Problems relating to Trade and Investment on Brazil
23. Inefficient administrative procedures, regimes and practices |
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Issue |
Issue details |
Requests |
Reference |
| (1) Delayed Procedures for Acquisition of Licences and Approvals upon Establishment of Company | - It takes too long time for establishing the enterprise and acquiring the licences, permits and approvals. Especially as regards Importers Registration Procedures at Receita Federal, MFS encountered with the vast differences between the pre-entry feasibility research and the reality, in part due to the complicated legislation. As for one process of turning a company into a sleeping company it is necessary to liquidate. In effect, this requirement prolongs the liquidation process. | - It is requested that GOB: -- makes the system more transparent, and -- streamlines and expedites the procedure. |
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| (2) Complex/ Delayed Administrative Procedures | - In nearly all cases involving administration, it takes complex, time-consuming procedures. In the case of the reporting MFS, delays occurred concerning work visa application, new director registration, trademark registration, bonded warehouse application, etc., disrupting business operations. - All documents submitted to administrative organisation, in substance, require "Notarisation", incurring much time and cost. |
- It is requested that GOB conducts structural reform of its organisation. (including the excessive protection of the public servants.) - Notary public does not operate on the principle of competition. There are too many (meaningless) notarised documents that simply follow the time-honoured practices. It is requested that notary public will introduce the notion of "the market principle" and streamlines the procedures. |
- Ministry of Labour Regulations, etc. |
| (3) Tax Auditor's Unjustified Demand | - The Taxation Office Systems are fragile to the extreme. They send in notices for non-payment and payment in arrears. Enterprises must expend much time and labours in rebuttals on unfounded allegations.Customs employees unlawfully stop the customs clearance on the ground of deficiency in documents, demanding the bribes. As a result, the cargo flow stops. | - It is requested that: -- GOB streamlines the taxation system and reduces the tax rates, and -- Taxation Authority expedites their clerical work. -- GOB takes steps to give more details in legislation. |
- Federal Constitution - General Tax Law |
| (4) Complex Product Registration Procedures | - Product registration procedures are complex in regard to import/ distribution of medical equipment. | - It is requested that GOB repeals such product registration requirement, namely, once registered, no further renewal shall be necessary, as it has been the practice in Japan. | |
| (Action) - On 2 September 2015, Ministry of Finance and Ministry of Health, in their names, promulgated "Joint Decree No.701", trebling the registration charges of various kinds, effective from 9 September 2015. The list includes medical equipment, pharmaceutical products, cosmetics and other registered products and charges necessary for various procedures. |
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| (Improvement) - Law No.13097 of 19 January 2015 was promulgated. It enables acquisition of GMP (Good Manufacturing Practices) accreditation, mandated for product registration of certain medical equipment, pharmaceuticals/pharmaceutical ingredients through active use of GMP auditing/accrediting information and consigning GMP auditing to ANVISA accredited external/internal accreditation bodies. In addition, the product registration period has been extended to 10-years maximum from the previous 5-years. |
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| (5) Designation of Representative upon Incorporation of Local Legal Entity | - Where a foreign enterprise establishes locally incorporated legal entity (Limited Company), the limited company so established must have a representative consigned with the total rights of the foreign enterprise (parent company). Member firm has assigned Japanese expatriate, local President of the subsidiary as its representative. | - It is requested that GOB takes steps to repeal this provision of the relevant law. As it stands, the person so consigned can execute anything. This is risky to the parent company). | - Brazilian Corporation Law (So, it is said.) |
| (6) Mandated Description of Amounts in the Nota Fiscal (Tax Bill) | - In transport of merchandise, it is necessary to attach Nota Fiscal (tax bill), showing the amount of the goods, clearly printed. However, in the triangular transactions where goods are shipped direct from the manufacturer (supplier) to customers, purchase price of the seller gets divulged to the customer. | - It is requested that GOB exempts inclusion of price information in the Nota Fiscal in transactions taking the form of venda a ordem (triangular trade), where the transactions flow and the goods flow are separated. | - This is stipulated in the relative State Tax (ICMS) Law in each State. E.g. Sao Paulo State: Artigo 129, Section 2o e 3o do RICMS/2000-SP |
| (7) Shortage of Information | - Information is missing on the move for customs duty/domestic tax rate on MFP/LP products, as it stands, the domestic preferential tax rate applies to the products whose final production process takes place in Brazil. In addition, will customs duty/domestic tax scheme continue hereafter? |
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| (8) Reporting Requirements Galore | - Due to the huge reporting requirements to government necessitates assignment of several staffs solely dedicated to reporting work. Failure to report can result in high amount of fines. | - It is requested that GOB streamlines the reporting requirement. | - Brazilian Taxation System |
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