FAQ

Non resident investor is a foreign investor not residing in Brazil or a Brazilian individual who declared definitive exit from the country. Hence, the criterion is the country of residence rather than nationality. This classification is valid for individuals, companies, funds or other collective investment entities.

CMN Resolution 4373/14, which revoked Resolution 2689/00, rules foreign investment in Brazil’s financial and capital markets.

CVM Instruction 560/15 addresses registration, transactions and release of information by non-resident investors in Brazil.

The NRI has access to the same instruments and operational modalities available to domestic investors, respecting the differences in tax treatments applicable to each kind of investor / investment, as well as eventual restrictions set by existing regulations.

Investments carried out under CMN Resolution 4373/14 must be registered with the Central Bank by inputting information in the Central Bank’s Information System (Sisbacen) – Electronic Declaration Registration (RDE) in the Portfolio modality in one of these categories:

- Investment in the financial and capital markets by the non-resident investor of external funds which entered the country, and also from accounts in local currency held by those residing, with addresses or headquarters abroad (Annex I);

- Investment of foreign capital in the country through the Depositary Receipt mechanism (Annex II).

NRIs conforming to the first category must obtain registration from CVM.

Importantly, Annex I in Resolution 4373/14 forbids the execution of transactions outside an exchange or OTC market organized by an entity authorized by CVM, and also forbids transfers of investments held by the NRI, unless under exceptions set by ICVM 560.

When starting operations in Brazil, the Non-Resident Investor must:

I. constitute one or more representatives in the country, by requirement a financial institution authorized by the Central Bank (not necessarily confused with the entity required for tax purposes);

II. obtain registration from CVM through the representative, instructed with information found in the NRI Form (“Investor Form”), which will be effective 1 (one) working day after the information is received;

III. constitute one or more custodians authorized by CVM.

Overall, as custodian and legal representative, Itaú represents the NRI to Brazilian regulators in the terms established by contract, executes the settlement of their transactions in Brazil, as well as custody of their assets.

The non resident investor may hold the following kinds of accounts to bring their investments to Brazil’s financial and capital markets: (i) main holder of Proprietary Account; (ii) holder of Collective Account; and iii) and/or Participant of Collective Account (Passenger on Collective Account).

Importantly, the NRI may be a holder or participant in one or more accounts.

Usually, the following documents are needed:

- Custody Contract;

- Representation Contract;

- Investor Form (model found in annex to ICVM 560/15);

- Proxy Voting Contract (when contracted); and

- Registration Documents, depending on the case.

The Proxy Voting service consists in representing NRI clients — through a properly-sanctioned mandate — in shareholder meetings of companies in which they are shareholders.