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    "slug": "company-type-brazil-foreigners-ltda-vs-sas-2026",
    "title": "Best Company Type Brazil Foreigners: LTDA vs SAS 2026",
    "excerpt": "Choosing a company type in Brazil for foreigners? Compare LTDA, SLU and SAS in 2026 (EIRELI is abolished) to avoid costly tax mistakes.",
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    "content_markdown": "Here is the mistake that costs foreign investors the most money when picking a company type in Brazil: they choose the wrong structure at the start and lock themselves out of [Simples Nacional](https://www.ribeirocavalcante.com.br/doing-business-brazil/simples-nacional/), the simplified tax regime. For a small business earning R$ 500,000 a year, that error can mean paying 15-20% in taxes under Lucro Presumido instead of roughly 6% under Simples. Over three years, that is tens of thousands of reais gone. Even worse, some still try to open an EIRELI, a structure that was legally abolished in 2021 and no longer exists.\n\nSo let us cut through the confusion. For 95% of foreigners, the **LTDA** (including its single-owner version, the SLU) is the right answer. The **SAS** only makes sense if you plan to raise investment or scale into a corporation. And the **EIRELI** is dead. This article shows you exactly where each structure gets people into trouble, and how to pick the one that fits your plan.\n\nLeia também:\n[BACEN Registration Brazil 2026: RDE-IED Guide](https://www.ribeirocavalcante.com.br/bacen-registration-brazil-rde-ied-2026/)\n\n<a id=\"which-company-types-can-foreigners-actually-use-in-brazil-in-2026\"></a>\n## Which Company Types Can Foreigners Actually Use in Brazil in 2026?\n\nIn 2026, foreigners can use three active company types: the LTDA (Sociedade Limitada), its single-owner subtype the SLU (Sociedade Limitada Unipessoal), and the SAS (simplified Sociedade Anônima). The EIRELI was abolished by Law 14.195/2021 and can no longer be formed. Foreigners hold the same ownership rights as Brazilians.\n\nBrazil follows a Civil Law system, so company types are defined by statute, not by custom or contract freedom the way Common Law jurisdictions allow. Under the Brazilian Civil Code (Law 10.406/2002) and the Economic Freedom Law (Law 13.874/2019), a foreigner can own 100% of a Brazilian limited company without a local partner. This was not always true. Before 2019, you needed a second “token” partner just to satisfy the two-owner rule.\n\nThe rule is simple: pick between LTDA, SLU, and SAS. The complexity comes from what each one lets you do next, especially around taxes, liability, and bringing in investors. That is where most claims of “I chose the wrong company” originate, and where we will spend the second half of this article.\n\nLeia também:\n[Open Company in Brazil 2026: Best Structure for US Firms](https://www.ribeirocavalcante.com.br/open-company-in-brazil-us-business-legal-structure-2026/)\n\n**Important:** A foreign owner does not need to live in Brazil to hold shares, but every foreign partner must have a CPF (individual taxpayer number) and appoint a resident legal representative in Brazil. Without that representative, your registration will be rejected at the Junta Comercial (Board of Trade).\n\n<a id=\"how-does-the-ltda-work-and-why-is-it-the-default-choice\"></a>\n## How Does the LTDA Work, and Why Is It the Default Choice?\n\nThe LTDA (Sociedade Limitada) is a limited liability company with two or more partners, governed by the Brazilian Civil Code (Articles 1.052 to 1.087). It has no legal minimum share capital for most activities, registration at the Junta Comercial costs roughly R$ 150-400, and it qualifies for Simples Nacional up to R$ 4.8 million in annual revenue.\n\nThe LTDA is the workhorse of Brazilian business. Your liability is limited to the capital you invest, so your personal assets abroad are protected as long as you do not commit fraud or mix personal and company money. The rules are governed by a simple contrato social (articles of association), not a rigid corporate charter.\n\n- **Requirements:** two or more partners, a contrato social, a CPF for each foreign partner, and a Brazilian resident administrator.\n- **Pros:** cheap, fast, flexible, and eligible for Simples Nacional (potential tax rates from around 6%).\n- **Cons:** harder to bring in outside investors than the SAS, and profit distribution rules are less flexible for complex share classes.\n\nThe typical setup cost with an accountant or lawyer runs R$ 1,500-5,000. That covers drafting the contrato social, registering the CNPJ (company tax ID) with the [Receita Federal\r\n\r\n](https://www.gov.br/receitafederal/pt-br), and enrolling with the Junta Comercial and municipal authorities.\n\n**Example:** A Portuguese consultant opening an LTDA with a Brazilian friend, each holding 50%, invests R$ 10,000 as capital. Setup costs R$ 2,800. Under Simples Nacional, on R$ 300,000 of annual revenue, she pays roughly R$ 18,000 in combined taxes instead of the R$ 45,000+ she would face under Lucro Presumido.\n\n<a id=\"what-is-the-slu-and-when-should-a-solo-foreigner-use-it\"></a>\n## What Is the SLU, and When Should a Solo Foreigner Use It?\n\nThe SLU (Sociedade Limitada Unipessoal) is a single-owner subtype of the LTDA, created by the Economic Freedom Law (Law 13.874/2019). It lets one person own 100% of a limited liability company with no second partner and no minimum capital. It carries the same low costs and Simples Nacional eligibility as a standard LTDA.\n\nThe SLU exists because the old EIRELI failed a lot of small entrepreneurs. If you are a solo digital nomad, freelancer, or single investor, the SLU is almost always your structure. You get full liability protection without needing to find and trust a business partner, and without locking up a large sum of capital.\n\nThis is the single most important point for solo foreigners: the SLU replaced the EIRELI entirely. When the EIRELI was abolished by Law 14.195/2021 (Article 41), all existing EIRELIs were automatically converted into SLUs by the National Department of Business Registration (DREI). If someone still tells you to “open an EIRELI,” they are working from outdated 2020 information.\n\n**Watch out:** The old EIRELI required minimum capital of 100 times the national minimum wage. With the 2026 minimum wage near R$ 1,518, that would be about R$ 151,800 locked in the company with no easy return until dissolution. The SLU has no such requirement. If you converted an EIRELI to an SLU, that capital is now free to work.\n\n<a id=\"how-does-the-sas-work-and-who-actually-needs-it\"></a>\n## How Does the SAS Work, and Who Actually Needs It?\n\nThe SAS is a simplified corporation (a lighter Sociedade Anônima) built for businesses that plan to raise investment or issue multiple share classes. It has no general minimum capital but must issue shares, is generally excluded from Simples Nacional, and typically costs R$ 3,000-8,000+ to set up with professional help.\n\nThe SAS shines for startups seeking venture capital, businesses planning to onboard many shareholders, or companies that want investor-friendly features like preferred shares and vesting. Its governance is more formal: you deal with shares, shareholder meetings, and stricter reporting than an LTDA.\n\n- **Pros:** easy to bring in investors, supports different share classes, and signals scale to venture funds.\n- **Cons:** generally locked out of Simples Nacional (so higher taxes for small revenue), more compliance, higher costs, and more mandatory publications.\n\nHere is where the SAS trips people up: they choose it because it “sounds more serious” or more corporate. Then they discover they are paying Lucro Presumido or Lucro Real taxes on modest revenue that an LTDA would have shielded under Simples. For a company earning under R$ 4.8 million, that decision alone can cost double-digit percentages of profit every year.\n\nIf you are not raising outside capital in the next two to three years, you probably do not need the SAS. And even if you plan to, many founders start as an LTDA and convert to an SAS later, right before a funding round. Read more in our overview of [the best company type for foreigners](https://www.ribeirocavalcante.com.br/doing-business-brazil/best-company-type/).\n\n<a id=\"ltda-vs-slu-vs-sas-full-comparison-table-for-2026\"></a>\n## LTDA vs SLU vs SAS: Full Comparison Table for 2026\n\nThe quickest way to see where each structure fits is side by side. The LTDA and SLU win on simplicity, cost, and tax efficiency. The SAS wins only when you need to raise capital or issue shares to multiple investors. All figures below are approximate 2026 values.\n\n| Criterion | LTDA | SLU | SAS |\n| --- | --- | --- | --- |\n| Number of owners | 2 or more | Exactly 1 | 1 or more (shareholders) |\n| Minimum capital | None (most activities) | None | None general, but shares issued |\n| Liability protection | Limited to capital | Limited to capital | Limited to shares |\n| Simples Nacional eligible | Yes (up to R$ 4.8M/yr) | Yes (up to R$ 4.8M/yr) | Generally no |\n| Junta Comercial fee | ~R$ 150-400 | ~R$ 150-400 | Similar, plus publications |\n| Typical setup cost | R$ 1,500-5,000 | R$ 1,500-5,000 | R$ 3,000-8,000+ |\n| Bring in investors | Moderate | Must add partner first | Easy (share classes) |\n| Compliance burden | Low | Low | High |\n| Best for | Small partnerships | Solo entrepreneurs | Startups raising capital |\n\n**Tip:** Exchange rate reference for 2026 is roughly R$ 5.00 to US$1 and R$ 5.50 to €1. So a Junta Comercial fee of R$ 400 is about US$80 or €73, and a full R$ 5,000 setup is around US$1,000 or €910.\n\n<a id=\"what-are-the-tax-regime-options-for-each-company-type\"></a>\n## What Are the Tax Regime Options for Each Company Type?\n\nBrazil has three main tax regimes: Simples Nacional (revenue up to R$ 4.8 million/year, rates from about 6%), Lucro Presumido (profit assumed as a percentage of revenue), and Lucro Real (tax on actual profit). LTDAs and SLUs can use all three. The SAS is generally limited to Lucro Presumido or Lucro Real.\n\n![Dois homens em aperto de mãos, um com documentos, em ambiente de escritório com moto ao fundo.](https://cdn.ribeirocavalcante.com.br/2026/08/company-formation-for-foreigners-in-brazil-inline-1-565847-1786120596.jpg)\n*Which company types can foreigners actually use in brazil in 2026? — foto: rdne stock project*\n\nThis is the tax layer most foreigners underestimate, and it is where the “wrong company” mistake truly bites. Choosing an SAS for a small service business is like choosing to pay tax on the harder setting. The structure and the tax regime are linked decisions, not separate ones.\n\n- **Simples Nacional:** one unified monthly payment covering most taxes. Rates start near 6% and climb with revenue. Only LTDA/SLU (and MEI) qualify. See our [Simples Nacional guide for foreigners](https://www.ribeirocavalcante.com.br/doing-business-brazil/simples-nacional/).\n- **Lucro Presumido:** the government presumes a profit margin and taxes it. Common for mid-size service and trade firms above the Simples cap.\n- **Lucro Real:** tax on actual audited profit. Mandatory for large companies and certain regulated sectors.\n\nWhen you eventually distribute profits abroad, the tax treatment matters too. Our article on [repatriating profits from Brazil](https://www.ribeirocavalcante.com.br/doing-business-brazil/profit-remittance/) explains how dividend taxation ranges from 0% to 15% depending on the rules in force. And any foreign capital you inject must be registered with the Central Bank, as covered in our [BACEN foreign investment registration guide](https://www.ribeirocavalcante.com.br/doing-business-brazil/foreign-investment-bacen/).\n\n**Example:** A software freelancer runs an SLU earning R$ 200,000/year under Simples Nacional and pays roughly 6-8% in taxes. His friend set up an SAS “to look professional” and now pays Lucro Presumido, effectively 13-16% of revenue. On identical income, the SAS owner loses well over R$ 15,000 a year.\n\n<a id=\"where-the-default-ltda-rule-does-not-apply-real-exceptions\"></a>\n## Where the Default LTDA Rule Does Not Apply: Real Exceptions\n\nThe LTDA is the right choice for about 95% of foreigners, but not all. The SAS becomes the better structure when you plan to raise venture capital, issue preferred or vesting shares, onboard many shareholders, or operate in a sector that requires a corporation. In those cases, an LTDA can actively block your growth.\n\nNow for the strongest argument on the other side. A venture capital fund or a sophisticated angel investor will often tell you, correctly, that they will not invest into an LTDA. Their reasoning is real: LTDAs make it clumsy to create share classes, grant stock options, set up vesting, and manage a cap table with many small holders. Corporate law gives the SAS clean, well-tested tools for all of that. From an investor’s chair, the SAS is not vanity, it is infrastructure.\n\n[\n\n![Best Company Type Brazil Foreigners: LTDA vs SAS 2026](https://cdn.ribeirocavalcante.com.br/web-stories/poster-best-company-type-brazil-forei-1786121181.webp)\n\n](https://www.ribeirocavalcante.com.br/web-stories/company-type-brazil-foreigners-ltda-vs-sas-2026/)\n\n⚡ Web Story\n[Best Company Type Brazil Foreigners: LTDA vs SAS 2026](https://www.ribeirocavalcante.com.br/web-stories/company-type-brazil-foreigners-ltda-vs-sas-2026/)\n[Ver história visual ›](https://www.ribeirocavalcante.com.br/web-stories/company-type-brazil-foreigners-ltda-vs-sas-2026/)\n\n\nThat argument holds, but only for companies that are actually raising money soon. Here is the answer: if a funding round is more than 18-24 months away, the cost of running an SAS (higher taxes outside Simples, mandatory publications, heavier compliance) usually outweighs the benefit. The efficient path for most founders is to start lean as an LTDA or SLU, then convert to an SAS shortly before the round closes. Conversion is a standard, well-documented procedure at the Junta Comercial.\n\nOther genuine exceptions where the LTDA rule bends:\n\n- Regulated activities (some financial or insurance operations) that legally require an S/A structure.\n- Businesses expecting revenue well above R$ 4.8 million from day one, where Simples is off the table anyway, reducing the LTDA’s tax edge.\n- Employee stock ownership plans across many staff, far easier with issued shares.\n\n**Important:** If a solo founder wants an SLU but plans to raise capital, remember an SLU has exactly one owner. To add investors you must first convert it to a multi-partner LTDA or an SAS. Plan the sequence with your lawyer so you do not pay to restructure twice.\n\n<a id=\"what-changed-in-2026-for-foreign-owned-company-formation\"></a>\n## What Changed in 2026 for Foreign-Owned Company Formation?\n\nThe biggest structural change remains the abolition of the EIRELI by Law 14.195/2021, still fully in effect in 2026. There is no new EIRELI. The SLU is now the only single-owner limited liability vehicle. Digital registration through the Junta Comercial and gov.br has also continued to speed up formation timelines.\n\nBeyond the EIRELI sunset, the trend in 2026 is streamlining. Many states let you register the company, obtain the CNPJ, and enroll for taxes largely online through integrated portals. The Economic Freedom Law reforms that removed the second-partner requirement for limited companies remain the backbone of solo formation.\n\nForeign owners should also stay alert to two ongoing compliance duties that catch newcomers off guard. First, data protection: if you handle personal data, you must comply with Brazil’s data law, as we explain in our guide on [LGPD compliance for foreign companies](https://www.ribeirocavalcante.com.br/doing-business-brazil/lgpd-compliance/). Second, if you were ever a Brazilian tax resident and leave, you must file the exit declaration, covered in our article on the [Brazil tax exit declaration](https://www.ribeirocavalcante.com.br/brazil-tax-foreigners/tax-exit-declaration/).\n\nFor a broader current overview, see our main guide on [company formation for foreigners in Brazil in 2026](https://www.ribeirocavalcante.com.br/company-formation-for-foreigners-in-brazil-2026/).\n\n<a id=\"step-by-step-how-to-set-up-an-ltda-or-slu-as-a-foreign-investor\"></a>\n## Step by Step: How to Set Up an LTDA or SLU as a Foreign Investor\n\nTo set up an LTDA or SLU, a foreigner needs a CPF (individual taxpayer number), a Brazilian resident legal representative, a registered fiscal address, and a contrato social. Registration runs through the Junta Comercial and Receita Federal, usually taking 10-30 business days depending on the state.\n\n- **Step 1:** Obtain a CPF for every foreign partner. Non-residents can request it through a Brazilian consulate or via a legal representative.\n- **Step 2:** Appoint a resident administrator or legal representative for non-resident owners. This is mandatory.\n- **Step 3:** Secure a registered business address. You need a [fiscal address in Brazil](https://address.ribeirocavalcante.com.br/) to open a CNPJ, and Ribeiro Cavalcante offers this service.\n- **Step 4:** Draft the contrato social defining capital, owners, activity codes (CNAE), and the administrator.\n- **Step 5:** Register with the Junta Comercial and obtain the CNPJ from the Receita Federal.\n- **Step 6:** Enroll for municipal and, if trading goods, state tax registrations, then open a corporate bank account.\n- **Step 7:** Choose your tax regime (Simples Nacional if eligible) with your accountant.\n\n**Caution:** Documents issued abroad (passport, proof of address, corporate documents of a foreign parent company) usually need an apostille under the Hague Convention and a sworn Portuguese translation. Missing this is the most common reason a foreign registration stalls at the cartório (notary office) or Junta Comercial.\n\n<a id=\"which-company-type-should-you-choose-a-quick-decision-guide\"></a>\n## Which Company Type Should You Choose? A Quick Decision Guide\n\n- **If you are a solo entrepreneur, freelancer, or single investor:** choose the SLU. Full liability protection, no partner needed, no capital lock-up, and Simples Nacional eligibility.\n- **If you have one or more business partners and expect revenue under R$ 4.8 million:** choose the LTDA. Cheap, flexible, and tax-efficient.\n- **If you are raising venture capital within the next 12-18 months or need multiple share classes:** choose the SAS, or start as an LTDA and convert before the round.\n- **If someone suggests an EIRELI:** stop. It no longer exists. Use the SLU.\n\n<a id=\"frequently-asked-questions\"></a>\n## Frequently Asked Questions\n\n<a id=\"can-a-foreigner-own-100-of-a-brazilian-company\"></a>\n### Can a foreigner own 100% of a Brazilian company?\n\nYes. Under the Brazilian Civil Code and the Economic Freedom Law (Law 13.874/2019), a foreigner can own 100% of an LTDA or an SLU with no Brazilian partner required. You do not need to live in Brazil, but you must have a CPF and appoint a Brazilian resident legal representative. A few regulated sectors, such as certain media, aviation, and border-zone activities, still carry ownership restrictions, so confirm your specific CNAE activity code before registering.\n\n<a id=\"can-i-still-open-an-eireli-in-2026\"></a>\n### Can I still open an EIRELI in 2026?\n\nNo. The EIRELI was abolished by Law 14.195/2021 (Article 41), and existing EIRELIs were automatically converted into SLUs through DREI Normative Instruction No. 55/2021. In 2026 you cannot form a new EIRELI. The SLU (Sociedade Limitada Unipessoal) fully replaces it, and it is better: no minimum capital requirement, whereas the old EIRELI forced you to lock roughly R$ 151,800 into the company at the 2026 minimum wage.\n\n<a id=\"is-an-ltda-or-sas-better-for-a-startup-seeking-investors\"></a>\n### Is an LTDA or SAS better for a startup seeking investors?\n\nFor most early startups, an LTDA is fine to begin with because it is cheaper and can use Simples Nacional. However, if you will raise venture capital within 12-18 months, an SAS is better because it supports share classes, stock options, and vesting that investors expect. A common strategy is to start as an LTDA, keep costs low, and convert to an SAS shortly before your funding round closes.\n\n<a id=\"how-much-does-it-cost-to-open-an-ltda-in-brazil-as-a-foreigner\"></a>\n### How much does it cost to open an LTDA in Brazil as a foreigner?\n\nGovernment fees are low: the CNPJ is free and the Junta Comercial charges roughly R$ 150-400, depending on the state. With an accountant or lawyer handling the contrato social, apostilles, and translations, total setup typically runs R$ 1,500-5,000 (about US$300-1,000). There is no minimum share capital for most activities, so you can capitalize the company modestly, for example R$ 10,000, though the amount should match your real operating needs.\n\n<a id=\"do-i-need-to-live-in-brazil-to-own-a-company-here\"></a>\n### Do I need to live in Brazil to own a company here?\n\nNo. A non-resident foreigner can own an LTDA, SLU, or SAS. What you must have is a CPF and a Brazilian resident legal representative with powers granted through a power of attorney. That representative handles official notifications and signs where physical presence is required. You will also need a registered fiscal address to obtain the CNPJ. Living abroad does not stop ownership, but it does make appointing reliable local support essential.\n\n<a id=\"choose-the-right-company-type-in-brazil-with-expert-legal-help\"></a>\n## Choose the Right Company Type in Brazil with Expert Legal Help\n\nPicking between an LTDA, an SLU, and an SAS is not just a form to fill in. It shapes your tax bill, your liability, and your ability to grow, and the wrong pick can quietly cost you thousands every year. You do not have to guess. Our bilingual legal team helps foreigners choose the correct structure, register it correctly, and set up the most efficient tax regime from day one.\n\nSend us your business plan and residency situation, and we will tell you exactly which structure fits and what it will cost.\n\nTalk to a specialist lawyer now\n[ Talk to a Lawyer on WhatsApp](https://www.ribeirocavalcante.com.br/ads/wpp.html)",
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    "date_published": "2026-08-07T13:36:51-03:00",
    "date_modified": "2026-08-07T13:36:51-03:00",
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        "name": "Lucas Ribeiro Cavalcante",
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            "name": "eireli abolished brazil",
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    "faq": [
        {
            "question": "What is the best company type in Brazil for foreigners?",
            "answer": "For most foreigners, the LTDA (Sociedade Limitada) or its single-owner SLU is best, offering limited liability and access to the low-tax Simples Nacional regime."
        },
        {
            "question": "Can a foreigner own 100% of a company in Brazil?",
            "answer": "Yes. Since the 2019 Economic Freedom Law, a foreigner can own 100% of a Brazilian limited company without a local partner, but must have a CPF and appoint a resident legal representative."
        },
        {
            "question": "What is the difference between LTDA and SAS in Brazil?",
            "answer": "The LTDA is simpler and cheaper, ideal for small businesses. The SAS is a simplified corporation suited for companies planning to raise investment or scale into a larger corporate structure."
        },
        {
            "question": "Can you still open an EIRELI in Brazil in 2026?",
            "answer": "No. The EIRELI was abolished by Law 14.195/2021. Single owners should use the SLU (Sociedade Limitada Unipessoal) instead."
        },
        {
            "question": "Does a company type in Brazil for foreigners qualify for Simples Nacional?",
            "answer": "Yes, an LTDA or SLU can qualify for Simples Nacional up to R$ 4.8 million in annual revenue, taxed around 6% versus 15-20% under Lucro Presumido."
        }
    ],
    "table_of_contents": [
        {
            "level": 2,
            "text": "Which Company Types Can Foreigners Actually Use in Brazil in 2026?",
            "anchor": "which-company-types-can-foreigners-actually-use-in-brazil-in-2026"
        },
        {
            "level": 2,
            "text": "How Does the LTDA Work, and Why Is It the Default Choice?",
            "anchor": "how-does-the-ltda-work-and-why-is-it-the-default-choice"
        },
        {
            "level": 2,
            "text": "What Is the SLU, and When Should a Solo Foreigner Use It?",
            "anchor": "what-is-the-slu-and-when-should-a-solo-foreigner-use-it"
        },
        {
            "level": 2,
            "text": "How Does the SAS Work, and Who Actually Needs It?",
            "anchor": "how-does-the-sas-work-and-who-actually-needs-it"
        },
        {
            "level": 2,
            "text": "LTDA vs SLU vs SAS: Full Comparison Table for 2026",
            "anchor": "ltda-vs-slu-vs-sas-full-comparison-table-for-2026"
        },
        {
            "level": 2,
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