers name. The reason for this is unless "Banco Central do Brasil" has the money registered as entering the country from you personally, when you come to sell the property, you won't be allowed to take the money out of Brazil unless you can prove where you got it from. If your money never came into the country to start with, obviously you never bought a house and therefore can't have made money from the sale of a house.

  4. If you are even a little bit unsure - retain legal representation - the cost of having a lawyer help you through the process is, in the long run, much much cheaper than losing your money. Let me say that again: Retain a lawyer to check the documentation! You should look at retaining legal counsel who speak both the language of the country you are buying in and your own language so that they can ensure that the documentation is not only legal but also suits your personal needs.

  5. For you to be able to purchase a property in Brazil, the builder must be able to present you with numerous legal documents. The key document to get for minimal peace of mind is the "Registo de Memorial de Incorporaçao". If you aren't familiar with the documentation yourself and/or don't speak the language, have the documentation checked by legal counsel. Bear in mind that this is only the first step of the legal checks. Unless you speak the language and are familiar with the process, hire legal representation who do speak the language and can check the documents for you.

  6. You need a CPF identification card to purchase property in Brazil. To sign the private purchase contract your passport number will do. However a CPF number is compulsory to sign the public notary deed, to have the property registered in your name in the Public Register and to get utilities bills issued in your name. It is much easier, cheaper and faster to arrange the CPF while you are in Brazil - however it can be done from overseas at a higher cost. The cost in Brazil is minimal. While previously overseas investors needed to file a tax return annually, in 2010 the law changed - overseas investors now only need to file a tax return each year if the value of their properties adds up to more than R$ 300.000,00 (previously it was R$ 80.000,00). Receita divulga novidades da Declarao do IRPF 2010

  7. Even if you can't check the legalities on the development you want to buy on, at least do your own checks on the developer or real estate agent who is selling it to you. Do a google search on the company name, any employees you know that work there and use "google translator" if the webpage results are in a foreign language.

  8. If the person you are purchasing from recommends one law firm and one law firm only, be wary

  9. To be able to sell property in Brazil, you need to be registered as a CRECI agent. Real Estate Agencies which are not based in Brazil are not subject to CRECI requirements and may make reservations on property in Brazil however any agency based in Brazil must have one. Overseas agents should have a CRECI registered agent as a local contact to tour their clients in Brazil if and when needed.

  10. Any marketing material for developments in Brazil must clearly show the CRECI license number of the agent doing the advertising and the registration number of the "Memorial de Registro de Incorporaçao" of the development being advertised provided the marketing material is being published in Brazil. Without these two reference numbers, the property can not be legally advertised in Brazil. Advertisements published outside of Brazil are not subject to these requirements.

  11. Capital Gains Tax in Brazil is not that complicated. Even if you use an accountant (recommended) you can double check to see if he is ripping you off by using a free capital gains tax program available for download from the Receita Federal. The base rate for CGT is 15% but by the time deductions are applied it works out to a bottom line of 5-6%. It shouldn't take you more that 5-10 minutes to plug in the numbers and the program will guide you through the steps. "Programa de Apuração dos Ganhos de Capital - GCAP2008" Receita Federal do Brasil

  12. Non-residents can not open bank accounts in Brazil - although it is legally possible it is in practice very hard to find a bank who will open a bank account for you without a residency in Brazil.

  13. Tourist can generally stay in Brazil for up to 90 days, renewable for another 90 days - meaning you can stay in Brazil for up to 180 days in any 360 day period - only a return ticket is required, and sufficient funds for the stay can be requested but hardly ever are. Brazil has a reciprocity policy - so if your country makes it hard for Brazilians to enter (US, Canada, Australia for example) then you may need a visa - we suggest you check before planning your trip.

  14. Other ways of obtaining a resident visa in Brazil include work visas, student visas, teaching visas, retirement visas, or if you are married to a Brazilian National or parent of a Brazilian child

  15. You can apply for an investor visa which will allow you to remain as a resident for 3 years. The investor visa, providing you have satisfied the authorities, is usually made permanent after 3 years, and only renewed for a specific period if you are borderline. If it is renewable, the law states that it should be for no more than 9 years and only if all the requirements are met. These requirements are (barring exceptions) invest R$ 150.000,00 or more into Brazil and with this investment create employment for Brazilian residents. The company needs to be set up and the money in Brazil before you can receive the investor visa. During the period in which you have applied but are waiting to receive the visa, the company and the money will have to be controlled by an "Administrador" - a person who is a resident in Brazil. There is currently no way to limit the powers of the "Administrador" so he/she should be chosen wisely. The purchase of residential property is not acceptable as an "operating business" for the investor visa. You need an office which can be subject to random inspections. More details here: http://www.propertyforum.com/forum/brazil-property/11877-brasilian-investment-law.html

  16. The income limit before you need to pay income tax is R$ 17.215,08 per year (February 2010) or R$ 1.434,59 per month


Do you need regestering the land to your own name if you intend to resell the land in short time? I have been told that another way to do that is if the solicitors hold the deeds for that time. I am not sure if that is common practice?! :hmmmm2:
 
debzor

debzor

New Member
Do you need regestering the land to your own name if you intend to resell the land in short time? I have been told that another way to do that is if the solicitors hold the deeds for that time. I am not sure if that is common practice?! :hmmmm2:
To not transfer into your name and then sell is illegal as you are evading paying the tax due.

No solicitor will hold in their name, as they then become liable for the tax. Brazilians will sometimes delay registering the property to delay paying the taxes, but this is very risky and can cause a number of problems.

I would also advise against flipping in the Brazilian market - due to the costs to buy and sell - unless you are here on the ground, very well advised, lucky or a seasoned Brazilian investor/developer.
 
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Maid Marion

New Member
I am talking to a reputable lawyer recommended by the Brazilian Embassy but he is in Rio and a lot of the searches etc have to be done in Fortaleza. He has colleagues in Fortaleza.
The benefit to me is that he is not embroiled in local politics and scams but is it going to be far cheaper to have a lawyer in Fortaleza and if so can you recommend anyone?
 
debzor

debzor

New Member
I am talking to a reputable lawyer recommended by the Brazilian Embassy but he is in Rio and a lot of the searches etc have to be done in Fortaleza. He has colleagues in Fortaleza.
The benefit to me is that he is not embroiled in local politics and scams but is it going to be far cheaper to have a lawyer in Fortaleza and if so can you recommend anyone?
I guess you will also want one who speaks good English? Have you tried Flavio Pinto?
 
debzor

debzor

New Member
Thanks for that but what can you tell me about him?
He is an attorney in Fortaleza who also speaks excellent English. I have had no direct dealings with him, but know others who have, and I have been included in correspondence. Once you have made 5 posts, I can pm his email address to you.
 
debzor

debzor

New Member
Is it not dodgy investing in Brazil??? :S
There are dodgy sellers, developers and agents everywhere in the world, just as in Brazil. Using a reputable and licensed broker and English speaking attorney, as well as carrying out your own due diligence will help a great deal towards a successful investment.
 
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Mineiro

Member
[/QUOTE][/QUOTE]Jmates unfortunately it is very "dodgy". Unfortunately corruption and dishonesty are endemic here in Brasil. My advise to anyone interested in investing here but doesn't live here, is don't. It's complicated enough for people who have lived here for years, never mind for gringos. Just look at the huge number of people on this site who have lost their money.
 
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LMM

New Member
Investing in Brazil

Is it not dodgy investing in Brazil??? :S
Investing in Brazil can be very dodgy in the sense that you must beware of the developers and sellers of the land. Make sure due diligence is done and you recieve and keep all items in writing. You may protect yourself by using a reputable brazilian lawyer who can take you through the correct steps and legal requirements for purchasing, but if you buy on a complex or development yet to be built, offered by a foreign company, it is common for the development never to come to fruition after they have taken your money and you own a plot of land with no road access, electricity or even worse no planning permission or environmental protections. I speak from experience. I can give you list of firms to avoid who currently have class actions in court against them.

The Brazilian legal system has a third world way about it, meaning it is incredibly slow and beaurocratic, and lawyers ask for large fees. Happy to give you advice if you private mail me or answer to this thread.
 
debzor

debzor

New Member
Investing in Brazil can be very dodgy in the sense that you must beware of the developers and sellers of the land. Make sure due diligence is done and you recieve and keep all items in writing. You may protect yourself by using a reputable brazilian lawyer who can take you through the correct steps and legal requirements for purchasing, but if you buy on a complex or development yet to be built, offered by a foreign company, it is common for the development never to come to fruition after they have taken your money and you own a plot of land with no road access, electricity or even worse no planning permission or environmental protections. I speak from experience. I can give you list of firms to avoid who currently have class actions in court against them.

The Brazilian legal system has a third world way about it, meaning it is incredibly slow and beaurocratic, and lawyers ask for large fees. Happy to give you advice if you private mail me or answer to this thread.
When buying off-plan (pre-construction) in Brazil, the document you need to ask to see for your protection is called 'Memorial de Incorporaçao'. The developer must have registered it with the local notary, and it is available for the public to view. Brazilians will know this, but, most probably, not all foreigners.
 
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LMM

New Member
Buying in Brazil

Thanks for the response. I have successfully purchased land in Brazil without my current problems, however in Fortaleza the developer had permission/licence to build renewable every two years at the time of purchase and did prove that by way of documents. However since 2009, Semace has refused to allow building permission, and the developer can do no more, hence the buyers of plots have lost out as they cannot build either. Unfortunately it seems nothing can protect against that particular outcome, or if the firm cease trade and run away with peoples money like Greenland Securities in Joao Pessoa, Paraiba who currently have a class action against them.

Have you heard of Kapital Nordeste Ltda, Kapital International Investments Ltd or Kapital Assets Ltd, which are all related companies? Would be very grateful your feedback if you have.
 
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LMM

New Member
Yes I have noticed some info about Kapital on the forum, but very little in 2012 and nothing on any legal action against them. I'm trying to find other victims of yet another non existent development. The principals of Greenland from my understanding were two irish guys sitting in a spanish jail, hopefully they are not in Brazil that has no extradition treaty. Peixoto and the related laywer leading the class action against the disappearing Steve Naish of Greenland securities, are asking for 20% of all the money any given victim spent, 10% up front, and are giving away no info as to whether assets are frozen or even existent. Greenland is no longer operating, but is only registered in Brazil, and have made no representations to any legal action made against them, and it is most likely they have scampered away with the money to sell more drugs.

However I now know that Peixoto staff in joao Pessoa and Rui Farias of Kapital Nordeste/Kapital International and Kapital Assets in Fortaleza are friends, and pulling the same expensive scam on gringoes, selling useless land at a high fee reserved for gringoes with no due diligence or Semace licences, not keeping their end of the bargain/contract and failing to complete these developments and disappearing. Brazil has been a money pit of thieves in my experience, bit like Russia right now.
 
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LMM

New Member
'The days of no extradition treaties with the UK or the EU ended years ago!'

There is some Bilateral agreement made in 1997, not an outright extradition treaty. However not very helpful given the content of my post. I'm looking for those who may have found a successful means of retrieving funds from unscrupulous businessmen and their dishonest lawyers that facilitate their dishonesty, I really don't care about Brazilian politics at this point, too much money stolen.

Would really appreciate comments from those with something helpful to add.
 
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Maxtris

New Member
@JMBroad,

Thank you, this is a very helpfull and informative post.
 
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cariocadagema

Guest
I wonder why nobody is mentioning the legal restrictions for foreigners to have property close to the sea.
 
debzor

debzor

New Member
Actually this topic has been discussed before on this forum, together with the various problems and solutions associated.

The easiest solution is to buy in a condominium on the beach and then there will be no restriction. The problem is not that a foreigner cannot own on the beach, but that the buyer needs special permission.

Hope this helps you.
 
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cariocadagema

Guest
The likelihood of a foreigner being restricted in buying beachfront property is very slim and has to do with national security. So unless you are buying somewhere that is strategically important to the armed forces, you aren't likely to have any problems.
The law says clearly that no foreigner is allowed to be owner of property, land, plots within a 100 meter distance from the sea, highwater line.
Foreigners are only allowed to have a limitted participation in beachfront condo appartments.
But no land or houses.
Only with permission of the president or his/her "Ministro da Fazenda"
I know that for decades this ran out of control, but Brasilia is working hard the last years to gain control over the situation again. Also lookong backwards, retroativo.
Who, foreigners, bought, it is and was illegal.
Left wing nationalistic leading politicians are upset, they only see "For Sale" at the beaches in the North East, not any "Vende-Se" sign.

Yes, its also (same law) forbidden for foreigners to have property close to strategic military objects, not only at the seaside, but everywhere in Brazil.

Noboby can be owner of the beach. never, no where.
Beach is public federal property.
Even if you have a private island here in Angra with a small beach, I am allowed to go there by boat with friends and family, and stay on that beach doing whatever I want.

Or if someone owns land at the beach, he must make a public passage every 100 or 150 meters to allow people to have acess to the beach.
The only private beach I know and been there several times, is the Inema beach within the Aratu Naval Base in Salvador. Beautiful beach by the way.
 
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cariocadagema

Guest
Thanks for your link, but...
the answer can not be a simple "I have never heard of that".
Its a fact, foreigners are not allowed owning property closer than 100 meters from the beach.
And only the president can authorize it.
I came to Brazil as an young emigrant in 1977.
Those days foreigners were not allowed to buy beachfront property.
The law hasn't changed, the only thing that changed is that nobody gives a damn about that law. Blame the local cartórios. The situation got completly out of control.
But as I sayd, Brasilia is trying to put order in this situation again.
You can read it everywhere:

"COMPRA DE IMÓVEIS POR ESTRANGEIROS:

Qualquer cidadão pode adquirir imóveis urbanos no Brasil, inclusive os estrangeiros. A única restrição existente é a compra de imóveis rurais ou terrenos situados na faixa de 100 metros ao longo da costa marítima brasileira. Essa restrição não se aplica no caso de unidade autônoma de condomínios, como compra de apartamentos em prédio situado em terreno de marinha."



or

"O investidor estrangeiro pode adquirir propriedades no Brasil, seja ele pessoa física ou jurídica?

Tanto as Pessoas físicas ou jurídicas estrangeiras podem adquirir propriedades e direitos reais relativos imóveis urbanos da mesma forma que as nacionais, desde que os mesmos não estejam localizados na faixa costeira, em áreas fronteiriças ou em áreas designadas como sendo de segurança nacional. "



This is a thing to consider before investing in beachfront property in Brazil.
Things can (and probably will) change again.
Like owning rural properties by foreigners is finaly regulated again as it was.
.
 
C

cariocadagema

Guest
Robh
Don't look at sites of (foreign) real estate agents and companies. Don't listen to them.
It's not of their interest that foreign investors and buyers know about this FACT.

Look at juridical AND government sites, consult a lawbook (DL # 9.760).
The results are all the same, its not allowed foreigners have beachfront properties. Properties closwer than 100 meters from high tide sea level.
If they have it, if its registered somewhere, it is, was and will be illegal.
Things are changing !


"Compra de imóveis no Brasil por pessoa física ou jurídica estrangeira

As pessoas físicas e jurídicas estrangeiras podem comprar imóveis no Brasil, sem qualquer restrição, desde que o imóvel não seja rural, não esteja na faixa costeira, fronteiriça ou de segurança nacional, caso em que será necessário o assentimento prévio da Secretaria-Geral do Conselho de Segurança Nacional."


or

Aquisição de imóvel por estrangeiro

No caso de imóvel urbano, a única restrição existente para o estrangeiro, estabelecida no Decreto-Lei 9.760/46, é aquela contida no seu art. 205, que veda a aquisição de imóvel ou terreno situado na faixa de 100 metros ao longo da costa marítima, salvo se autorizado o ato de aquisição pelo presidente da República ou pelo ministro da Fazenda. Essa restrição, todavia, não se aplica, no caso de aquisição de unidade autônoma em condomínio, como em prédio de apartamentos situado em terreno de marinha, regulado pelo regime da Lei 4.591/64.


or

Compra de imóveis por estrangeiros

Com o crescimento da economia em nosso país, é comum o interesse de estrangeiros querendo investir no mercado imobiliário. Cada vez mais, o Brasil está em evidência no exterior, atraindo muitos investidores com interesse em várias regiões do nosso país. A única restrição existente é a compra de imóveis rurais ou terrenos situados na faixa de 100 metros ao longo da costa marítima brasileira. Essa restrição não se aplica no caso de unidade autônoma de condomínios, como compra de apartamentos em prédio situado em terreno de marinha.
 
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