Brazilian branches of foreign airline companies’ obligation to comply with the Brazilian Central Bank Foreign Capital Census of 2016
In accordance with the Brazilian Central Bank’s Circular No. 3,795, dated June 16, 2016, the five-year declaration of the Foreign Capitals Census – which is required to be periodically submitted to the Brazilian Central Bank in connection with reference years ending with zero (0) or five (5) – must be submitted this year, in relation to the reference date of December 31, 2015, by August 15, 2016.
The entities which are obliged to submit the Five-Year Census are the following: (i) corporate entities headquartered in Brazil, with direct participation of non-residents in their corporate capital, in any amount, on the respective reference date; (ii) investment funds with non-resident quotaholders on the respective reference date; and (iii) corporate entities headquartered in Brazil, with debtor balance equal to or higher than US$1 million (one million United States dollars) related to short term commercial credits (payable within up to 360 days) granted by non-residents, regardless of foreign equity interest held in its corporate capital, on the respective reference date.
The lack of submission or late submission of the information related to the Census to the Brazilian Central Bank, as well as the submission of false or incomplete information, may subject the above-mentioned corporate entities and investment funds to the monetary penalties contemplated in Resolution No. 4,104/2012 of the Brazilian Monetary Council.
Although the Brazilian Central Bank’s regulation does not expressly refers to Brazilian branches of foreign companies, as it is the case of foreign airline companies doing business in Brazil, the Brazilian Central Bank informed us, in response to our consultation by e-mail, that in accordance with their understanding Brazilian branches of foreign companies are equivalent to a Brazilian subsidiary receiving direct foreign investment, for the purposes of submission of information related to the Five-Year Census. The information includes the Brazilian entity’s foreign capital contribution (in the case of branches, the allocated capital of the Brazilian branch), number of employees, main activities, turnover, information related to financial statements (net worth, assets, liabilities), etc.
Felsberg’s Corporate and Aviation Law Departments are available to assist clients in the submission of the declaration of the Five-Year Census to the Brazilian Central Bank. For more information please contact: Isabel Andrade firstname.lastname@example.org or Vivian Rudge email@example.com.
This article is of a solely informative nature, and does not contain any opinion, recommendation or legal advice from Felsberg Advogados concerning the subject matter covered.