Superior Court of Justice (STJ) allows foreign capital in Brazilian companies specializing in private security

Law No. 7.102 of June 20, 1983 (Law No. 7.102/83), which deals with private security services in the national territory, established, in its article 11, that companies specialized in providing security services are prohibited to foreigners.

However, on December 14, 2016, the 1st Section of the STJ understood that Brazilian companies that have foreign capital are not prevented from operating in the national market.

In the opinion of the rapporteur, Justice Herman Benjamin, Article 11 of Law No. 7.102/83 only prohibits companies incorporated abroad from operating in the private security sector. Companies incorporated under Brazilian law and headquartered in the country are legally considered Brazilian, regardless of whether they have foreign ownership or control.

Since, in practice, almost all foreign companies that invest in Brazil establish a Brazilian subsidiary that meets the requirements of Law 7.102/83, this is a green light for the entry of foreign capital to operate private security services.