The latest progression for Brazil’s igaming space was analysed in depth as Jun Makuta, Partner at TozziniFreire, emphasised that next steps for international operators are essential when it comes to authorisation.
He was speaking alongside Adriana Tavares, Senior Associate at TozziniFreire Advogados, and SBC Noticias Brasil’s Isadora Marcante during a recent episode of iGamingDaily.
Makuta stated that he believes the ‘very first step’ for operators looking to enter the Brazilian space is to incorporate a legal entity in the country.
“It could be in the form of what we call here limitada, which would resemble a limited liability company, or it may also be in the form of a corporation, which in Brazil is called Sociedade Anônima,” he said.
Further laying out the options for operators looking to enter the market, he added: “There are also other types of legal entities that could be incorporated in Brazil, but the latest ordinance on the matter with regards to the authorisation process itself, it says that only Limitada or corporations would be accepted as authorised entities to operate sports betting in Brazil.
“The requirements would be more or less the same. The difference is that in the case of a limitada, it would be possible to incorporate a 100 per cent subsidiary, meaning that there would be the need for only one shareholder to incorporate a Brazilian entity in the form of a limitada. In the case of Sociedades Anonymous, however, if it is 100 per cent controlled by a foreign entity, we would have to have at least two shareholders.
“The second shareholder could be a minority one holding just one share just to meet the legal requirement of having at least two shareholders. So paperwork will be necessary, it will be necessary to register before Brazilian authorities, for example tax authorities.”
Tavares added that it is important for investors from overseas to be aware that entering into the Brazilian market is not as tricky as it may seem – “It’s more a matter of understanding the culture, understanding the procedure and how the mechanics work.”
According to the panel, it was clear that when the regulator was laying out regulatory frameworks, its intention was to require those guys that will take decisions within the company to be in Brazil.
However, they added that questions around the new framework will remain, including how many and how senior a team would need to be based in Brazil, which are questions that they believe clarity will be found on as the market opens up.
