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Foreign Capital: understand the pros and cons for your business

It is common for issues involving the entry of foreign capital into our country, cause doubts and divide opinions in the field of the economy. It was with this in mind that we prepared this article clarifying the pros and cons of this type of capital for your business. Keep reading!

What is Foreign Capital?

According to the legal definition, foreign capital is all types of investment that comes from outside the country, whether products, machinery and equipment intended for the production of goods and services or financial resources.

In any case, the capital belongs to individuals and legal entities resident, domiciled or with its company’s office, in the case of companies. It is also important to know that all entry of foreign resources must be registered with the Central Bank.

Foreign Capital in Brazil

Nowadays, it is increasingly common for individuals and legal entities resident, domiciled or with companies that have their office abroad, invest in financial assets in Brazil.

As an emerging country, Brazil relies heavily on this type of financing, since our country’s interest rates are very high and those abroad are considerably low. That is why foreign capital often ends up being the best financing option for companies, organizations and projects.

Advantages and Disadvantages

The advantages of foreign capital in Brazil are very intuitive: more investments provide more generation of jobs for the population, which generates more income and consequently, more development for the country.

If well developed, this is a cycle that can fuel the success of the economy, causing the country to further reduce the distance from first world countries.

With regard to disadvantages, the main point is that no longer jobs are created and the economy is moved, much of the production benefit would be sent out of Brazil, thus creating unfair competition in relation to Brazilian companies.

How does Foreign Capital work in Brazil?

Did you know that the natural person holding the capital does not need to be foreign? If a Brazilian is resident in the United States and invests his money in Brazil, these resources are also considered as foreign capital.

In addition to this, there are two other ways to invest in Brazil. They are:

Machinery and Equipment

Products, machinery and equipment intended for the production of goods and services are not subject to certain taxes at the time they enter the country, such as other import items. This is because they are destined for productive activities, which will collaborate with the development of the country.

Financial Resources

When the entry of foreign capital is about financial and monetary resources, the primary condition is that they are destined for application in economic activities, such as for the constitution of companies or investment in the financial market, such as the purchase of securities on the Stock Exchange.

If you do not have enough technical skills and find it difficult to enter the capital of your foreign company in Brazil, we are specialists in the “nationalization” of foreign companies and individuals who wish to participate in the capital of Brazilian companies.

Conmax manages your company’s accounting, whatever the size, safely and reliably!

Based in Fortaleza and São Paulo, but working directly in several states of the country, we are sure to be adding value to new customers, helping them through corporate accounting to further develop their business. We have a team composed of more than 25 professionals of higher education, continuously trained and post-graduated in various areas of activity, certified then by GPTW BRASIL at the level of excellence, which, together with the knowledge acquired over 35 years of existence, makes Conmax a qualified company to provide support and consulting to foreign capital.

If you are having difficulties in accounting your company, do not waste time and talk now with our service. Be more of a company positively impacted by our service.

Talk to one of our attendants directly through Whatsapp

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