Until a recent past most of foreign investors that made direct capital investments in Brazil were automatically protected against exchange losses, as the Brazilian Central Bank used to issue a foreign capital certificate guaranteeing that the amounts of the original US dollars invested could be repatriated tax free as long as there was no deterioration of the company’s net worth.
This is no longer so.
Due to many changes that have occurred in the tax and exchange control regulations such a guarantee no longer exists.
This is so for the following reasons:
As of Setember 4, 2000 the Brazilian Central Bank has changed the way foreign investors register their investments in Brazil.
From now on there will be no need to request central bank approvals for the foreign investment made in Brazil. At the same time no more foreign capital certificates will be issued.
