Law No. 13.874, of 09.20.2019, better known as the “Economic Freedom Law” establishes free market guarantees, less bureaucracy, and encouragement to entrepreneurship in Brazil, giving more freedom to Brazilian entrepreneurs and to foreign entrepreneurs and investors who seek to develop business in the country.

This law implemented one of the most relevant changes in the Brazilian corporate legislation since the publication of the Brazilian Civil Code, in 2002: the creation of the single-member limited liability company, removing the legal obligation of a plurality of quota holders. In other words, the Civil Code was amended to allow limited liability companies to have a sole quota holder (Article 1.052, paragraph 1º), regardless if such quota holder is an individual or a legal entity.

The single-member limited liability company has some differences in comparison to the individual-entrepreneur limited liability company (EIRELI), which may represent an advantage to the sole quota holder. Unlike the EIRELI, there is no requirement for minimum paid-in capital nor restriction for holding quotas of more than one single-member limited liability company, being these essential factors for the feasibility of new businesses.

Also, this is a simpler and less expensive option for foreigners interested in doing business in Brazil without necessarily associating with another partner.

The teams of Fraga, Bekierman & Cristiano Advogados are at your disposal to clarify any questions about the points above and provide the necessary assistance.