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Brazilian Expatriates - Immigration Considerations 

Special immigration rules applicable to the oil and gas industry

A new regulatory mark for immigration in Brazil brings news possibilities for the oil and gas industry with a view to facilitate the hiring of highly qualified foreign employees.

The new Brazilian Migration Law was published on May 24th, 2017, and entered into force on November 21, 2017. There were various relevant changes in Brazilian migration scenario as the change of the visa categories, the implementation of the eVisa (electronic visa system) and the integration of databases of immigration authorities, resulting in better intelligence for the analysis of residence/visa processes and increased immigration scrutiny.

The particularities of the Brazilian Oil & Gas industry have resulted in the enactment of special rules by the immigration authorities to deal with the needs of the industry and its professionals. An example of such rules is the new visa category named “visitor”, which is applicable for tourism, business and vessel crewmembers on short stays. In addition, a specific normative resolution was issued to discipline the granting of residence permit for maritime on board a vessel or platform of foreign flag.

The purpose of this guide is to provide an overview of issues facing foreign workers moving to Brazil and so there are immigration aspects that will not be covered, such as the position of accompanying family members, the administrative formalities, and various mandatory documents that are required within a short time frame of arrival. 

Deploying Foreign Workers into Brazil 

The Brazilian immigration authorities only allow foreign nationals to work in Brazil if they obtain a residence permit and, in some cases, an appropriate visa. The first step is to consider the appropriate type of residence permit and/or visa that is required. There are a number of alternatives: visitor visa for short stay or, for long stays, prior residence permit and a temporary visa or a residence permit inside the country.

The residence permit is requested by a local company to the Brazilian Ministry of Labor. Accordingly, the individual is not allowed to work for a different local company unless a new residence permit is granted to him. 

Visitor Visa 

As its name implies, this visa is appropriate for individuals who come to Brazil as visitors on a short stay, without the intention of establishing residence. However, holders of a visitor visa can request a residence permit while in the country, if needed.

This new visa category is applicable for tourism and business on short stays. Different from the previous law, the new law created this visa type allowing both activities under just one visa. Furthermore, new activities, on short stays, are allowed under this visa category such as sports, arts, consulting, auditing and maritime business.

Business visitors might enter Brazil under eVisas, which are currently applicable for the following nationalities: Australian, American, Canadian and Japanese.

Holders of a visitor visa are not allowed to engage in paid activity in the country. Nevertheless, they can receive payments for travel expenses such as allowances, cachet, or other.

Visa waiver agreements remain the same and have not been impacted by the new law.

A valid visitor visa allows an individual to remain in Brazil for a period up to 180 days (90 days initially, with the possibility of an extension depending on the individual‘s nationality). The visitor visa issued to individuals for auditing and consulting services or maritime activities will have a period of stay of up to 90 days, non-extendable.

Organizations should carefully review their procedures to ensure that individuals on a visitor visa are correctly categorized as such. In case of assessment from immigration authorities, the performance of activities not allowed under the visitor visa, as the overstay for a period longer than accorded, may result in fines both for the company and the individual, as well as an eventual invitation for the individual to leave Brazil.

 

Residence Permit 

One important novelty from the migration law is the introduction of the concept of the residence permit, which is not a visa type. The issuance of a residence permit before the visa request is mandatory in some cases (e.g. temporary visas for work purposes are now directly linked to a residence permit). There is also the possibility to request the residence permit inside the country without needing to travel abroad to stamp the visa at the Consulate.

There are three main types of residence permits for work purposes that can be granted based on the activities the candidate will perform in Brazil and the related remuneration, as follows:  

Residence Permit With a Local Brazilian Employment Contract

In this case, an expatriate is employed by a Brazilian company.

As such, the individual is required to have a local employment contract and is thus entitled to all labor benefits and protections provided under Brazilian Labor Law. As a Brazilian employee, all local payroll taxes will be levied on the individual’s total compensation (i.e. including such costs as FGTS & INSS, etc.).  Employee benefits can increase a company´s payroll costs by 70-80%.  The nature of the benefits are detailed in Brazil’s Consolidated Labor Law. 

In hiring non-Brazilian nationals, companies need to be aware of the need to comply with the “2/3 rule”. That is, 2/3rds of the company’s employees must be Brazilian nationals and 2/3rds of total Brazilian payroll cost must be related to Brazilian national employees.

Local employment contracts need to be prepared in accordance with the Brazilian legislation. Some key points to be aware of are the following:

  • The total compensation paid to the individual must be reported in this contract (i.e. salary, and all benefits in cash or kind).
  • The local compensation package must be consistent with the compensation packages of other employees with similar functions and responsibilities.

This residence permit will allow the individuals and their dependents to live and work in Brazil for two years initially.

Residence Permit Without a Local Brazilian Employment Contract

In this case, an expatriate enters into Brazil with the intention of providing services to a local company, whilst remaining an employee of a non-Brazilian employer. A residence permit without a local employment contract must, therefore, be applied for. The individual is not employed by the Brazilian company and continues to receive 100% of his or hers salary from his or hers foreign employer. Unlike an expatriate who has a Brazilian employment contract, Brazilian payroll taxes are not applicable.  Depending on the home country situation, this could result in a net cost saving.

There are different residence permits applicable in this context. The relevant category will depend on the nature of the services to be provided, but typically they are under the “umbrella” of an existing Technical Assistance Agreement between a Brazilian and a foreign company. The categories are:

  • Service Agreement with Transfer of Technology – 1 year renewable for an equal period;
  • Technical Assistance Agreement or Technical Cooperation Agreement – 1 year renewable for an equal period; and,
  • Maritime Visa (applicable to technicians, who exclusively work on a rig) – 2 years.

Technical visas granted directly by the Brazilian consulates were discontinued and now a residence permit to provide technical assistance for up 180 days, even in emergency situations, should be requested before the Brazilian Ministry of Labor. It cannot be renewed, however a new and different residence permit can be requested. 

Residence Permit: Legal Representatives of Brazilian Entity

Foreign nationals who will act as executives of a Brazilian company and perform functions as, for example, signing documents, checks, and closing business deals on behalf of the Brazilian company will have to apply for this residence permit.

This group of individuals is commonly referred to as officers of a Brazilian company and thus are likely to occupy senior positions. 

In order to apply for this visa, a foreign company must invest in the Brazilian subsidiary either US$200,000 or US$50,000 combined with the creation of 10 new job positions over a two-year period. The investment has to be registered with the BACEN (Central Bank of Brazil), since the registration certificate is one of the mandatory documents to be filed with the immigration authorities to obtain the residence permit.

Board members are also required to apply for this type of residence permit. 

Tax Considerations

The facts and circumstances of each case will determine the most appropriate residence permit and/or visa that should be applied for and ultimately granted by the Brazilian authorities. There are, however, variations in the Brazilian tax treatment applied to each foreign worker based on their residence permit status and number of days in Brazil of which organizations should be aware. 

Know more about the Tax considerations regarding deploying foreign workers into Brazil.

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