Brazil is a major market with a sophisticated legal system — and a few procedural habits that surprise foreign parties. If you are about to sign a contract with a Brazilian company, these eight points deserve attention before the signature page.
1. Governing law and jurisdiction
Brazilian courts will generally respect a foreign governing-law clause in international commercial contracts, but enforcement of foreign court judgments requires recognition by the Superior Court of Justice (STJ) — a slow process. In practice, arbitration is usually the safer route for cross-border deals (see point 7).
2. Language versions
Contracts may be executed in English, but if the document ever needs to be enforced or filed in Brazil it will require a sworn translation. Bilingual versions are common; always state which language prevails in case of conflict.
3. Who has power to sign
Brazilian companies are bound according to their articles of association (contrato social) or bylaws. Check who may sign, whether two officers are required, and whether powers of attorney are valid and current. A contract signed by the wrong person may be challenged later.
4. Signature formalities
A Brazilian habit that surprises foreigners: contracts traditionally carry two witnesses’ signatures — this turns the agreement into an extrajudicial enforcement instrument (título executivo), allowing faster court enforcement. Qualified electronic signatures (ICP-Brasil) and common platforms are widely accepted, but the format should be agreed in advance.
5. Currency and payment
Payments between a Brazilian party and a foreign party involve foreign-exchange rules: obligations inside Brazil are, as a rule, payable in Brazilian reais, and cross-border remittances flow through regulated FX transactions. Define the currency, who bears FX variation and the tax gross-up.
6. Taxes on cross-border payments
Remittances abroad for services, royalties or licenses may trigger Brazilian withholding tax and other charges (IRRF, CIDE, PIS/COFINS-import, ISS), which can add a significant cost. Model the tax burden before pricing the deal and state clearly which party bears each tax.
7. Dispute resolution
Brazil is an arbitration-friendly jurisdiction and a party to the New York Convention: foreign arbitral awards are enforceable through a well-tested procedure. For international contracts, an arbitration clause naming a reputable institution, seat and language is usually the most efficient design — often combined with prior mediation.
8. Mandatory local rules
Some Brazilian rules apply regardless of the chosen law: consumer protection, labor law (beware of contractor arrangements that resemble employment), competition law and data protection (LGPD, Brazil’s GDPR-like statute). A local review before signing prevents expensive surprises.
This article is for information only and is not legal advice. To discuss a specific transaction with a Brazilian counterparty, book a consultation — we work in English.