A U.S. company does not need to own a Brazilian subsidiary before Brazilian law becomes relevant to its business.
An American company may have Brazilian customers, suppliers, distributors, contractors, employees, investments or commercial partners while its management and legal department remain entirely in the United States. Even so, contracts, payments, employment relationships, data processing, corporate transactions and disputes connected to Brazil may be affected by Brazilian law.
For companies in this position, obtaining Brazil legal advice is not limited to litigation or company formation. Brazilian counsel can also assist with preventive legal review before money is transferred, contractual commitments are made or commercial relationships become difficult to unwind.
Companies that require broader assistance can review the firm’s legal advisory services for foreign companies in Brazil.
When does a U.S. company need legal advice in Brazil?
The need for Brazilian legal advice depends on what the U.S. company is actually doing in Brazil.
Common situations include:
- entering into contracts with Brazilian companies;
- purchasing products or services from Brazilian suppliers;
- selling products or services to Brazilian customers;
- appointing distributors or commercial representatives;
- hiring employees or independent contractors in Brazil;
- investing in or acquiring a Brazilian company;
- incorporating a Brazilian subsidiary;
- licensing software, technology or intellectual property;
- transferring or processing personal data involving Brazil;
- recovering unpaid invoices from Brazilian customers;
- receiving a legal notice, administrative communication or lawsuit;
- terminating a Brazilian commercial relationship;
- appointing an attorney-in-fact or other local representative.
Some matters can be handled as individual projects. Others create recurring legal needs that may justify ongoing legal support in Brazil.
U.S. contracts should not simply be reused in Brazil
One of the most frequent issues for international companies is the use of a U.S. contract template without evaluating its consequences under Brazilian law.
Brazilian commercial contracts are generally governed by principles established in the Brazilian Civil Code, including contractual freedom, allocation of risks and good faith.
The fact that a contract was prepared by American counsel does not make the document invalid in Brazil. The relevant question is whether the contractual structure produces the intended legal and commercial effects when Brazilian law, Brazilian counterparties, assets or performance obligations are involved.
Issues that may require local review include:
- governing law;
- jurisdiction;
- arbitration;
- limitation of liability;
- indemnification;
- payment provisions;
- currency and exchange mechanisms;
- warranties;
- guarantees;
- exclusivity;
- minimum purchase requirements;
- termination rights;
- post-termination obligations;
- intellectual property;
- confidentiality;
- non-compete restrictions;
- dispute resolution;
- evidence required to enforce payment obligations.
Brazilian private international law must also be considered in cross-border agreements. Article 9 of the Law of Introduction to Brazilian Law — LINDB contains rules concerning the law applicable to obligations, while the Brazilian Code of Civil Procedure addresses Brazilian jurisdiction and exclusive foreign forum clauses in international contracts.
Companies negotiating substantial agreements can obtain a more focused review through a contract lawyer in Brazil for foreign companies.
Governing law, jurisdiction and arbitration require specific analysis
Clauses stating that U.S. law applies or that disputes must be resolved before an American court should not be treated as boilerplate.
Brazilian law contains its own rules concerning international jurisdiction, applicable law and recognition of foreign decisions.
For example, Article 25 of the Brazilian Code of Civil Procedure provides that Brazilian courts generally will not hear a case when an international contract contains an exclusive foreign forum clause invoked by the defendant, subject to exceptions including matters of exclusive Brazilian jurisdiction.
Arbitration can also be used in Brazil for disputes involving disposable patrimonial rights under the Brazilian Arbitration Act.
The appropriate mechanism depends on the transaction, location of assets, likely disputes, enforcement strategy and bargaining power of the parties.
A dispute-resolution clause should therefore be analyzed not merely from the perspective of where a company would prefer to litigate, but also from the perspective of where a future judgment or award may actually need to be enforced.
Brazilian counterparties should be verified before major commitments
Legal advice can also be preventive.
Before granting credit, making a significant advance payment, appointing a distributor, transferring intellectual property or entering a long-term commercial relationship, a U.S. company may need to verify the Brazilian counterparty.
The review can include corporate records, authority of representatives, litigation, insolvency exposure, relevant registrations and other legally available information.
This is particularly important when a transaction depends heavily on representations made by a local distributor, supplier, customer or business partner.
Companies considering a significant transaction can use legal due diligence in Brazil to evaluate risks before making the commercial commitment.
Establishing operations in Brazil creates additional corporate issues
A distinction should be made between merely doing business with Brazil and establishing a business operation in Brazil.
A U.S. company may have Brazilian contractual relationships without automatically creating a Brazilian subsidiary. However, the legal structure must be assessed according to the activity actually performed.
Brazilian law imposes specific rules when a foreign company intends to establish a branch, agency or establishment in the country. The LINDB provides that foreign organizations cannot maintain branches, agencies or establishments in Brazil before their organizational documents are approved in accordance with Brazilian requirements.
Another common structure is the incorporation of a Brazilian legal entity owned by foreign shareholders.
In this scenario, issues may include:
- corporate structure;
- shareholders;
- powers of attorney;
- local representatives;
- articles of association;
- management;
- capital contributions;
- corporate resolutions;
- foreign investment reporting;
- beneficial ownership information;
- banking and operational documentation.
Foreign direct investment in a Brazilian entity may also trigger reporting obligations through the Central Bank of Brazil’s SCE-IED system, depending on the investment and applicable reporting requirements.
Companies evaluating local incorporation or investment can review the firm’s information concerning a corporate lawyer in Brazil.
Hiring people in Brazil creates employment risks
U.S. companies increasingly engage Brazilian professionals remotely.
The contractual label used by the parties is not, by itself, sufficient to determine whether a relationship is an employment relationship or an independent commercial relationship.
The Brazilian Consolidation of Labor Laws — CLT establishes rules governing employment relationships and recognizes that work performed remotely may still satisfy the requirements of an employment relationship.
For this reason, a U.S. company hiring personnel in Brazil should evaluate the actual working arrangement, including factors such as direction, personal performance of services, remuneration, working organization and the level of independence of the service provider.
This analysis is especially important before using U.S.-style independent contractor agreements for professionals working primarily from Brazil.
Brazilian data protection rules may apply to international companies
Companies collecting or processing personal data connected to Brazil should also evaluate the Brazilian General Data Protection Law — LGPD.
The LGPD regulates the processing of personal data and establishes principles and legal bases that may affect business operations involving employees, customers, users, suppliers and other individuals.
For international companies, relevant issues may include:
- customer databases;
- employee information;
- SaaS platforms;
- CRM systems;
- international data transfers;
- marketing databases;
- privacy policies;
- processing agreements;
- security incidents;
- relationships between controllers and processors.
The applicable obligations depend on the data flows and the company’s actual activities.
A Brazilian customer has stopped paying: what happens next?
Commercial disputes are another common reason U.S. companies require Brazilian legal assistance.
A Brazilian customer may fail to pay invoices, dispute delivered products, stop responding, breach a distribution arrangement or refuse to comply with contractual obligations.
Before litigation, Brazilian counsel can review the available evidence, including:
- signed contracts;
- purchase orders;
- invoices;
- delivery documents;
- emails;
- WhatsApp communications;
- acknowledgements of debt;
- guarantees;
- payment history;
- corporate information concerning the debtor.
The appropriate strategy may involve a formal notice, direct negotiation, settlement, restructuring of the debt or judicial collection.
The important point is that the legal strategy should be defined based on the documents actually available and the Brazilian debtor’s situation rather than relying only on the collection procedures used in the United States.
Foreign court judgments do not automatically become enforceable in Brazil
If litigation has already occurred in the United States, another issue arises: enforcement.
A U.S. judgment generally cannot simply be presented to a Brazilian enforcement court as though it were a Brazilian judgment.
Brazilian procedural law provides a specific framework for recognition and enforcement of foreign decisions. The Brazilian Code of Civil Procedure regulates international judicial cooperation and the recognition of foreign judgments.
Consequently, companies involved in cross-border litigation should evaluate Brazilian enforcement issues early, particularly when substantial assets belonging to the counterparty are located in Brazil.
Brazilian legal counsel can work directly with U.S. in-house or outside counsel
Engaging Brazilian counsel does not mean replacing the company’s American lawyers.
Cross-border matters frequently involve cooperation between:
- U.S. in-house counsel;
- American outside counsel;
- Brazilian counsel;
- accountants;
- tax advisers;
- corporate service providers;
- compliance teams;
- local management.
Brazilian counsel can remain responsible for the Brazilian-law component while the U.S. legal team continues managing the global relationship.
Brazilian law reserves legal consultancy, legal advisory services and judicial representation to attorneys admitted to practice law under the Brazilian Bar framework. The Brazilian Bar Act — Law No. 8,906/1994 expressly identifies legal consultancy and advisory activities as activities reserved to lawyers.
International companies that require someone to coordinate Brazilian proceedings or legal activities with their U.S. attorneys can also consider local counsel in Brazil.
Does a U.S. company need a Brazilian subsidiary to hire a Brazilian lawyer?
No Brazilian subsidiary is required merely because an American company needs Brazilian legal advice.
Brazilian lawyers may advise and represent foreign companies concerning Brazilian legal matters even when the company’s shareholders, directors and headquarters remain abroad.
Depending on the matter, however, formal documents may be required to establish the authority of the company and the lawyer or representative acting on its behalf.
These requirements can include corporate documents and powers of attorney, and the necessary formalities depend on what the document will be used for.
This allows many legal matters to be coordinated remotely without company executives travelling to Brazil.
The broader lawyer in Brazil for foreign clients and companies page explains how this type of international representation can be structured.
Project-based counsel or ongoing Brazilian legal support?
Not every company needs a permanent legal arrangement in Brazil.
Project-based counsel may be appropriate when the company has a single issue, such as:
- reviewing one agreement;
- performing due diligence;
- collecting one debt;
- incorporating a subsidiary;
- managing one dispute;
- preparing a power of attorney.
Ongoing counsel becomes more relevant when Brazilian issues occur regularly.
A company with recurring contracts, customers, suppliers, employees, contractors or corporate obligations may benefit from having Brazilian counsel already familiar with its business model and documentation.
An ongoing arrangement may cover recurring consultations, contract review, corporate documents, legal notices, employment questions, supplier and customer disputes, coordination with accountants and other routine Brazilian legal matters.
More information about this model is available in ongoing legal support in Brazil for foreign companies.
When should Brazilian counsel become involved?
The most useful moment is generally before a legal problem has already become a dispute.
Brazilian legal review may be particularly relevant before:
- signing a material contract;
- making a substantial advance payment;
- appointing a distributor;
- granting exclusivity;
- hiring personnel;
- transferring intellectual property;
- incorporating or investing in a Brazilian company;
- terminating an important commercial relationship;
- restructuring unpaid debt;
- accepting a settlement;
- commencing litigation;
- taking action based on a foreign contract or court judgment.
Early analysis gives the company greater opportunity to structure documentation, preserve evidence and understand the consequences of the proposed transaction before its negotiating position changes.
Brazilian legal advice for U.S. companies
U.S. companies doing business with Brazil may encounter Brazilian legal issues long before they establish a physical office in the country.
Contracts, counterparties, employees, investments, data, payments and disputes can each create different legal consequences.
For that reason, Brazilian legal advice should be based on the company’s actual business model, documents, counterparties and objectives rather than on a generic assumption that a U.S. contract or corporate structure will operate in Brazil in the same way it operates domestically.
Willian Nunes Advogados provides legal advisory services for foreign companies in Brazil involving commercial contracts, corporate matters, due diligence, local representation, disputes and ongoing legal support.
The firm is based in Curitiba, Brazil, and assists companies located abroad in Portuguese and English.
Companies with a specific transaction, contract or Brazilian legal matter may submit the relevant information through the contact page of Willian Nunes Advogados.
Each matter requires an individual assessment of the facts, documents, applicable law and commercial objectives.
Frequently Asked Questions
Can a U.S. company hire a lawyer in Brazil without having a Brazilian company?
Yes. A foreign company may retain Brazilian counsel for matters involving Brazilian law without incorporating a subsidiary solely for that purpose.
Does a contract between a U.S. and Brazilian company have to be governed by Brazilian law?
Not necessarily. International contracts require specific analysis of applicable law, jurisdiction, mandatory Brazilian rules and the place where contractual obligations or enforcement will occur.
Can Brazilian counsel work with a company’s U.S. lawyers?
Yes. Brazilian counsel can handle the Brazilian-law component of a transaction or dispute while coordinating with U.S. in-house or outside counsel.
Should a Brazilian contract be reviewed before it is signed?
For significant transactions, review before signature allows the parties to evaluate governing law, jurisdiction, payment obligations, guarantees, termination, liability and enforcement issues while those provisions can still be negotiated.
Can Brazilian counsel provide ongoing monthly legal support?
Yes. Companies with recurring Brazilian legal matters may structure an ongoing advisory relationship. The exact scope, included work and treatment of litigation or extraordinary projects should be defined in the engagement agreement.
Can Brazilian legal work be handled remotely?
Many corporate, contractual and advisory matters can be coordinated remotely. Specific proceedings or formal acts may require powers of attorney, corporate documents, translations or other formalities.