BRAZIL: Changes to Brazil foreign investment rules approved

Tuesday November 18 2014

Following on from the update of 8 April 2014, the Central Bank of Brazil has published Resolution No. 4,373 on changes to Brazil foreign investment rules currently contained in Resolution 2689/2000.

The following amendments to the rules have been approved:

• Permitting non-residents to invest in local currency through sources available in a nonresident’s local bank account or through overseas payment orders in local currency (Reais). The new rules now allow the investments under the Portfolio Investment to be registered either in Brazilian reais or in foreign currency, resembling the rules applicable mainly to Direct Investment. Prior to that, investments in Brazilian reais were not available for Portfolio investment.
• permitting DRs to be guaranteed by any security issued by a Brazilian public company. In the case of financial institutions and other publicly traded institutions authorized to operate by the Brazilian Central Bank, DRs can also be backed by credit securities eligible as Equity Reference.

The amendments will come into effect in March 2015.

Click on the above link for the resolution (in Portuguese).