How to Invest in Brazilian Stocks

By John Walton

  • Overview

    The old joke about Brazil is that it is a country that shows, has always shown and will always show great promise. However, in recent years Brazil has shown the kind of sustained and sustainable economic growth that may allow it to break away from its less than stellar past. This has made investing in Brazil an attractive idea. Although difficult, it is possible for foreign nationals to open an investment account in the BM&F Bovespa, the São Paulo-based exchange.
    Bolsa de Valores de São Paulo
    • Step 1

      Get a bank or broker in Brazil to sponsor you. It is required that an investor have a financial institution sponsor him for an investment account with the BM&F Bovespa. You will also require a custodian, or someone who can produce all documents relating to your financial activities for the Brazilian authorities on demand. A bank or brokerage might fulfill that role as well.
    • Step 2

      Consider getting a Brazilian lawyer. Just because a bank or brokerage agrees to sponsor you does not mean that they will file the documents. If they balk, you will need to hire a lawyer to take care of this matter. Also, this person might serve as your custodian if the bank does not fulfill that role.

    • Step 3

      Get a Brazilian accountant. You are required to have someone who will be responsible for all taxes and fiscal matters before the Brazilian authorities.
    • Step 4

      Apply for the investors' operational code. Once you have your agents in Brazil, you can sign and file your application.
    • Step 5

      Submit a funds transfer declaratory form. Whenever you move money into Brazil, you will be required to do this.
    • Step 6

      Pick a brokerage. Assuming your financial sponsor is not already a brokerage, you will now need to pick one to handle your stock orders.
    • Skill: Challenging
    • Tip: International investments into Brazilian equities are exempt from capital gains taxes.
    • Warning:
    • While your broker also serves as your sponsor, it might be a good idea to retain a lawyer to file documents and serve as your custodian. That means paying a little more, but now you have three separate agents in Brazil, each with different responsibilities, serving as checks and balances for your interests.

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