The Federal Official Gazette of December 30, 2021 published Law n* 14,826, of 12/29/2021 (“Foreign Exchange Legal Framework”), which creates the new Legal Framework for the Foreign Exchange Market and provides for the modernization of the foreign exchange market in the country.

The new regulation presents several changes to  the Brazilian exchange market, providing individuals, corporate entities and financial institutions, a larger range of options to use of their resources in foreign currency in their transactions abroad. The new legislation revokes of several laws and decrees that were in force.

Main changes introduced by the new legislation, include:

  • Increase in the manual exchange limit (purchase and sale of foreign currency), making it possible to enter and exit values of amounts up to USD10,000.00 or its equivalent amount in other foreign currencies without requiring a transaction authorized by a financial institution authorized to operate. The limit of USD500.00 remains for transactions between individuals;
  • Authorization for application of funds raised by banks and financial institutions in Brazil and abroad for credit or financing transactions directly abroad, according to the other regulatory requirements and the specific operation of each institution;
  • Authorization for bank accounts to be hold in Brazil in foreign currency for individuals and corporate   The Central Bank will specifically regulate this issue;
  • Expansion of the number of cases in which payment in foreign currency is permitted, in leasing contracts based on funds raised abroad with a reduced regulatory requirements for authorization of assignment and registration;
  • Authorization for remittance abroad by multinationals of profits, dividends, interest and royalties without the need to register the same with the Central Bank, the obligation to pay the respective levied being maintained taxes.
  • Authorization for the international private offsetting of monies in specific cases that be regulated by the Central Bank and
  • Eliminating the requirement for the presentation of documentation, data and certificates by the client to financial institutions authorized to operate in the foreign exchange market that have this information available in their databases or in public and private bases with broad access.

The Law will enter into force 1 (one) year after its publication, that is, on December 30, 2022, with this interval for the National Monetary Council (CMN) and the Central Bank to issue the specific regulations for rolling out the changes provided for in the Law, and market agents to be able to prepare their systems for the necessary adjustments.

Our team is available to clarify any doubts regarding the new legal framework for foreign exchange regulation.

 

Montgomery & Associates