How to legally operate your fintech in Brazil as a foreign company

Do you have a fintech abroad and are thinking about expanding to Brazil? Brazil offers a modern payment system, a large number of banked users, and a regulatory environment that is always improving. To operate legally in the country, it’s essential to understand the local requirements, legal obligations, and the best ways to structure your business. In this article, we explain in a clear and practical way how a foreign company can operate a fintech in Brazil in a regular and safe way.

1. Why is Brazil an attractive market for international fintechs?

In the past years, Brazil became one of the top countries for financial innovation. The wide use of PIX, the growth of Open Finance, and the strong presence of smartphones created a great opportunity for digital financial services. Also, the Central Bank of Brazil has been working hard to modernize the sector, which attracts investors and international companies interested in bringing tech solutions to the country.

2. How can a foreign company structure its operation in Brazil?

The most common way for a foreign fintech to operate in Brazil is by creating a local company controlled by foreign capital. This means that the foreign holding company becomes a shareholder or the controller of a Brazilian company. This local company will have its own CNPJ (Brazilian company registration), state or city registration (if needed), a local bank account, and will be responsible for all Brazilian legal and tax obligations. This process requires registering the foreign investment with the Central Bank of Brazil through the RDE-IED system (Electronic Declaratory Registration of Direct Foreign Investment).

In some specific cases, the foreign company can partner with a Brazilian institution already authorized to offer certain services (like payment institutions or financial companies) and act as a technology provider or white-label platform. This is a possible way to enter the market gradually, but it brings limitations in control and makes the operation dependent on third-party licenses.

3. Which fintech activities need authorization from the Central Bank?

Any fintech that wants to offer important financial services (like issuing electronic money, processing payments, offering credit with its own funds, or managing payment accounts) must get authorization from the Central Bank.

Depending on the business model, it may be necessary to create a Payment Institution (IP), a Direct Credit Company (SCD), or even a financial institution. The good news is that the authorization process is now more transparent, and with proper technical support, it is possible to prepare a complete application for the regulator. This includes business structure, financial capacity of the controllers, compliance, business plan, and the technology setup.

4. What are the main regulatory requirements for foreign companies?

Besides creating a Brazilian company and registering the foreign capital, the fintech must follow these steps:

• Submit an authorization request to the Central Bank (if applicable);
• Define the company structure clearly, including the final beneficiaries;
• Present documents that prove the legal origin of the funds invested;
• Prepare a detailed business plan with financial projections;
• Set up compliance policies, anti-money laundering controls, and personal data protection rules (according to LGPD – the Brazilian Data Protection Law);
• Choose the right tax regime for the company’s size and activity;
• Implement a reliable accounting system and regular fiscal structure.

Even companies that offer services not directly regulated by the Central Bank (like credit scoring platforms, financial marketplaces, or data aggregators) must still follow Brazilian tax, labor, contract, and data protection rules carefully.

5. What can go wrong if the operation is not properly structured?

Starting a business without following the local law is a common mistake — and it can be expensive. Companies that operate without authorization may face administrative penalties, fines, and can even be banned from doing business in the country.

Also, not having a good accounting and tax structure can cause problems like tax evasion charges, frozen bank accounts, or difficulties in raising funds from local institutional investors. Finally, there is a reputation risk: clients and business partners usually don’t trust operations that are not formally structured in Brazil, which can make it harder to grow.

6. Conclusion

If you have a fintech abroad and want to operate in Brazil safely and legally, the best way is to create a Brazilian company, register the foreign investment with the Central Bank, and, when needed, apply for regulatory authorization for the services you will offer.Each business model needs a specific legal analysis, from the right company type to the best tax option, and professional support in legal, accounting, and regulatory matters is key to make sure your expansion to Brazil happens without risks or surprises. Entering the Brazilian market is a strategic move that can bring a lot of value if done with planning and in line with the local rules.

Written by Benny Maganha