How tax rates, corporate structure, and immigration status directly impact what your company pays in Brazil
In Brazil, tax regime choice is not a detail it is a financial strategy.
Every January, Brazilian companies have a single opportunity to choose the Simples Nacional tax regime. This decision determines how much tax the company will pay for the entire year, how complex compliance will be, and how predictable cash flow can be.
For companies with foreign shareholders, this choice becomes even more critical. A small structural issue such as an outdated corporate document or an incorrect immigration classification can automatically block access to Simples Nacional and push the company into a significantly heavier tax burden.
The January 31 deadline: why timing matters
The deadline to opt for Simples Nacional is January 31st of each year.
This deadline is strict and final.
If the option is not requested by this date, the company:
- cannot enter Simples later in the year,
- even if it fully qualifies,
- and will remain in another tax regime until December 31st.
In other words:
one missed deadline can mean paying more tax for 12 months straight.
Why Simples Nacional is financially attractive
Simples Nacional was created to simplify taxation and reduce the tax burden for small and medium-sized companies. Its main appeal lies in lower starting tax rates and unified tax collection.
How Simples tax rates work
Under Simples Nacional, taxes are charged based on:
- the company’s activity (classified under “Annexes”),
- and its gross annual revenue.
As a reference:
- Commercial activities (Annex I)
👉 Starting tax rate: 4%
- Service activities (Annex III)
👉 Starting tax rate: 6%
These percentages already include multiple federal, state, and municipal taxes combined into one single monthly payment.
As revenue increases, rates gradually rise according to predefined brackets which means predictability and planning.
How this compares to Presumed Profit (Lucro Presumido)
When a company cannot opt for Simples Nacional, it is commonly taxed under the Presumed Profit regime.
In this system:
- Corporate Income Tax (IRPJ) starts at 15% over the presumed profit base,
- plus Social Contribution on Net Profit (CSLL) at 9%,
- plus PIS and COFINS, usually totaling 3.65% on gross revenue,
- plus ISS (for services) or ICMS (for goods), depending on activity.
While the calculation basis differs, the effective tax burden under Presumed Profit is often significantly higher than Simples, especially for service providers and early-stage companies.
This is why Simples Nacional is not just “simpler” it is frequently cheaper, when legally available.
Can companies with foreign shareholders opt for Simples Nacional?
The answer is not automatic. It depends on structure, not nationality.
1. Immigration status of the foreign shareholder
- Foreign shareholder without Brazilian residency
❌ This blocks the option for Simples Nacional.
- Foreign shareholder with Brazilian residency
✅ Simples may be possible but only if corporate records are fully updated.
A common mistake is assuming that once residency is granted, the company is automatically eligible.
In reality, corporate documents must reflect this change, or the tax authorities may treat the shareholder as non-resident.
2. Corporate structure requirements
To qualify for Simples Nacional, the company must:
- have only individuals as shareholders (no legal entities),
- have no shareholder legally domiciled abroad,
- maintain a compliant and updated Articles of Association.
Many companies fail here not because they are ineligible but because their documents no longer match reality.
3. Tax and registration compliance
Before opting for Simples, the company must:
- have no outstanding tax debts,
- have an active and regular CNPJ,
- operate under activities allowed in Simples Nacional.
Any pending issue can automatically prevent approval.
Why companies with foreign partners lose Simples without realizing it
The most common problems we see in practice are:
- foreign partners obtaining residency but not updating corporate records;
- founders assuming Simples is an “accounting choice,” not a legal one;
- companies discovering in February that they missed the January window;
- paying higher taxes all year for a problem that could have been fixed with proper planning and taking actions in January.
January tax planning is not optional it is strategic
Choosing Simples Nacional is not a checkbox exercise.
For companies with foreign shareholders, it requires alignment between:
- immigration status,
- corporate governance,
- and tax strategy.
Once January 31st passes, there is no second chance that year.
Why work with Migravisa for your tax planning in Brazil
Tax planning in Brazil, especially for companies with foreign shareholders, requires more than accounting calculations.
It demands a deep understanding of how tax law, corporate structure, and immigration status intersect.
At Migravisa, tax planning is handled by a multidisciplinary legal team with over 25 years of experience supporting international clients in Brazil.
Our expertise goes beyond numbers: we analyze corporate documents, shareholder status, residency implications, and compliance risks to ensure that tax strategies are legally sound, sustainable, and defensible.
This integrated approach allows our clients to make decisions with clarity and confidence, knowing their structure supports growth, protects them from future issues, and aligns with Brazilian regulations from day one.
Book a tax planning appointment before the deadline
A proper tax planning review before January 31st allows you to:
- confirm whether Simples Nacional is legally available,
- understand the real tax impact of each regime,
- correct structural issues before they become expensive mistakes.
Our team is committed to staying up-to-date with the latest developments in the legal field and offers a range of specialized services to help your move to Brazil .
We have over 25 years of experience providing high-quality immigration services to our International clients.
We use state-of-the-art technology to provide efficient and effective immigration solutions.
We are confident that with our guidance and support, you will be able to successfully establish and grow your business in this dynamic country.
Do not hesitate to reach out to us if you have any questions or concerns along the way, book your appointment today.
