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Approved new law regarding the foreign exchange market

On December 29th, 2021, President Jair Bolsonaro approved Law 14.286/2021, known as the Brazilian Legal Framework for the Exchange Market. This law was published in the Official Gazette of the Union on December 30th, 2021 and it is expected to be in force one year after its official publication.

The purpose of this Legal Framework is to consolidate the legal provisions regarding the Brazilian foreign exchange market, as well as to create a more receptive atmosphere for investments in Brazil. For this reason, the Legal Framework created mechanisms to promote the Brazilian exchange market. However, many provisions of the Legal Framework are still pending regulation by the Brazilian Central Bank and the National Monetary Council.

The Legal Framework increased the autonomy and freedom of the Central Bank and the National Monetary Council, so that they can regulate the exchange market, consequently indicating an optimistic scenario for regulatory modernization.

Similarly, it was created new possibilities to Brazilian banks and financial institutions, so that they can allocate, invest and destine funds raised both in Brazil and abroad for credit and financing operations abroad.

We emphasize below some important changes brought by the Legal Framework for the Exchange Market:

  • Possibility of opening a current account in Brazil in foreign currency;
  • Permission of negotiations between individuals up to USD 500 without the need to communicate any official entity;
  • Broadening of the cases in which payment in foreign currency will be allowed due to obligations carried out in the national territory, mainly in foreign trade operations;
  • Possibility of maintaining abroad funds in foreign currency related to receipts of Brazilian exports of goods and services abroad, carried out by residents in Brazil;
  • Possibility of private offsetting of credits or values between residents and non-residents, in the cases provided for in the Central Bank regulations;
  • Increase of the cash limit that each passenger can carry when leaving or entering Brazil, from the current BRL 10 thousand to USD 10 thousand or equivalent in another currency;
  • Remittances to foreign countries due to profits, dividends, interest, amortizations, royalties, scientific, administrative and similar technical assistance without the need for prior registration before the Central Bank and depending on proof of payment of the due income tax;
  • Possibility of exercising foreign exchange activities by other entities such as fintechs, always depending on the approval by the National Monetary Council and the Central Bank.

Our office remain at your disposal for any further assistance regarding the matter.