Capital Increase of a Brazilian Subsidiary from Abroad: Full Guide

Reviewed by Luiz Eduardo da Silva, director of LegalBR. Updated on 22 October 2026. About 9 minutes to read.

A capital increase in Brazil funded by a foreign parent touches three systems at once: the foreign exchange market, the Central Bank’s foreign investment register (SCE-IED) and the state Board of Trade. Get the order wrong and the money arrives but cannot be capitalized cleanly, or the corporate act is registered with data that the Central Bank does not recognize. This guide maps the order of operations after Resolution BCB 410/2024, with documents, deadlines and the mistakes that cause rework.

Order of operations for a capital increase in Brazil

Treasury teams often want to send the money first and paper it later. That works, but only if the FX contract is classified correctly and the corporate act follows quickly. The cleaner route for a cash increase in a subsidiary owned by a foreign parent is the following.

1. Approve internally

   The parent approves the amount, the number of new quotas or shares and the funding route, in line with its own governance.

2. Check the registrations

   Confirm the parent’s CNPJ is active, its Brazilian representative’s powers are current and the investor-investee pair already has an SCE-IED code.

3. Agree the FX classification

   Tell the Brazilian bank that the inflow is foreign direct investment, with the investee’s CNPJ and the investor’s details, before the funds leave.

4. Sign and file the corporate act

   Sign the amendment or minutes and file it at the Board of Trade within 30 days of signature.

5. Close the records

   Update the CNPJ capital, the books, the e-BEF if percentages changed, and diarize any Central Bank reporting.

Corporate approval for Ltdas and S.A.s

Limited company (Ltda)

Under the Civil Code, the capital of an Ltda may be increased only after the existing quotas are fully paid in (art. 1,081). The existing quotaholders then have a preference to subscribe the new quotas in proportion to their holdings for 30 days after the decision, and they may assign that right. After the window, the quotaholders approve the amendment to the articles.

Since Law 14,451/2022, amendments to the articles of an Ltda need the votes of quotaholders holding more than half of the capital, instead of three quarters. In a subsidiary held 99% by the parent and 1% by an affiliate, the practical points are simpler: have the minority quotaholder expressly waive its preference in the same document, so the 30-day window does not delay the filing, and sign a consolidated version of the articles.

Corporation (S.A.)

For an S.A., the increase follows Law 6,404/1976: approval by the general meeting or, within authorized capital, by the board, with the issue price fixed under the statutory criteria and shareholders’ pre-emptive rights. The new shares are then recorded in the share register book. Since Law 13,874/2019, only the incorporation of an S.A. (plus transformations, mergers and spin-offs) needs a collegiate decision at the Board of Trade, so an S.A. capital increase follows the 2-business-day rule for other acts.

Contributions in kind

If the parent contributes assets instead of cash, the valuation matters. In an Ltda, all quotaholders are jointly liable for the accurate valuation of assets contributed to capital for five years from registration (Civil Code, art. 1,055, §1). Therefore, support the value with an appraisal even when the law does not require one.

Funding routes and how each is reported

Each route has a different trigger for the Central Bank and different documents. The table compares the four that groups use most.

The Central Bank reporting duty applies to transfers and movements of US$ 100,000 or more, or the equivalent (Resolution BCB 278/2022, art. 32). If you are converting a loan, read our SCE-IED guide first, because the exit from the credit module and the entry into the investment module must match.

The FX contract and IOF

Since the new FX law (Law 14,286/2021) took effect at the end of 2022, the FX contract and the bank’s classification of the operation carry most of the information the Central Bank needs. As a result, the bank’s paperwork is where many capital increases go wrong. Give the bank, before the inflow:

• the subsidiary’s CNPJ and the investor’s CNPJ;
• the nature of the operation: foreign direct investment, capital contribution;
• the board or quotaholder approval, or a draft of the act;
• the investor’s name exactly as registered in Brazil.

On the tax side, FX settlements are subject to the tax on financial operations (IOF). Inflows that are not covered by a specific item of Decree 6,306/2007 bear 0.38%, a rate unchanged by the 2025 IOF decrees. Your FX bank confirms the applicable item and withholds the tax. By contrast, the return of a foreign direct investment from Brazilian companies became zero-rated under Decree 12,499/2025, which helps if the capital is later reduced and repaid.

SCE-IED after Resolution BCB 410/2024

Resolution BCB 278/2022 governs foreign capital registration, and Resolution BCB 410/2024, in force since 1 October 2024, simplified it. For capital increases, the current position is as follows.

• The investee reports. The Brazilian company is responsible for SCE-IED information.
• Code first. The investor-investee code must exist before the first financial transfer, movement or periodic declaration (art. 34).
• Cash through FX is automatic. Inflows contracted as foreign direct investment flow from the FX system into SCE-IED (art. 35).
• Everything else within 30 days. Capitalization with tangible, intangible or virtual assets, conversions, and capitalization of profits, dividends or interest on equity, when not made through FX, must be reported within 30 days (art. 36).
• No per-investor update within 30 days. Resolution 410 removed the duty to update each investor’s capital within 30 days of a change in shareholding. The update now happens with the periodic declarations.

Periodic declarations remain. The five-yearly declaration for the 2025 reference date was due by 31 March 2026. In 2027, companies with total assets of R$ 100 million or more file the annual declaration for 2026, and those with R$ 300 million or more also file quarterly declarations during the year. Many published guides predate this change, so check any older checklist against the current rules.

Board of Trade filing and registry updates

The filing package at the Board of Trade usually includes:

• the amendment to the articles (Ltda) or the minutes (S.A.), with the new capital and the new distribution of quotas or shares;
• the waiver of preference by any quotaholder who does not subscribe;
• proof of authority of the parent’s signatory, apostilled and translated unless the document is bilingual;
• the power of attorney of the parent’s Brazilian representative, if the representative signs;
• the appraisal report, for contributions in kind.

File within 30 days of signature so that effects run from the signature date (Law 8,934/1994, art. 36). Since IN DREI 01/2024, the parent may sign electronically with an advanced or qualified signature that the Board can validate. Our guide to Junta Comercial requirements lists common objections.

After registration

• CNPJ: update the registered capital through the integrated REDESIM process.
• Books: record the act in the minute book; for S.A.s, record the new shares in the share register. See our guide on corporate books.
• e-BEF: if the increase is not pro rata and changes who holds more than 25%, file within 30 days, as explained in our e-BEF guide.
• Accounting: the accountant reconciles the capital account with the FX contracts and the registered act.

Timeline

The ranges below reflect general market practice for a wholly owned Ltda with an active SCE-IED code and documents in order.

Common mistakes in a capital increase in Brazil

• Unpaid capital: trying to increase the capital of an Ltda whose existing quotas are not fully paid in.
• Wrong FX nature: the bank books the inflow as a loan or a generic transfer, so it never reaches SCE-IED as investment.
• No SCE-IED code: the first transfer happens before the investor-investee code exists.
• Name mismatch: the parent’s name in the FX contract differs from its CNPJ record.
• Forgotten waiver: the minority quotaholder does not waive preference, and the Board raises an objection.
• Late filing: the act is filed after 30 days and takes effect only from registration.
• Silent conversions: loans or profits are capitalized without the 30-day Central Bank report.
• Amount mismatch: the capital in the act does not reconcile with the reais actually received after IOF and FX rate.

Questions investors ask