Best Company Type Brazil: LTDA vs SA vs EIRELI 2026

You found a consultancy online. The quote said “EIRELI formation for foreigners, R$ 8,500, full package, no need to travel to Brazil”. You paid, sent your passport and waited. Six weeks later nobody can explain why the commercial registry has not issued anything. The reason is simple and brutal: the EIRELI does not exist anymore. It was abolished in 2021. You paid for a company type that cannot legally be created in Brazil in 2026.

The second version of the same mistake costs even more. A foreign founder is told to “open an SAS, like in Colombia or France”. Brazil has no SAS. What the adviser ends up registering is a full Sociedade Anônima, with audited books, board minutes and an accounting bill three times higher than needed, for a company billing R$ 30,000 a month.

Here is the rule that solves 95% of cases: if you are a foreigner opening a business in Brazil, the right vehicle is the LTDA (Sociedade Limitada, limited liability company), or its single-owner version, the SLU (Sociedade Limitada Unipessoal). The closely held Sociedade Anônima is the correct answer only in a narrow set of situations, and this article shows you exactly which ones. The EIRELI is not an option at all.

Key point: In 2026 foreigners can register three active structures in Brazil: the LTDA, the SLU (single-owner LTDA) and the Sociedade Anônima. The EIRELI was extinguished by Law 14.195/2021 and the “SAS” is a Latin American and French format that has no Brazilian equivalent.

What Happens If You Still Try to Open an EIRELI in Brazil?

Nothing happens, and that is the problem. The commercial registry will simply not process it. The EIRELI was abolished by Article 41 of Law 14.195/2021, and all existing EIRELIs were converted into SLUs automatically by the state registries, with no action required from owners.

The conversion was ordered nationwide by DREI (Departamento Nacional de Registro Empresarial e Integração, the National Business Registry Department) and applied to all 27 state juntas comerciais (commercial registries). If you owned an EIRELI before 2021, you already own an SLU today, even if your old documents still say EIRELI.

Why did Brazil kill it? Because the EIRELI required paid-in capital of 100 times the minimum wage. At the 2025 minimum wage of R$ 1,518, that meant depositing roughly R$ 151,800 (around US$ 29,800) just to start a one-person business. The SLU, created by the Economic Freedom Law (Law 13.874/2019, which inserted new paragraphs into Article 1.052 of the Brazilian Civil Code), gives the same limited liability with no minimum capital.

Watch out: Any website, despachante (filing agent) or “international business formation” service still selling EIRELI setup in 2026 is reading pre-2021 material. Treat it as a red flag about everything else they tell you. Our guide on Brazilian lawyer scam red flags covers how to verify who you are actually hiring.

Why Do So Many Foreigners Lose the Right Structure Without Knowing It?

Because the costly part of choosing a company type is invisible at registration. Both an LTDA and a Sociedade Anônima get a CNPJ (tax ID) in days. The damage appears months later, in tax regime eligibility, in accounting fees of R$ 500 to R$ 2,800 per month, and in the cost of converting the structure to bring in investors.

Three structural traps explain almost every case we see:

• Tax regime lock-out. A Sociedade Anônima can never use Simples Nacional, the simplified regime with rates starting near 4% for annual revenue up to R$ 4.8 million. Choosing an S.A. for a small service company can mean paying three to five times more tax forever.
• The wrong single-owner vehicle. Founders who want to be the sole owner are often pushed into a two-partner LTDA with a “nominee” friend or local relative holding 1%. That creates a real partner with real legal rights. The SLU exists precisely to avoid this.
• Paying to restructure twice. An SLU cannot simply admit a second shareholder. It must first be amended into a multi-partner LTDA, or converted into an S.A. Each step means new articles of association, new registry filings and new translations.

Add one legal detail almost nobody mentions upfront: under the Simples Nacional statute (Complementary Law 123/2006), a company whose partner is domiciled abroad is excluded from the regime. So the same LTDA that would pay 6% under Simples Nacional may be forced into Lucro Presumido (presumed profit) simply because its owner lives in Lisbon rather than São Paulo.

Does Brazil Have an SAS? What Foreigners Searching for It Actually Need

No. Brazil has no Sociedad por Acciones Simplificada. The SAS exists in Colombia, Mexico, Chile, Argentina and France, not in Brazilian company law. The closest Brazilian equivalent is the closely held Sociedade Anônima (S.A. de capital fechado), governed by Law 6.404/1976, which was significantly simplified for smaller companies by Law 14.195/2021.

If you are Colombian, French, Mexican or Argentine, you probably searched for “SAS Brazil” expecting a cheap, flexible share-based company with one shareholder and minimal formalities. In Brazil, that role is played by the LTDA, not by the S.A. The LTDA is contractual, private, and does not publish its accounts.

That said, the Brazilian S.A. is no longer the heavy monster it was. Two amendments brought by Law 14.195/2021 to the Corporations Law matter for foreign founders:

• A closely held S.A. may now have a single officer in its diretoria (board of officers), instead of the previous minimum of two.
• Closely held S.A.s with annual gross revenue below R$ 78 million (roughly US$ 15.3 million) are exempt from publishing corporate acts in newspapers and may publish electronically, which used to be one of the largest fixed costs of the format.

The Legal Framework for Startups (Complementary Law 182/2021) pushed in the same direction, creating lighter requirements for small corporations. Bills to create a genuine Brazilian “simplified joint-stock company” have circulated in Congress, but as of 2026 none has been enacted. So the choice remains LTDA, SLU or S.A.

LTDA vs SLU vs S.A.: How Do They Compare in 2026?

The LTDA and SLU share the same legal DNA under Articles 1.052 and following of the Brazilian Civil Code, differing only in the number of owners. The S.A. is a different animal: share-based, governed by Law 6.404/1976, barred from Simples Nacional, and with mandatory corporate books. Foreigners may own 100% of all three.

Feature	LTDA	SLU	S.A. (closely held)
Legal basis	Civil Code, Art. 1.052 onward	Civil Code, Art. 1.052 (Law 13.874/2019)	Law 6.404/1976
Owners required	2 or more	Exactly 1	1 or more shareholders
Minimum capital	None by law	None by law	None by law (10% paid in cash at subscription)
100% foreign ownership	Yes	Yes	Yes
Resident legal representative needed	Yes, if owner lives abroad	Yes, if owner lives abroad	Yes, for non-resident shareholders
Simples Nacional eligible	Yes, if no partner is domiciled abroad and revenue is under R$ 4.8M	Same condition	Never
Publication of corporate acts	Not required	Not required	Electronic if revenue is under R$ 78M
Typical monthly accounting cost	R$ 500-1,500	R$ 500-1,200	R$ 1,500-2,800
Investor-ready (share classes, options)	Limited	No	Yes
Best for	Partnerships, family businesses, operating companies	Solo founders, consultants, holding of assets	Venture-backed startups, multiple investors, future sale

How it works: You do not pick a “company type” in isolation. You pick a company type plus a tax regime plus a shareholder map. The LTDA and SLU keep all three doors open and cheap. The S.A. closes the Simples Nacional door permanently, in exchange for governance tools you only need if you will raise capital.

Where Does the LTDA Default Rule Not Apply?

The LTDA stops being the right answer in roughly five identifiable situations. In our practice they cover well under 10% of foreign clients, but when they apply, choosing an LTDA costs more than choosing an S.A. would have. The decisive factors are investors, share classes and regulated activity.

1. You will raise venture capital within 24 months

Brazilian and foreign funds invest in ações (shares), not quotas. Convertible notes, preferred shares with liquidation preference, drag-along and tag-along clauses and stock option plans all work natively in an S.A. In an LTDA they must be improvised through the articles of association and a shareholders’ agreement, and sophisticated funds will require conversion before closing.

2. You need more than two classes of economic rights

If one group of owners must receive dividends without voting rights, or vice versa, the S.A. handles it cleanly with preferred and common shares. An LTDA can distribute profits disproportionately to capital, but the arrangement is harder to defend if a partner later disputes it.

3. Your activity is regulated

Payment institutions, insurance, consortium administrators and several financial activities supervised by the Banco Central do Brasil require corporate form, minimum capital and governance that in practice point to an S.A. Other sectors cap foreign participation entirely, including broadcasting, domestic airlines (subject to statutory limits) and rural land acquisition.

4. You have many small shareholders

Every change in an LTDA’s quota ownership requires an amendment to the articles of association, signed and filed with the commercial registry. With twelve shareholders in four countries, that becomes a logistical nightmare. Share transfers in an S.A. are recorded in corporate books, with no registry filing.

5. You are building a structure for an investor visa

An LTDA works perfectly for the R$ 500,000 investment route, and R$ 150,000 applies for innovation-based projects. But the investment plan, not the company type, is what immigration authorities scrutinise. Read the details in our analysis of the Brazil investor visa residency rules before you draft the capital clause.

What Is the Best Argument for Starting With an S.A., and Does It Hold?

The strongest counter-argument comes from corporate lawyers advising venture-backed founders, and it deserves a serious answer: converting an LTDA into an S.A. later is not free. It typically costs R$ 10,000 to R$ 25,000 in legal and registry work, plus 60-90 days, and it always lands at the worst possible moment, mid due diligence.

Their case, stated fully: a serious investor will not sign into a quota structure. Conversion requires unanimous or qualified approval, an opening balance sheet, appraisal of assets, new books and registry publication. If the company already has a Simples Nacional history, exiting the regime mid-year creates tax transition issues. So why not start as an S.A. and avoid all of it?

Because the argument assumes the funding round happens. Most do not, or happen two to four years later than planned. In the meantime the S.A. burns real money every month: higher accounting fees, mandatory annual shareholders’ meeting with filed minutes, corporate books, and the permanent loss of Simples Nacional. Over three years, that gap alone commonly exceeds R$ 60,000, far more than the conversion cost.

The argument is right, however, when there is a term sheet on the table, a committed lead investor, or a sector that legally demands an S.A. In that case, start as an S.A. and do not pay to restructure twice.

How Do You Register the Right Structure Without Going to Court?

Almost everything is administrative. Registration runs through the integrated Redesim system and the state commercial registry, and a CNPJ (company tax ID) is normally issued within 2-10 business days once documents are correct. Nothing requires a judge. The slow part is document preparation abroad, not the Brazilian filing.

The practical sequence for a foreign owner:

• Get a Brazilian CPF (individual taxpayer number). Non-residents can request it through a Brazilian consulate or online with Receita Federal. Every owner and officer needs one.
• Appoint a resident legal representative. Owners living abroad must grant a power of attorney to a person resident in Brazil, with powers to receive service of process and represent them before authorities.
• Legalise your documents. Passport copy, proof of address and the power of attorney must be notarised, apostilled under the Hague Convention and translated by a tradutor público juramentado (sworn public translator). Budget R$ 80-150 per translated page.
• Secure a registered address. You cannot obtain a CNPJ without a valid business address with municipal zoning clearance. If you have no premises yet, a fiscal address in Brazil satisfies this requirement legally.
• File the articles of association with the state junta comercial via Redesim on gov.br, then obtain the CNPJ, municipal licence and state registration if you sell goods.
• Register the foreign capital with the Banco Central do Brasil through the SCE-IED module. Skip this and you cannot legally repatriate capital or dividends later.

For the complete paperwork list by owner profile, see our 2026 checklist of documents to open a company in Brazil.

When Does a Company Type Problem End Up in Court?

Rarely at formation, often afterwards. Three scenarios send foreign owners to litigation: an unlawful registry refusal, a dispute with a nominee partner, and a deadlocked LTDA. Brazilian civil cases in the first instance commonly take 2-4 years, according to data published by the National Council of Justice (CNJ), so prevention is dramatically cheaper.

If a junta comercial rejects your filing for a reason not supported by law, the usual remedy is an administrative appeal to DREI, and if that fails, a mandado de segurança (writ of mandamus). These writs are comparatively fast, often decided within 3-8 months, with legal fees from roughly R$ 8,000 upward depending on complexity.

Partner disputes are worse. If you used a local friend as a 1% “nominee” to form a two-partner LTDA instead of an SLU, that person is legally a partner, with voting, information and withdrawal rights. Removing them requires either a negotiated buyout or a judicial exclusion action. Brazil is a Civil Law country, so the written articles of association, not informal understanding, decide the outcome.

For shareholder conflicts with cross-border elements, an arbitration clause in the articles of association is frequently faster than the courts. Compare the trade-offs in our review of arbitration versus court in Brazil.

What Changed in 2026 for Foreign-Owned Company Types?

No new company type was created for 2026. The structural landscape remains the one set by Law 14.195/2021: EIRELI abolished, closely held S.A.s simplified, single-officer boards allowed, and electronic publication for corporations below R$ 78 million in revenue. The meaningful 2026 changes are fiscal, not corporate.

• Dividend taxation. The income tax reform enacted as Law 15.270/2025 introduced withholding on dividends, including a 10% rate on profits remitted to shareholders abroad. This affects how you plan owner compensation, regardless of company type.
• Simples Nacional thresholds. The R$ 4.8 million annual revenue cap remains the dividing line for the simplified regime, and the exclusion of companies with partners domiciled abroad remains in force.
• Digital registration. Most state registries now accept fully digital filings with gov.br certified signatures, cutting formation time to days once documents are legalised.
• Consumption tax transition. The CBS and IBS transition under the consumption tax reform continues through the second half of the decade, which will change how service companies compare tax regimes.

Quick recap: LTDA for partnerships, SLU for solo owners, S.A. only when real investors or regulation demand it, and EIRELI never. If your adviser disagrees, ask them to point to the article of law that supports their recommendation.

Which Mistakes Cost Foreigners the Most?

The most expensive errors are structural and silent. They do not block registration, which is exactly why they go unnoticed for months. By the time an accountant flags the problem, the company has already filed tax returns under the wrong regime or signed contracts in the wrong entity.

• Buying an “EIRELI formation” package in 2026.
• Registering an S.A. for a small service business, permanently losing Simples Nacional.
• Inventing a nominee partner instead of using the SLU.
• Skipping the Banco Central foreign capital registration, which freezes future repatriation.
• Drafting the articles of association in English only. The registry filing must be in Portuguese.
• Listing a CNAE activity code that does not match what you actually sell, which can block municipal licensing and Simples Nacional eligibility.
• Leaving the resident legal representative clause vague, which can invalidate service of process and expose you to default judgments.

Frequently Asked Questions

Can a foreigner own 100% of a Brazilian company?

Yes. A non-resident foreigner can own 100% of an LTDA, an SLU or a Sociedade Anônima, with no local partner required. The conditions are a Brazilian CPF, a resident legal representative with a power of attorney, and registration of the foreign capital with the Banco Central. Restrictions apply only in specific sectors such as broadcasting, rural land and certain aviation and financial activities. Administrators of the company, however, must be resident in Brazil or hold a valid residence permit.

What happened to my existing EIRELI?

It became an SLU automatically. Under Article 41 of Law 14.195/2021, every EIRELI was converted into a single-member limited liability company by the commercial registries, without any filing or fee from the owner. Your CNPJ, bank accounts and contracts remain valid. In practice you should update your articles of association, letterhead and banking records at the next amendment, so that documents match the registry. No deadline penalty applies to the conversion itself.

Is the Brazilian S.A. really the same as an SAS?

No. The SAS of Colombia, Mexico, Chile, Argentina and France was designed as a light, flexible share company for small businesses. Brazil’s Sociedade Anônima, under Law 6.404/1976, is a full corporation, even in its closely held form. Law 14.195/2021 reduced the burden by allowing a single officer and electronic publication below R$ 78 million in revenue, but the format still requires corporate books, annual meetings and more expensive accounting than an LTDA.

Can I switch from an LTDA to an S.A. later?

Yes. Conversion (transformação) is expressly permitted by the Civil Code and does not dissolve the company, so the CNPJ is preserved. You will need shareholder approval under the quorum set in the articles of association, an opening balance sheet, new corporate statutes, registry filing and the opening of corporate books. Expect R$ 10,000 to R$ 25,000 in professional and registry costs and 60-90 days. Plan it before due diligence starts, not during.

Does opening a company give me residency in Brazil?

Not by itself. A CNPJ is a tax registration, not an immigration status. Residency through investment generally requires a qualified investment of R$ 500,000, or R$ 150,000 for innovation and technology projects, supported by an investment plan and job creation commitments assessed by Brazilian immigration authorities. You can legally own and fund a Brazilian company while living abroad, using a resident legal representative, and apply for residency separately when the investment is in place.

Do I need to be in Brazil to register the company?

No. The entire process can be done remotely through a power of attorney granted to a lawyer in Brazil, notarised and apostilled in your country, then sworn-translated into Portuguese. Most state registries now accept digital filings with gov.br certified electronic signatures. Opening the corporate bank account is the step most likely to require your physical presence or a video verification, depending on the bank’s compliance policy.

Choose the Right Brazilian Company Type With a Bilingual Lawyer

Choosing between an LTDA, an SLU and an S.A. is not a form-filling exercise. It determines your tax bill, your ability to bring in partners and your ability to take money out of Brazil. Our bilingual team, registered with the OAB (Brazilian Bar Association), reviews your business plan, your residency situation and your funding timeline before a single document is drafted.

Your concrete next step: send us three facts, what you will sell in Brazil, how many owners there will be, and whether any owner will live abroad. With those answers we can tell you which structure fits and what it will cost, before you pay anyone to register anything. You can also start with our overview of company formation for foreigners in Brazil in 2026.