The Central Bank of Brazil (“BACEN”) published on June 16, 2016 the Circular No. 3,795 (“Circular”), to consolidate the regulations regarding the statement of the Census of Foreign Capital, created by the Federal Law No. 4,131/1962. In the sole paragraph of Article 1, the Circular confirms the existence of two different types of Census of Foreign Capital, (i) the Quinquennial Census relating to years ending in 0 (zero) or five (5); and the Annual Census, which refers to the remaining years.
The statement of the Quinquennial Census shall be filed by (i) legal entities established in Brazil that, in the reference date, had direct participation of non-residents in their equity, regardless of the amount; (ii) investment funds with non-residents quotaholders in the reference date; and (iii) Brazilian legal entities with debts of short-term commercial credits (i.e., due within 360 days) to non-residents, in the amount equal to or higher than one million dollars (USD 1,000,000.00) in the reference date.
The statement of the Annual Census shall be filed by (i) legal entities established in Brazil that, in the reference date, had direct participation of non-residents in their equity, regardless of the amount and equity equal to or higher than the equivalent of one hundred million dollars (USD 100,000,000.00); (ii) investment funds with non-residents quotaholders and equity equal to or higher than the equivalent of one hundred million dollars (USD 100,000,000.00) in the reference date; and (iii) legal entities established in Brazil carrying debts towards non-residents, in the amount equal to or higher than ten million dollars (USD 10,000,000.00) in the reference date.
The Circular sets forth the exemption for submission of the statements of both censuses for (i) individuals; (ii) direct public administration organs of the Union, States, Federal District and Municipalities; (iii) indebted legal entities of foreign credit transfers granted by financial institutions established in Brazil, and (iv) nonprofits entities maintained by non-residents contributions.
The statement of the Census of Foreign Capital shall be submitted from July 1st until August 15th of the following year of the base date to BACEN.
Thus, the statement of Quinquennial Census to BACEN concerning the reference date of December 31, 2015 must be submitted between July 1, 2016 and August 15, 2016, according to the calendar fixed by the Circular. The Annual Census must be submitted in 2017 concerning the base date December 31, 2016.
The Census of Foreign Capital in Brazil major goal is to measure the amount of Direct Investments Liabilities (DIL) in the country on December 31 of each base year, i.e., the fiscal year before the survey’s reference year. Furthermore, the results obtained through the Census allow the calculation of the International Investment Position (IIP) which describes the key statistics concerning the foreign sector of Brazil’s economy; and, finally, data collected through Census allow the country to participate in the Coordinated Direct Investment Survey (CDIS), which is carried out annually by the International Monetary Fund (IMF) aiming at measuring global DIL stocks and their distribution by investors and recipient countries.
Untimely submission as well as incorrect, false or incomplete information shall be subject to fines according to the Resolution No. 4.104 published on June 28, 2012 by the National Monetary Council (Conselho Monetário Nacional).
The lawyers of Bastilho Coelho Advogados are available for more information.