Legal Forms of Business in Brazil 2026: LTDA, MEI, S.A. Compared

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You freelance, consult or build a product, and you want a Brazilian structure that fits. This guide compares the main legal forms for 2026, how each is taxed, and what you can run from abroad.

Brazil legal forms of business in 2026: the key figures

What changed for 2026

• Dividends are no longer fully tax-free. Under Law 15.270/2025, from 1 January 2026 a company withholds 10% when it pays an individual more than R$50,000 in a month. Per PwC (secondary), the 10% then applies to the whole month's amount.
• Minimum tax for high earners. The same law created the IRPFM, a minimum tax on annual income above R$600,000, reaching 10% above R$1.2 million. Dividends count towards it.
• Higher presumed margins for larger firms. Complementary Law 224/2025 adds 10% to the presumed-profit percentages on revenue above R$5 million a year (PwC, secondary).
• New Simples election window. The Simples Nacional Q&A sets the option for 2027 between 1 and 30 September 2026, with effect from 1 January 2027.

Is this guide for you?

Read on if you…

• live in Brazil, or are moving there, and invoice clients through your own business;
• are a foreign founder who wants a Brazilian operating company or subsidiary;
• want to compare MEI, Simples Nacional and a full company before you register.

Probably not your case if you…

• will not become a Brazilian tax resident and keep your business elsewhere;
• are an employee with no side business.

Which legal forms exist in Brazil?

Brazil separates two choices. First, the legal form: who owns the business and who is liable. Second, the tax regime: how profit is taxed. You pick both when you register.

The main legal forms

• MEI (Microempreendedor Individual). A simplified registration for very small sole traders. Revenue up to R$81,000 a year, at most one employee, and only occupations listed in Annex XI of CGSN Resolution 140/2018. The MEI Q&A also bars you from being partner or administrator of another company.
• Empresário Individual (EI). A sole trader without a separate company. Your personal assets answer for business debts.
• LTDA (Sociedade Limitada). The limited company. Since the DREI registration manual allows "one or more persons", a single founder can use it. The one-owner version is often called SLU.
• S.A. (Sociedade Anônima). A corporation with shares. It suits investors, stock options and larger rounds, and costs more to run.
• Branch of a foreign company. Possible, but it needs federal authorisation under DREI Normative Instruction 77/2020. Most groups form an LTDA instead.

What about the EIRELI? It is gone. Law 14.195/2021, art. 41 turned every existing EIRELI into a single-member LTDA automatically.

The comparison matrix

Setup cost depends mainly on accountant fees and state registry charges, which vary by state. Get two quotes before you choose.

How is each structure taxed?

Simples Nacional

Simples Nacional is a single monthly tax for small companies with gross revenue up to R$4.8 million. It bundles corporate income tax, social contributions and most indirect taxes. Exports have their own additional R$4.8 million limit.

Here's the catch for foreigners. The Simples Q&A lists a company "with a partner domiciled abroad" among those barred from the regime. Live in Brazil and own the company yourself, and you can opt in if you meet the other conditions. Keep a partner abroad, and you cannot.

Lucro Presumido (presumed profit)

Tax is calculated on a deemed margin of revenue, not on real profit. For professional services, the presumed margin is 32% for IRPJ, and the CSLL base is also 32% for most services. The regime is open to companies with revenue up to R$78 million (PwC, secondary).

Lucro Real (actual profit)

The company pays IRPJ at 15% of profit, plus a 10% surtax on profit above R$20,000 a month. CSLL adds 9%. Together that is 34% at the margin. The full detail is in our guide to corporate income taxes in Brazil, and what the company can deduct is in business expenses in Brazil.

Getting money out

• Dividends. Exempt up to R$50,000 a month per company and per individual. Above that, 10% is withheld on the whole month's amount, not only the excess. Dividends to non-residents generally bear 10% regardless of amount (PwC, secondary).
• Salary (pró-labore). Taxed on the progressive table, up to 27.5% above R$55,976.16 of annual base in 2026, plus social security.
• High earners. The IRPFM minimum tax looks at your total annual income above R$600,000, dividends included.

Can you run a Brazilian company from abroad?

Yes, as owner and even as administrator. The DREI manual says the administrator of an LTDA "may reside abroad". You need:

1. a CPF if you are an individual partner, or a CNPJ for a foreign corporate partner;
2. a power of attorney to a representative in Brazil, filed with the registry;
3. for an administrator abroad, a Brazil-resident representative able to receive legal summons until at least three years after the mandate ends;
4. your accountant's help with the Central Bank's foreign-investment reporting.

The same three-year representative rule applies to S.A. directors under Law 6.404/1976, art. 146, as amended in 2021.

The management-and-control and PE warning

The risk usually runs the other way. You live in Brazil and run a foreign company from your laptop. Brazil can then argue the company has a taxable presence here, the local equivalent of a permanent establishment (PE). Profits linked to it can be taxed in Brazil at up to 34%.

There is a second layer for individuals. Under art. 5 of Law 14.754/2023, residents who control certain foreign entities are taxed yearly at 15% on their profits. Control means holding more than 50%, among other tests. Nomads with a foreign LLC or offshore company should check both points; see our guide to tax incentives for expats and digital nomads in Brazil.

How do you register a company in Brazil?

1. Get your tax numbers. A CPF for each individual partner, a CNPJ for corporate partners.
2. Pick the activity codes. Your CNAE codes decide your tax options and licences.
3. Draft the articles. Your accountant or lawyer prepares the contrato social, setting capital and how it is paid in.
4. Sign. A partner abroad can sign electronically, or appoint an attorney with specific powers.
5. Register with the state commercial registry. Filing runs through REDESIM, the national one-stop system, and the company gets its CNPJ.
6. Register with the city. Service companies need a municipal registration for ISS, the local services tax.
7. Elect the tax regime. For Simples Nacional, respect the election window.
8. Open a bank account and report foreign capital. Foreign partners also report the investment to the Central Bank.

For a guided route, see Heavnn business setup.

Common mistakes (and what they cost)

• Registering as MEI for an unlisted activity. Only Annex XI occupations qualify. Reclassification brings the missing taxes plus interest and penalties.
• Keeping a partner abroad and planning on Simples. The company is barred, so you face presumed or actual profit and a higher bill.
• Paying dividends in one lump. One payment above R$50,000 in a month triggers 10% withholding; spread over months, it may not.
• Running a foreign company from Brazil. A taxable presence or the Law 14.754/2023 rules can tax its profits in Brazil, plus interest and penalties.
• Forgetting the representative for a non-resident administrator. The registry can refuse the filing, and weeks are lost.

Frequently asked questions

What is the best business structure in Brazil for a foreigner?

For most founders, a limited company (LTDA), with one partner or several. It gives limited liability, no legal minimum capital and access to every tax regime. Simples Nacional is open only if no partner is domiciled abroad. An S.A. makes sense for outside investors or stock options. MEI suits only very small listed occupations.

Can a non-resident own a company in Brazil?

Yes. A non-resident individual or foreign company can be a partner in an LTDA or a shareholder in an S.A. Individuals need a CPF, companies a CNPJ, and a power of attorney to a representative in Brazil. The administrator may even live abroad, if a Brazil-resident representative can receive summons.

Is there a minimum capital to open a company in Brazil?

Not for an LTDA. The DREI registration manual sets no minimum amount; capital is stated in reais and can be paid in immediately or later. You cannot pay it in with services or future profits. Some regulated sectors, such as banking or insurance, have their own capital rules.

How much tax does a Brazilian company pay in 2026?

Under actual profit, IRPJ is 15% plus a 10% surtax above R$20,000 of monthly profit, and CSLL is 9%, so 34% at the margin. Presumed profit taxes a deemed margin, 32% of revenue for most services. Simples Nacional bundles taxes for revenue up to R$4.8 million.

Can a foreigner open a MEI in Brazil?

The MEI rules focus on the business, not nationality: revenue up to R$81,000 a year, at most one employee, a listed occupation, and no stake in another company. Check your residence status and CPF with an accountant first. Many tech and consulting activities are not on the list, so check before registering.

Are dividends taxed in Brazil in 2026?

Yes, above a threshold. From 1 January 2026, a company withholds 10% on the whole month's payout when it pays one resident individual more than R$50,000 in that month. Dividends to non-residents generally bear 10% regardless of amount. Dividends also count towards the new minimum tax on annual income above R$600,000.

Related guides

• Corporate income taxes in Brazil – Simples, presumed and actual profit in detail
• Business expenses in Brazil – what your company can deduct
• Tax incentives for expats and digital nomads in Brazil – structures and traps for newcomers
• Tax residency in Brazil – when you become resident
• Tax landscape overview of Brazil – every Brazilian tax in one page
• Legal forms of business in Paraguay – the lighter-tax neighbour
• Legal forms of business in Mexico – the other big Latin American base
• All country tax guides

Sources

• Manual de Registro de Sociedade Limitada (IN DREI 81/2020, Annex IV) – DREI
• Perguntas e Respostas Simples Nacional – Receita Federal
• Perguntas e Respostas MEI – Receita Federal
• IRPJ – Receita Federal
• CSLL – Receita Federal
• Law 14.195/2021 – original text – Câmara dos Deputados
• Brazil – Corporate income determination – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.