Dispelling Five Myths Surrounding the Brazil Business Investor Permanent Visa

The Five Most Commonly Encountered Myths Associated with the Brazil Business Investor Permanent Visa

The Brazil Business Investor Permanent Visa is one of the best and most available permanent visas for those who have the money to invest, right now R$150,000. This is also a great visa for those who don’t actually need to open a serious business, but rather need a vehicle to get permission to live here. As an example, I came here mostly to avoid work for several years, to relax, and to recover from having worked too much. I wanted to buy a house and I wanted to get my money out of the U.S. banking system. This was in 2003.

The investment requirement was much higher at the time. What I did was to create a business that invests in real estate (but not a realtor, an investor). My business bought my house. I lived in it and made it my office. I spent money on home improvements. I later sold it for a nice profit. At no time was my business ever audited, at no time did I have employees, and the renewal process was a breeze.

Myth #1: You Have to Have Employees to Get the Visa

Though there is some truth to this, it is technically not true. To understand this, we must first understand a very important distinction.

The Difference Between A Business Plan and an Actual Business

Most people who get Brazil’s Business Investor Permanent Visa do so by creating a new business from scratch, so we’ll focus on this.

In most cases, when you are applying for the investor permanent visa, your business is not yet open and functional. For most people, they only want to open and invest in the business if they get a permanent visa that allows them to live in Brazil all year. This makes sense, right? So, when you are applying for the permanent visa, there is no requirement to already have employees because it is assumed that you haven’t yet opened your business. What is required of you is a short and simple business plan, and this business plan will make mention of the employees you plan to have in the future.

I know this may sound obvious, but it’s a critical distinction to make and one of the great myths associated with this visa. You can be as creative and optimistic as you want in your business plan and your business, once running, is under no obligation whatsoever to execute the business plan in it’s exact form. It’s a plan, right? Things can change. There is almost no chance that your business will even be audited during the three year “probation” period of the first issue of the visa. If it is audited, and you are making a sincere effort to run the business, you don’t have to have even a single employee (yet). You simply explain why you don’t have one yet, that you expect to grow and that you will add one soon.

Granted, it would help if you have at least one employee at some point. One way to keep the cost of this low is to hire a housekeeper or maybe an executive assistant on a minimum wage salary, about R$450 per month plus 31% social security taxes, called INSS. No one will work for you 40 hours per week at this salary, but they don’t have to. They might give you 15-20 hours per week for this and you can have them do useful things for you and as long as they are a registered worker for your business this counts as having an employee for the purpose of maintaining your visa.

Myth #2: You Have to Start Conducting Business Right Away

Why the hurry? Sure, if you need to start making money right away then get started. Many foreigners who get this visa really don’t need the money, it’s just that this is the only visa available to them to get permission to stay year after year. They may have their own money in savings or an online job of some kind. If this is the case, you can wait a year or two after the visa is issued to start your business. It will be open, legally, and maybe you are “working out of your home” in the beginning, but in terms of renting an office space to open a café, or small language school, or Pilates Studio, or whatever it may be, you can take your time and simply say that you are having a difficult time finding the ideal space to lease. In the meantime, the R$150,000 you have sitting in your business bank account is earning you about R$900 per month after taxes in simple bank interest.

Myth #3: You Can Use the Money You Invested for Personal Expenses

No. Definitely not, and this could get you into trouble. You can not take out capital and add back capital freely as you can do with an LLC or Corporation in the U.S. If you take money out it can only be by paying yourself a taxable wage. If it’s low enough you won’t pay income taxes, but 100% of it will be subject to the 31% social security tax, called INSS. If you do this steadily for 15 years you will qualify to receive social security payments when you reach retirement age.

Further, you can’t simply gather receipts from things you spend money on that you can creatively call a “business expense”. And, even if it is a legitimate business expense, you still have to get a receipt in the name of your business, with your business’ tax ID number, and in a form that makes the expense deductible for your business. This means that the issuing party provide their business tax ID number on the receipt, the date, and their signature. Otherwise, you cannot deduct these types of expenses.

Myth #4: The Ministry of Labor will Review my Permanent Visa Application with a Great Deal of Scrutiny

No, not true, or partially true only to one extent, – they demand that the application process be complete and application forms filled out correctly. What I mean is that they care nothing at all about the type of business you plan to create, whether or not it’s “good for Brazil”, etc. Though you may read this on an official site somewhere, it’s not legally true.

Let me give you some background. I flew up to the Ministry of Labor in Brasília and interviewed, at length, the National Director of Immigration and her three person staff who have the responsibility of reviewing and approving these visas. Without exception, they each made it very clear that they are under legal obligation to approve every single business investor permanent visa application that is submitted property. They can make no subjective judgment whatsoever (nor do they care to!).

Think of the trouble and expense you’ve gone through to have reached the point of application for the visa. You’ve already created a business in Brazil, opened a bank account for the business, and wired in at least R$150,000 of your own money. They aren’t going to say, “well, we don’t think Brazil needs another English teacher”. Nor can they legally do this.

It’s very simple. Open and fund the business property, send in a complete, error-free application, and your visa will be approved within 30 days, by law.

Myth #5: I Need an Attorney to Get the Business Investor Permanent Visa

You in no way need an attorney to get this visa. You can use one, certainly. All of them are happy for the business and if you don’t want to do any of this yourself, and you are a keen negotiator and know how much to pay for this service, then go for it. 99% of them will never have done this before, though they will claim that they know it all. To do the entire process for you, from beginning to end, you will receive quotes of R$10,000 to R$20,000. Or, you might get a quote for R$5,000 in the beginning and then find that this was only to take you to a certain point, and not to the end.

Be very careful engaging Brazilian Attorneys in Brazil. The best and most ethical ones, who hopefully came to your through a strong referral, plan to earn about R$250 per hour when they make a bid to help you. Some won’t provide a fixed bid, they’ll charge by the hour and you are in grave danger of sticker shock at the end of the process.

If you choose to pay someone to do it all for you, a reasonable price might be R$5,000 to R$7,000, and expect to pay about R$1500 in other costs. If you do it entirely alone, expect to pay only the R$1500 in other costs. You can employ someone like me, who won’t do the work for you, but will provide you a detailed checklist, will coach you through through the process, occasionally make phone calls for you in Portuguese, for about R$4,000, give or take a bit depending on complexity. And, by the way, I do this process much faster and more efficiently than any attorney. Without exception, the people I’ve helped through this visa all started with attorneys and the process was done completely wrong at great expense and I came in to clean it up.

Bonus Myth #6: I am Required to Have a Brazilian Business Partner

You are not required to have a Brazilian business partner. This type of business does require two owners and an Administrator who is not an owner, but can be one of the owners. The only thing required here is that the Administrator, not either of the owners, be either a Brazilian or a Foreigner with a permanent visa. This is required because until you have your permanent visa, you are not allowed to sign legal documents on behalf of your business.

Be careful who you choose. The administrator is the only person who can manage the business bank account, and you’ve just wired R$150,000 into it! Once you have your permanent visa the first thing you can do is have the articles of incorporation (called “Contrato Social”) amended to make you the Administrator and to remove the original person. Then, make sure to pass this information on to the bank.

In Closing

I hope this helps clarify and dispel some of the more common myths surrounding Brazil’s Business Investor Permanent Visa. Good luck to you!

About the Author

Joe Naab, Author of Brazil for LifeJoe Naab is the author of Brazil for Life, a how-to living guide for those who want to start a new life or have a second home in Brazil. He offers a two-hour private phone consultation for those who want more specialized information to suit their specific needs. He also coaches people through the entire expatriation process and can help those interested to obtain Brazil’s Business Investor Permanent Visa.

About the Creation of Brazil for Life

The Story Behind the Creation of Brazil for Life

I left America in June of 2001 with nothing but a suitcase full of clothes to my name and a one-way ticket to Quito, Ecuador. I had a list of 15-20 countries I wanted to visit, all candidates for my future home. Both before I left the U.S. as well as frequently during the three years I was traveling the world freely in search of a home, I turned to the website, escapeartist.com for articles, tips and information about setting up a new life in another country. Escapeartist.com is by far the best resource I have ever found to support those looking to start a new life overseas.

Giving Back

Brazil is a great place to live, but it’s not an easy place to live by any means. During my first two years I wasted and lost money unnecessarily, either by get ripped off by apartment rental agencies, car rental agencies, realtors, attorneys, etc. Foreigners are targets here. You don’t know who to trust until you adapt to the culture and the less trustworthy people become easy to spot. I wasted a lot of time, too, literally hundreds of hours. I got very frustrated and anxious, too. And so much of it could have been avoidable if I came better prepared.

Also during that time, I was able to extend my tourist visa, then switch to a student visa, and then, after a great deal of challenge, obtain Brazil’s business investor’s permanent visa. I also studied the local real estate market in great depth and made my first investment in an oceanfront home. I also became conversational in Brazilian Portuguese and later, fluent. Things were finally getting easier.

I decided to offer escapeartist.com a book about how to start a new life in Brazil. I wanted to write a book that I wish I had had when I first moved here. To this day nothing like this exists anywhere. I worked on it slowly and gathered information by interviewing accountants, attorneys, federal police personnel, and even the national director of immigration. All of the content comes from direct personal experience.

The book is now available at the start of March, 2012. I also offer a two-hour private consultation by phone or skype. I’m coaching a few people through the process of moving here and I’ve helped several people get their business investor permanent visa.

Consider Me a Resource

Please consider me a resource if you have questions about how to live in Brazil. I’ve developed a great deal of expertise in the subject and I’m happy to be of assistance to others. I couldn’t put everything I know in the book. I tried to cover what’s most important. I’m happy to answer questions by email at info@brazilforlife.com.

Safe Travels!, Joe Naab

Preparing for the Big Leap Overseas

How You Can Prepare Now for Your Eventual Big Leap Overseas

Most often, when an “Expat” shares tales with those who are still living in their home country and in the early processes of considering a move overseas, they are tales about the post-move. We talk about life in the new country, learning a new language, getting visas, buying real estate and so on. However, nothing is more important than making that first big leap. It’s the most risky. It’s the most terrifying.

In this video I share an important tip and speak of my personal experience from eleven years ago, when I was still living in Seattle and in the early stages of planning a move overseas.

Lighten Your Load

The main message in this video is to suggest that you begin today to lighten your load. Get rid of all excess property—TV’s, clothing, books, etc.—all that extra junk stacked up all over the place and tucked away in your Shurgard storage locker.

After that, consider selling your home if you own one. Get that money into a liquid form to fund your new adventure. Homes in the U.S. aren’t going to go up in value for a long, long time. They are much more likely to continue to fall in value. Rent a small place to force yourself to liquidate more of your stuff and to gain practice in a low-cost lifestyle. This will come in handy overseas. Life is actually more fun when you have less “stuff”.

In Closing

By lightening your load you are poised to make the big leap when the time and courage arrive. Even if, in the end, you decide to stay in your host country, your cost of living will be lower and you will be better prepared to make a move within your own country, to another big city or to a smaller city. When you’ve gotten the “big liquidation” out of the way, that’s one less giant project, one less major obstacle, to surmount to take the next big step in living your dream life overseas.