As of October 1, 2026, non-resident legal entities that hold a direct equity interest (foreign direct investment, or “FDI”; in Brazil,
investimento estrangeiro direto, or “IED”) in companies domiciled in Brazil will be permitted to open and maintain foreign-currency deposit accounts in Brazil. This new possibility arises from
Resolution BCB No. 575/2026, which added this category to Brazil’s foreign-exchange regulations (Resolution BCB No. 277/2022).
The measure is part of the modernization of the Brazilian foreign-exchange market carried out under Law No. 14,286/2021 (the new foreign-exchange framework) and is of direct interest to multinational groups that control Brazilian subsidiaries. The period until October was granted so that banks authorized to operate in the foreign-exchange market can adapt their systems. Below, we summarize what changes in practice for these investors: how to open and operate the account, what it does and does not allow, and when it is worth adopting.
Who may open the account, and what is required to start?
The account is intended for the direct foreign investor: the non-resident legal entity that holds a permanent, controlling equity interest in a Brazilian company, acquired outside the stock exchange. It does not overlap with portfolio investment, which is subject to its own regime in the capital markets.
In practice, two conditions govern the opening of the account:
- A current investment registration. The investor must keep its FDI duly registered and updated with the Central Bank of Brazil (Banco Central do Brasil). Without a registration in good standing, there is no account: the regularity of foreign capital is the gateway.
- A relationship with a foreign-exchange-authorized bank. The account will be opened and maintained at an institution licensed to operate in the foreign-exchange market, which will conduct the know-your-customer process for the non-resident client, including corporate documentation, local representation, and anti-money-laundering routines.
It is worth noting that, until the rule takes effect, there is no off-the-shelf product for this profile: banks are still adjusting their systems, and it will be necessary to monitor which institutions will actually offer the account as of October.
How do funds move in and out of the account?
The account is purpose-restricted, not a general-purpose account. The funds flowing through it must relate to the investment and, where applicable, to the group’s own cross-border loan operations. In practice, this shapes the following functioning:
- What may fund and be paid from the account: investment flows, such as dividends, interest on net equity (juros sobre o capital próprio, or “JCP”), and returns of capital, in addition to funds earmarked for future capital contributions.
- Foreign-currency movements without a foreign-exchange contract: transferring foreign currency to and from these accounts, and even converting between foreign currencies (for example, from U.S. dollars to euros), no longer requires a foreign-exchange contract. This is the main operational gain.
- Conversion into reais requires a foreign-exchange contract: converting the balance into Brazilian reais (BRL) still requires a foreign-exchange transaction, with the applicable spread and the financial transactions tax (Imposto sobre Operações Financeiras, or “IOF”). The account allows the investor to retain foreign currency, but does not eliminate the cost of converting it when necessary.
- What is not permitted: using foreign currency for payments within Brazilian territory, where the real remains legal tender, as well as cash deposits and withdrawals and the use of checks.
In addition, institutions maintaining these accounts will report balances and transactions to the Central Bank on a monthly basis. The account therefore operates within an environment of transparency and control.
What are the practical advantages?
For a foreign controlling shareholder, the gains relate to foreign-exchange efficiency and cash management:
- No “round-trip” conversion on repatriation. Dividends, JCP, and returns of capital may be received and held in foreign currency, without forced conversion at each step.
- A natural hedge. Holding funds in the investor’s functional currency reduces foreign-exchange exposure on amounts awaiting deployment, whether reinvestment, a new contribution, or remittance.
- Foreign currency circulating without a foreign-exchange contract. Transfers between foreign-currency accounts and conversions between foreign currencies no longer depend on a foreign-exchange contract.
- Timing and treasury. The investor gains flexibility to choose when to convert or remit, to fund future contributions, and to centralize the group’s cross-border cash management in a single place.
In our view, the central benefit is to eliminate the classic inefficiency in which funds enter as foreign currency, are converted into reais, and are later reconverted for remittance abroad, incurring a spread and a tax at each step.
What are the disadvantages and the cost?
The instrument has narrow contours, which we set out candidly:
- Available only as of October 2026, and still dependent on banks bringing the account into operation.
- Rigid purpose: because it is tied to the investment, the account does not serve as the investor’s general foreign-currency wallet.
- The relevant cost is not maintenance; it is the foreign exchange. For a corporate client, the account fee tends to be low or negotiated; the real economic cost arises on conversions into reais, measured by the Effective Total Value (Valor Efetivo Total, or “VET”), which combines the exchange rate, the IOF, and fees. The account’s savings come precisely from reducing the frequency of those conversions.
- Ongoing compliance: keeping the investment registration updated and observing the foreign-capital rules is a permanent condition, not merely one for opening.
The account is a foreign-exchange and operational tool, and does not change the taxation of the underlying flows. Dividends, JCP, and any capital gain on the disposal of the interest remain subject to their own regimes. It is not, therefore, a tax-planning instrument, but rather a means of rationalizing flows and foreign-exchange risk.
It follows that the decision is one of cost-benefit. For groups with periodic repatriation of dividends or JCP and with foreign-currency contributions or debt, the new account tends to simplify cross-border cash management. For structures with occasional flows, the benefit may not outweigh the costs of opening and compliance.
We are monitoring the regulation and its operational rollout, including the actual availability of the account by foreign-exchange-authorized institutions. We remain available to discuss the practical impacts of this measure on each group’s operations.
MILANEZ VILLELA ADVOGADOS 