Law No. 14286 was published on December 30, 2021, establishing a new legal framework for the Brazilian foreign exchange market, Brazilian capital abroad, foreign capital in Brazil and the provision of information to the Central Bank of Brazil - BCB. In general, the rule seeks to facilitate the use of foreign currency in the country and of reais abroad, including by reducing barriers for the import and export of products and services.
Among the innovations brought by the law, we highlight (i) permission for financial institutions to lend funds raised in Brazil to foreign clients, a practice previously prohibited by BCB Circular 24/66; (ii) more flexible private clearing of credits, in a manner to be determined by the Central Bank; and (iii) the possibility of dispensing with the authorization for institutions to operate in foreign exchange, in the events to be defined by the Central Bank.
Rules relating to leasing transactions have also been amended. The execution or assignment of such contracts with entities domiciled abroad no longer depend on the registration and authorization of the Central Bank. Furthermore, for contracts entered into between residents that provide for the raising of funds abroad, an obligation to pay in foreign currency may be established, and this permission may be extended to cases to be determined by the National Monetary Council when the stipulation in foreign currency may mitigate the foreign exchange risk or increase the efficiency of the business.
Among the other changes, it is worth highlighting (a) the permission for funds held abroad by exporters to be used in loan transactions; (b) the exemption from registration with the BCB for remittance of funds for profits, dividends, interest or royalties; and (c) the increase in the limit of money that can be taken by travellers entering or leaving the country (from R$10mil to US$10mil) subject to conditions to be established.
The new law will come into force on 30 December 2022.
Click here to access Law No. 14286 in its entirety. For further information, please contact the Financial Market team at our office ( [email protected]).
