Cross-border payments play a critical role for global companies seeking expansion today. After all, in a world of constant transformation and economic interconnection, it is necessary to keep up with or even anticipate innovations. In this regard, Brazil has attracted numerous international investors, especially for being an emerging, dynamic market with considerable opportunities. However, to fully explore its potential, it's imperative to pay attention to the country's regulatory issues. Even experienced professionals might be unaware of certain fiscal rules and laws governing payments in Brazil.
To better grasp the level of complexity, imagine navigating a dense and vibrant jungle, filled with colour and life. Well, Brazil's regulatory scenario is just such a vibrant landscape of great diversity. There are fiscal and tax regulations that vary depending on the type of transaction, its value, the nature of goods or services, and other factors. A single misstep can lead to legal complications and unforeseen costs.
That's why it's important to rely on specialised knowledge and guidance from partners who understand the intricacies of the Brazilian market. Revisiting the “regulatory jungle” analogy, it would be like having a reliable compass so as not to wander off the path. So, look not only for someone who understands the specifics of the country but also for a partner who can translate the regulatory rules into concrete strategies to avoid pitfalls and unlock opportunities.
Before starting your journey into payments in Brazil, it is highly recommended to seek official and reliable sources of information. For instance, the Central Bank of Brazil (BCB). This is an autonomous institution whose mission is to guarantee efficiency and security in the use of payment instruments. The BCB is therefore responsible for regulating and supervising clearing and settlement systems, arrangements, and payment institutions.
It is also important to understand the Brazilian Payment System (SPB). It consists of the entities, systems and procedures related to the processing and settlement of fund transfer operations. It also covers transactions involving foreign exchange or financial assets and securities.
Rather than operating financial market infrastructure (FMI) entities, the BPS brings together payment arrangements and institutions. However, there is no defined hierarchy between them - and they are all under the supervision of the Central Bank. In addition, they are regulated by the Securities and Exchange Commission (SEC) by the rules of the National Monetary Council (CMN).
There are several laws and regulations related to international payments in Brazil. Among them, we can highlight some that focus specifically on regulating foreign exchange and foreign trade transactions. Here are some examples:
It addresses the foreign exchange market and the transfer of funds abroad. It establishes the general rules for foreign exchange transactions in Brazil.
Establishes the rules for the movement of funds in foreign currency in the country. Such as the purchase and sale of foreign currency, international transfers, and other transactions.
Regulates the procedures for registering foreign capital in Brazil and the declaration of assets and values held abroad.
Introduced the Provisional Contribution on Financial Movements (CPMF), which applied to various financial transactions, including those related to international payments.
Established the rule for withholding income tax on payments for technical services and technical assistance provided by residents abroad.
It rules the movement of funds in foreign currency within the country. Such as the purchase and sale of foreign currency, international transfers, and other transactions.
Regulates international financial transfers and the information to be provided to Brazilian financial institutions involved in cross-border transactions.
The Foreign Exchange Regulation for Foreign Direct Investments (RDE-IED) regulates foreign direct investments in Brazil. It also establishes the procedures for registration with the Central Bank, which includes information about the repatriation of profits and the remittance of capital abroad.
Introduces the tax on credit, exchange and insurance transactions or transactions related to securities (IOF). In addition to international payments, this is a tax applied to various financial operations.
Establishes the rules for taxing capital gains on operations involving the transfer of funds abroad.
Brazil has signed international agreements to avoid double taxation of income. Therefore, depending on the country of destination, this aspect may also affect cross-border payments.
This resolution from the National Monetary Council establishes guidelines for foreign exchange operations, including transfers abroad.
Although not specifically dedicated to payment methods, this law covers the protection and privacy of personal data. As such, it is also very relevant to financial transactions.
In addition to being complex, foreign exchange and tax regulations are subject to constant change. Therefore, it is always best to seek specialised advice on foreign exchange and international transactions. This will make it easier to ensure proper compliance with the laws and regulations applicable to payments in Brazil.
If you're looking for an experienced partner to access the Brazilian market, you can count on Bazk! That's because the company offers security, stability, agility, and connectivity for hassle-free local and international payments. With Safepag, global merchants can access the Brazilian market with maximum security and no worries about the regulatory system.
