Lei de Investimentos Estrangeiros (Lei 4,598/1964 e Decreto-Lei 1,418/1975)
The legal framework for foreign investment in Brazil was established by Law No. 4,598 of 1964 and Decree-Law No. 1,418 of 1975, and has been progressively modernized. The current framework, administered by the Central Bank of Brazil (Banco Central do Brasil), governs the registration of foreign capital in Brazil, the remittance of profits and dividends abroad, and the exchange control framework. Foreign investors are generally treated equally with domestic investors, subject to specific restrictions in certain sectors.
Legal area: Commercial law governs business transactions, including trade, commerce, and foreign investment.
Year enacted: 1964
Full text: https://www.planalto.gov.br/ccivil_03/leis/Lei/L4598.htm
Key Provisions
- Art. 1: Definition of foreign capital in Brazil (capital estrangeiro)
- Art. 3: Equal treatment of foreign and domestic investors
- Art. 5-7: Registration requirements with the Central Bank
- Art. 8: Remittance of profits and dividends abroad
- Art. 10: Repatriation of capital (repatriação de capital)
- Art. 12: Sector-specific restrictions on foreign ownership
- Art. 14: Tax treatment of foreign investment
Significance
The foreign investment framework has been essential to Brazil’s integration into the global economy. Brazil has attracted significant foreign direct investment (FDI) under this framework, particularly in the energy, automotive, and financial sectors. The Central Bank’s CBE (Capital Brasileiro Exterior) reporting system provides transparency on foreign capital flows. Recent reforms have simplified the registration and repatriation processes to encourage greater foreign investment.