Tatiana Andrade
Partner at Kreston KBW Auditores
Managing the ‘Brazil Cost’ when investing
February 19, 2026
The Brazil Cost when investing in Brazil is a decisive factor for foreign companies entering Latin America’s largest economy. Despite this, Brazil remains one of the most attractive markets for foreign investment in Latin America, both due to the size of its domestic market and its relevance in the global commodities trade.
Brazil tax environment
However, investing in, opening, or expanding a business in Brazil can be complicated. Brazil’s regulatory and tax environment is one of the most complex in the world, and the cost of ignoring its particularities can be high — both for companies and for individual investors.
The first step is to understand the legal requirements involved in establishing a company with foreign capital. Every international investor must first appoint a legal representative residing in Brazil, who will be responsible for responding to the company’s administrative and legal matters. In addition, it is necessary to appoint an administrator to lead managerial activities and fulfil the company’s corporate and tax obligations.
Registering an address for tax purposes also needs to be thought about carefully – depending on the municipality and state where the company is established, the tax burden may vary significantly.
Brazilian tax reform
With the recent approval of the Tax Reform, the Brazilian fiscal landscape is undergoing a significant transition. The current model, which fragments taxation across different levels and regimes, will gradually be replaced by a dual VAT system.
During this period, old and new rules will coexist, increasing the need for specialised monitoring. Foreign companies entering Brazil during the transition will have to deal with a hybrid and changing system.
In addition to direct tax obligations, it is also essential to understand the set of ancillary obligations required in the country — reports, declarations, accounting and labour records, all with specific deadlines and formats.
Strategic planning to reduce Brazil Cost
It is easy to see why the “Brazil Cost” remains a major factor in investment decisions. In 2023, the Brazil Cost reached R$ 1.7 trillion, equivalent to 20% of the Brazilian GDP. Investing in Brazil requires more than capital — it requires strategy.
Contact our tax firms in Brazil to get more advice and start your strategy today.
