A foreign company may need to take legal action in Brazil when a Brazilian customer, supplier, distributor or business partner fails to comply with a contract.
Common disputes involve unpaid invoices, defective products, failure to deliver goods, misuse of confidential information and breach of commercial agreements.
A foreign company can generally sue a Brazilian company without opening a subsidiary or sending its directors to Brazil. However, it must appoint a Brazilian lawyer and provide documents demonstrating its legal existence and representation.
When can a lawsuit be filed in Brazil?
Brazilian courts may have jurisdiction when:
- the defendant is domiciled in Brazil;
- an obligation must be performed in Brazil;
- the dispute arises from an act or fact occurring in Brazil;
- the parties validly selected Brazilian jurisdiction;
- assets or evidence relevant to the dispute are located in Brazil.
These rules are established by the Brazilian Code of Civil Procedure, particularly its provisions concerning international jurisdiction.
The contract’s governing-law and jurisdiction clauses must also be reviewed before proceedings begin.
What documents are required?
The foreign company should normally provide:
- certificate of incorporation;
- articles or bylaws;
- proof of the current directors or authorized representatives;
- corporate authorization to commence proceedings;
- power of attorney;
- signed contract;
- invoices;
- purchase orders;
- proof of delivery or performance;
- emails and messages;
- evidence of financial losses;
- information about the Brazilian defendant.
The Brazilian court may require evidence that the person who signed the power of attorney had authority to represent the foreign company.
The Superior Court of Justice has confirmed that corporate documents may be required when there is reasonable doubt regarding the authority of the foreign company’s representative.
Documents issued abroad may require an apostille or consular legalization and sworn translation into Portuguese.
Is a formal notice required before suing?
A formal notice is not mandatory in every dispute, but it may be legally or strategically important.
The notice can:
- identify the contractual breach;
- request payment or performance;
- establish a deadline;
- preserve evidence of default;
- propose a settlement;
- demonstrate that litigation was preceded by an attempt to resolve the matter.
When the debtor acknowledges the obligation, the parties may negotiate an acknowledgement-of-debt agreement with instalments, penalties and guarantees.
Foreign creditors may also review the available options through the page concerning credit recovery in Brazil.
Which type of lawsuit should be filed?
The appropriate procedure depends on the documents and the remedy requested.
Possible proceedings include:
- debt-collection action;
- direct enforcement of an enforceable instrument;
- breach-of-contract claim;
- damages claim;
- injunction;
- obligation to deliver goods or perform services;
- termination of contract;
- corporate or shareholder dispute.
A contract or acknowledgement of debt that satisfies the legal requirements may permit direct enforcement.
If the documents do not constitute an enforceable instrument, the creditor may first need a judicial decision confirming the debt.
Can Brazilian courts freeze assets?
When the procedural requirements are met, the creditor may request measures involving:
- bank accounts;
- vehicles;
- real estate;
- receivables;
- ownership interests;
- other assets belonging to the debtor.
Emergency measures may also be requested when there is evidence that delay could jeopardize recovery or cause serious harm.
The court will examine the evidence, urgency and proportionality of the requested measure.
Does the foreign company need to provide security for costs?
Article 83 of the Brazilian Code of Civil Procedure provides that a plaintiff residing outside Brazil may, in certain circumstances, be required to provide security for court costs and legal fees.
The requirement is subject to exceptions, including applicable treaties, specific procedural situations and the existence of sufficient assets in Brazil.
The Superior Court of Justice has held, in a particular case, that a foreign company properly represented and considered domiciled in Brazil was not required to provide the security. The issue must therefore be analysed according to the company’s structure and representation.
Can the lawsuit be managed remotely?
Most commercial lawsuits can be managed without the foreign company’s directors travelling to Brazil.
The company may:
- meet with counsel by videoconference;
- send documents electronically;
- issue a power of attorney;
- receive reports in English;
- approve settlements remotely;
- participate in online hearings when permitted.
Personal attendance may be necessary in specific cases, particularly when testimony or direct participation is ordered.
What if there is already a foreign judgment?
A judgment issued outside Brazil does not normally become automatically enforceable against assets located in Brazil.
As a general rule, the foreign judgment must first be recognized by the Superior Court of Justice.
The STJ explains that recognition is required for a foreign judicial decision to produce effects in Brazil. After recognition, enforcement proceeds before the competent Federal Court.
Before commencing proceedings abroad, the company should evaluate whether filing the original claim directly in Brazil may be more efficient.
How long does a lawsuit take?
The duration depends on:
- complexity of the dispute;
- available evidence;
- court jurisdiction;
- procedural objections;
- expert examinations;
- appeals;
- location of assets;
- financial condition of the defendant.
The existence of a favourable judgment does not guarantee immediate payment. The defendant must have identifiable assets or income available for enforcement.
No outcome or timeframe can be guaranteed before the documents and circumstances are examined.
Legal representation in Brazil
Willian Nunes Advogados assists foreign companies with contractual disputes, debt collection and commercial litigation against Brazilian businesses.
The work may include:
- analysis of contracts and evidence;
- formal legal notices;
- settlement negotiations;
- preparation of powers of attorney;
- filing and monitoring lawsuits;
- requests for asset enforcement;
- written reports in English.
Foreign businesses may obtain additional information through the pages concerning legal representation in Brazil and legal advice for foreign companies.
Documents may be submitted for an initial assessment through the contact page of Willian Nunes Advogados.
Frequently asked questions
Can a foreign company sue in Brazil without a Brazilian subsidiary?
Yes. Opening a Brazilian subsidiary is not generally required merely to initiate a lawsuit.
Is a Brazilian lawyer required?
Yes. Representation before Brazilian courts must be performed by a lawyer authorized to practise in Brazil.
Must all documents be translated?
Documents written in another language generally require sworn translation before formal use in Brazilian proceedings.
Can the parties settle after the lawsuit begins?
Yes. A settlement may be negotiated and submitted to the court during the proceedings.
Can legal fees be based on recovery?
Fees may combine an initial fixed amount, procedural fees and a success-based component, depending on the case and applicable professional rules.
