Officer of a company in Brazil may be resident abroad
One of the most relevant changes brought about by Law No. 14.195/2021, which aims to reduce bureaucracy in the business environment in the country, was the permission to elect persons resident or domiciled abroad for the position of officer of corporations, who previously had to be resident in Brazil to eligible. However, this possibility is subject to such person appointing an attorney-in-fact resident in Brazil.
The attorney-in-fact must be empowered to receive summons in actions proposed against the non-resident officer, in addition to subpoenas in administrative proceedings brought by the Brazilian Securities Commission (CVM), in the case of holding a management position in a publicly held company. This requirement is necessary so that, in the absence of the administrator’s physical presence in Brazilian territory, third parties can notify him. The term of the power of attorney must be at least 3 years after the end of the tenure of the administrator.
This is a positive adjustment of a rule that required the physical presence of the officer in the country, allowing, for example, foreign investors to appoint people they trust to manage Brazilian companies in which they are partners without having to move them to the country and go through the process of obtaining a permanent work visa, which in most cases is costly and bureaucratic.
Although the new law does not directly address the same situation in limited liability companies, we believe that the innovation is valid for this type of company, as there is provision in their bylaws for the subsidiary application of the Corporation Law.
The initiative aims to facilitate the entry of more foreign capital into the country, by making the management of companies in the country more flexible, without giving up the officer’s physical representation within the territory.