Investing from Brazil

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Flag of Brazil.svg This article contains details specific to investors in Brazil. However, it does not apply to residents of Brazil who are also United States (US) citizens or US permanent residents.
São Paulo Stock Exchange Building

Investing from Brazil provides information for investors domiciled in Brazil who wish to apply the Bogleheads® investment philosophy. There is a series of peculiarities you must be aware of. This article introduces some of them.

In particular, the choice from the investing options available are not entirely advantageous to the use of a Boglehead and a DIY approach. The costs of funds including exchange-traded funds (ETFs) and the range of funds available to Brazil tax domiciled residents are significant issues that should be carefully researched and understood before committing to any purchases. Please ask portfolio questions in the Bogleheads non-US investing forum and contact a professional advisor before acting on them.

Considerations for investing from Brazil

Generally, investing in an emerging market such as Brazil is somewhat different than investing in US. The publication "X-ray of the Brazilian investor" gives an excellent background to the world of saving and investing in Brazil.[1]

There are numerous constraints to a Boglehead investing approach from Brazil. However, in recent years there have been some positive changes. Online investing has become more accessible, and government regulations have allowed easier access. In addition, new players in the market such as XP Investimentos have succeeded in providing a good alternative to the traditional entry points. Notwithstanding these developments, difficulties remain and here below are mentioned some of those constraints:

Conservative investment culture

Despite lower yields in comparison to other investments, saving accounts remain the favorite option among Brazilians holding some money. According to a survey by the National Confederation of Store Managers (CNDL) and the Credit Protection Service (SPC Brazil), this is the case for 65% of people. In addition it is worth noting that only 20% of people actually manage to save.[2] The survey went on to state that investments in private pension accounts totaled for 7% of mentions, while investment funds, bank deposit certificates and federal government bonds accounted for 5%, 4% and 4%, respectively.

The second most common form of saving among Brazilians is to leave money at home, reported by 25% of respondents

Brazilians’ high usage of savings accounts and the high share of assets under management (AUM) invested in fixed income products places it on the conservative end of the investment spectrum, especially when compared to other emerging markets.

Although investors in Brazil are somewhat conservative the number of investors registered in the stock exchange is increasing rapidly with year on year growth of nearly 50%. In 2018 there were 800,000 individual accounts registered in the stock exchange and that figure has increased in the meantime to 2,500,000 today (August 2020). The advent of lower interest rates has increased the number of people seeking returns off riskier assets including stocks and hedge funds.


Brazil's financial and equities markets association Anbima said fees at some major fixed income funds run by the country's five largest banks were in the 2% range.

Funds pay 0.25% fee to the stock market Bovespa.

Transaction costs in Brazil are slowly trending downwards. Some asset managers charge 0% fees however hidden costs are not always presented in a transparent manner including the practice of the brokers being paid directly by the funds. Day traders can receive incentives on fees for frequency of trading.

For iShares, ETF expense ratios range from 0.2% to 0.5%, fund expense ratios range from 0.065% to 0.90%.

Access to the markets

The regulations on investing for private individuals is not supportive in following a low cost passive index approach, due to the lack of cheap platforms combined with the lack of low fee ETFs or mutual funds covering a range of diverse indices. This is clearly illustrated by the limited offering of iShares that is confined to a grand total of five ETFs covering the Latin American market and the S&P 500 only. Until the regulations allow for the use of cheap non-advisory platforms and access to diverse and competitive ETF products, a Boglehead approach is difficult to achieve.

In addition the lack of access to bond ETFs has restricted retail access to fixed income, however some players are now beginning to offer fixed income ETFs.

Notwithstanding the lack of choice for investors the number of independent asset managers has been increasing of late, including digital platforms such as those provided by:

  • XP
  • BTG
  • Occam

Range of products available

Regulations in Brazil prevent the marketing of a global diverse range of funds. In order to construct a complete globally diverse portfolio, investors will need to take a particular course of action to access the widest geographical coverage.


As of 2020, inflation in Brazil is 2.3%.[3] In 2019, inflation was 4.3%. Inflation has been an historic problem for the Brazilian economy.

The central bank has reduced the internal rate to 2% in 2020.

The high interest rates provided by banks for deposit accounts may encourage people to shy away from alternatives when combined with the lack of investment choices.

Investment options in Brazil


The investment options in Brazil cover the same range of assets as developed nations, with cash accounts, CDs and stocks, equity funds, bonds, bond funds, REITs, and commodities. The market has been developing progressively over the last ten years, however it is still not as efficient for the retail investor as more developed markets (see the constraints section above).

Many options that do not include investing abroad would be limited to "Investidores Qualificados" (qualified investors) see definition of investor categories below.

There is a large number of mutual funds; however, due to the system of creating funds for individual investors, the number of funds is exaggerated in comparison to the value of the same assets under management.[4]

Investor categories

The regulations in Brazil classify three categories of investor with varying degrees of risk access and protection, the local commission entitled Board of the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) decreed:

  • Ordinary investor (public geral)
  • Qualified investor (investidor qualificado) those considered qualified investors include the following entities: (i) financial institutions; (ii) insurance companies and capitalization societies; (iii) private welfare opened or closed capital organizations; (iv) individuals or legal entities that hold financial investments in an amount superior to R$1,000,000 and that additionally attest in writing their qualified investor condition according to an own term. (vi) portfolio administrators and securities consultants authorized by CVM in relation to their own monies; and (vii) own social security regimes instated by the Federal Government (the Union), the States, the Federal District or the Municipalities.[5]
  • Professional investor (investidor professional) when they hold financial investments exceeding R$ 10 million.


The main banks in Brazil are:

  • Itau Unibanco SA ITUB4.SA
  • Banco do Brasil SA BBAS3.SA
  • Banco Bradesco BBDC4.SA
  • Santander Brasil SANB11.SA
  • Caixa Economica Federal (state-owned)

Main bank account types

The major local banks have the usual range of bank accounts including:

  • Savings account with zero or low fees for small payments, deposits, recharging mobile phones,
  • Current account that allows the client to access other bank services such credit cards and investments
  • Salary account that can receive salary, pensions and savings


The more or less equivalent of cash is an account called "Poupança", a type of saving account that yields a fixed amount per month. This return is obligatory by law, however the formula for calculation of the return has been softened and complicated in 2018 to allow for the more recent movement downwards in interest rates, the current rate is 1.4% pa (comment as of August 2020). There is no tax on the returns.

Fixed income

Bonds funds

  • CDB: The CDB is a fixed income security issued by the main banks, with the promise of principal payment plus the agreed remuneration, which can be at preset rates, a percentage of the CDI or price indices (IPCA and IGP-M).
  • LCA: The LCA is a funding security issued by the main banks with financial backing in funding granted to farmers or cooperatives. It can be remunerated by pre-fixed interest rate, percentage of the CDI or price indices. It is exempt from IOF (Tax on Financial Transactions) and Income Tax (IR) only in the case of individuals, in addition to the guarantee of the Credit Guarantee Fund (FGC).
  • LCI: LCI is a funding security issued by the main banks, with financial backing in credit operations guaranteed by mortgage or fiduciary assignment of real estate. The LCI may be remunerated by pre-fixed interest rate, percentage of the CDI or the price index (IPCA and IGP-M). It is exempt from IOF (Tax on Financial Transactions) and Income Tax (IR) only in the case of individuals, in addition to the guarantee of the Credit Guarantee Fund (FGC).

Tesouro Direto

In Brazil there is a product somewhat similar to Treasury Direct. In Brazil it is called "Tesouro Direto".[note 1] The IPCA ones yielding currently (August 2020) 2.4% over the bank rate and are the equivalent of TIPS. They have a cost of at least 0.3% per year and are taxed at 15% rate. There are various versions of Tesouro Direto relating to the bond duration periods which range from 2.5 years to 50 years.

First fixed income ETF

In 2018 Mirae Asset Global Investments launched the Mirae Asset Renda Fixa Pré Fundo de Índice (FIXA11 BZ) on B3, Brazil’s main stock exchange located in Sao Paulo. This is the first Brazil based fixed income ETF. The fund tracks the S&P/B3 Fixed Income Index.

iShares fixed income

iShares has a number of bond funds available to domestic investors in Brazil. These funds are actively managed, are domiciled in Brazil, and have certain restrictions. For example, for BlackRock Global Bond Income Master FIM IE:

Minimum Investment R$1,000,000
Minimum Additional Investment R$5,000
Minimum Stay Amount R$500,000

The expense ratio is particularly low at 0.065%.


Individual stock picking

The main Brazilian index Ibovespa (IBOV) contains only 82 stocks.[6]

In addition 85% of capitalization is made of only 75 stocks.

The small cap index (with the bottom 15%) has only 55 stocks in it. There are a few hundred micro cap stocks that trade very thinly, with less than 1 trade per month and 10-15% spreads.

Two "giga" stocks dominates 30% of the Ibov index. These are "Petrobras", and "Vale do Rio Doce".

Stock funds

Funds are available that bundle stocks into Latin American stocks and US stocks. These are available from banks, XP Investimentos, iShares and others.

Until more recently most stock funds (FIAs), with high fees and earn outs, available to retail investors in Brazil tended to be actively managed. These included funds such as: Dynamo, Alaska, IP Capital, Brasil Capital, Constellation, and BTG Absoluto.


Fundos imobiliários Cadastrados (FII) or REITs (Real estate investment trusts) have had large inflows in the past few years (as of August 2020). The REITs can be structured around different sectoral bases. REITs pay no tax on dividends.

As of 2020, yield (based only on dividends, not total return) on many funds is around 8.5% even after a 30% runup last year. Fundsexplorer publishes a list of FIIs.[7]


Hedge funds

Hedge funds are recently becoming popular with retail investors as a means to diversify their investments and to chase additional returns (with the increasing risks attached). In addition many new hedge funds have been formed in the recent past. Retail investors can now be a sizeable proportion of some hedge funds investment base. Some of the banks also sell "funds of funds" that include an allocation to hedge funds. Costs for hedge funds can be high at a 2% + 20% fee model.


Taxes payable by individuals include personal income tax, social security tax and gift and inheritance tax.[8]

Brazilian resident individuals are taxable on their worldwide earnings, as well as gains on the disposal of worldwide assets and rights.

Resident for tax purposes

An individual is resident in Brazil where they:

  • have a habitual residence in Brazil;
  • work for a Brazilian government department or agency outside Brazil;
  • enter Brazil under a permanent visa; or
  • enter Brazil under a temporary visa to work and remain in Brazil for more than 184 days within a 12-month period.

The personal income tax rate is effective at rates from 0% up to 27.5 percent in increments. (The standard corporate rate is 15 percent, but other taxes, including a financial transactions tax, make the effective rate 34 percent.)

Non resident for tax purposes

The following individuals are considered non-residents for Brazilian income tax purposes:

  • Brazilians living abroad, as of the date of departure (if the exit process has been filed).
  • Brazilians living abroad, after 12 months of departure (if the exit process has not been filed).
  • Foreign nationals holding temporary visas without an employment contract with a Brazilian entity, during their first 183 days of actual physical presence in Brazil (consecutive or not) within a 12-months period.

Payment of taxes

Resident taxpayers are subject to pay income tax in Brazil on their worldwide income, on a monthly cash basis.

Resident taxpayers are required to pay monthly income tax (a process called "Carnê-Leão") on their income that was not subject to withholding tax by other local source. Generally, it means offshore income and rental income received from other individuals. This tax is also calculated based on a progressive tax table that has a number of rates: 0 percent, 7.5 percent, 15 percent, 22.5 percent and 27.5 percent. The payment has to be effected up to the last business day of the following month.

Fixed income

Bond funds are taxed from 15% to 22.5%, depending how long you keep them.


Stock funds are taxed at 15%. (Note that day trading stock returns are taxed at 20%).

If you own stocks and sell less than R$20,000[note 2] per month you pay no tax on the appreciation.

Gains from sale of equities

Capital gains on the sale of stock sold on a Brazilian stock exchange are exempt from tax if the proceeds from the sale are less than R$20,000 on a monthly basis. If the proceeds from the sale exceed this amount, the capital gain is subject to a flat 15% tax rate. Capital losses from the sale of stock sold on a Brazilian stock exchange may be used to offset capital gains on a monthly basis. Any unused losses may be carried forward to future months and future years.

Capital gains from stock sold on a non Brazilian stock exchange are subject to a flat tax rate of 15% if the proceeds from the sale exceed R$35,000. Capital losses from such sales may not be used to offset capital gains.

The corresponding tax on all capital gains must be paid by the last day of the month following the month of the sale.


Brazil follows a dividend exemption system. Amounts distributed to shareholders resident in Brazil or abroad (since the investment is registered at the Brazilian Central Bank (BCB)) are not subject to withholding tax. There is no dividend distribution, everything is always reinvested. Stock dividends pay no tax.

(Note that gains from the sale of stock or personal property outside of Brazil that was acquired prior to becoming a resident of Brazil is not taxable).

Tax losses carried forward

Tax losses can be carried forward to offset against future profits up to 30% of the real profits arising in each period (year). Losses that are offset may be carried forward indefinitely. There are restrictions on losses transferred as a result of a company merger or where there is a change in the control and activity of the loss generating company

Treaty and non treaty withholding rates

The overall rate of withholding tax at source used in the remittance of interest and royalties is 15%, except for Japan with a rate of 12.5%. There is no tax on the remittance of dividends. Any remittances to tax haven countries (blacklist) are subject to withholding tax at the rate of 25%.

Brazil has signed treaties to avoid double taxation with several countries,[9] including:

Argentina, Austria, Belgium, Canada, Chile, People's Republic of China, Czech Republic, Denmark, Ecuador, Finland, France, Hungary, India, Italy, Israel, Japan, Luxembourg, Mexico, Netherlands, Norway, Peru, Philippines, Portugal, Slovakia, Spain, Sweden, South Africa, Venezuela, Trinidad and Tobago, Turkey, and Ukraine.

General deductions from income allowed in Brazil

General deductions allowable to taxpayers as of 2020:[10]

  • Resident taxpayers are entitled to claim dependants as a deduction.
  • Payments of alimony and child support by the taxpayer pursuant to a Brazilian court decision are deductible for tax purposes by the taxpayer and must be included in taxable income by the recipient.
  • Employee contributions to the social security system withheld from salary and wages by the employer on a monthly basis are deductible in determining the monthly tax assessment and on the annual tax return.
  • Amounts paid by the taxpayer to Brazilian domiciled private pension plans are deductible for purposes of the monthly tax calculation and on the annual income tax return, limited to 12 percent of gross income.
  • Un-reimbursed medical expenses incurred by the taxpayer on their own behalf or in respect of treatment received by a dependent are deductible on the annual income tax return.
  • Pension income from Brazilian government plans received by individuals 65 years of age or older is not taxable up to a prescribed limit. (The limit as of 2020 is R$1,903.98 per month).
  • Education expenses for the taxpayer or their dependants are deductible up to a prescribed amount. (As of 2020, the annual limit is R$3,561.50 per student).

Fund taxation

Income from open ended funds is taxable every six months ("come-cota") at the rates of 15% or 20% depending upon the length of the fund life being classified as a long or short term investment fund. Income accrued since 1st January will become taxable but any realised or unrealised capital gains earned by the fund to date will become taxable on 31st May as if such gains were distributed to the fund investors.

Closed end fund income is taxed on withdrawal.

Real estate funds, credit right funds and equity funds have been waived from periodical taxation and therefore income earned from these funds will only be taxable upon distribution to the fund investors.

Offshore fund location

There is a difference in tax treatment:

A) Investing through Personal Account: when you sell shares, stocks/ETFs, or mutual funds, you pay capital gains - 15% of profit (but you are exempt for capital gains less than R$25,000/month).

B) Investing through tax haven company (Cayman Islands, British Virgin Islands): the investor can send the money back to their personal account in three ways:

  • Decrease of capital: tax on foreign exchange rate gains only.
  • Distributions: usually 27.5% on dividends.
  • Selling shares of company: 15% on capital gains.

Note: there is no tax treaty between Brazil and the USA. This means that the application of estate tax on death on amounts invested in US situs assets over $60,000 may be as high as 40%. In addition US domiciled equity investment fund dividend payments will be subject to a 30% tax rate. See text below on investing via an offshore domicile in the tax section. Tax advice should be obtained for anyone investing offshore in US domiciled assets.


Fees for investing in Brazil can be frustratingly high for many products, although this has been improving with the newer players such as XPi and others.

Fees can be reduced significantly where the Brazilian investor invests abroad. Investing via the USA is normally the easiest, especially with brokerages like Avenue that focus on Brazilians. Management of tax matters related to offshore funds has to be taken into account.

While a 2% expense ratio might be considered far too high for non-Brazilian investors, there might be situations where funds that look expensive elsewhere could be a good idea. One example could be PGBL retirement funds,[11] that could be used in a similar way to a 401k from the US to have tax-deferred investments.

Fixed income

Bond fund general costs are in the range of 0.7-3.5% per year.


Stock funds

Brazil equity funds are mutual funds that focus on equities domiciled in the nation of Brazil and its various republics and the wider latin American market. Brazil is considered an emerging market. The funds cover a wide range of Brazilian stocks and can be indexed or actively managed.

Most stock funds costs up to 2% per year on assets under management and often include a 20% performance fee above certain profit levels.


Stock exchange and trading costs

Buying assets and derivatives is not only about paying for each share. There are various fees and taxes that can be charged, related either to the brokers, the government, or the stock exchange itself. If you are planning to enter the Brazilian stock market, prepare to afford the costs below.

Custody fee

The safe custody fee is charged by the stock broker over the maintenance of the assets under their care, covering operational costs. Some Brazilian brokers prefer not to charge this fee if the client realizes a certain number of operations per month. This fee might be:

  • Fixed - charged every month, independently from the number of operations realized or assets owned. Usually varies from BRL 6 to BRL 50, according to each broker.
  • Variable - calculated on top of the shares under the broker's care, generating a percentage that must be paid monthly. This percentage is, usually, not bigger than 0.015% per month.
Brokerage fee

This fee is charged by brokers based on each operation made, either on the purchase or selling of shares. The stipulated fee or rate may vary according to the type of market, operation, and tools offered by each broker, and even if the operation is made via home broker or trading desk. The fee can be:

  • Fixed - used mainly when the operations are made via home broker - online - and can be more advantageous if a large investment is made.
  • Variable - usually follows the Bovespa Chart, where brokerage fees are listed according to the value of the operations made. It can be more advantageous for smaller investments, since applications up to BRL 135, for example, have a fee of BRL 2.70.

This category involves several fees and corresponds to rates charged for each operation by BM&F Bovespa and the Brazilian Company of Settlement and Custody, which acronym is CBLC.

These fees vary a lot, according to factors like operation type, profile of the investor, and value of the operation. Since an average would be too inaccurate, the best thing to do is to check the BM&F Bovespa chart.

The main fees and their equivalents in Portuguese are:

  • Negotiation Fee (taxa de negociação)
  • Settlement Fee (taxa de liquidação)
  • Registration Fee (taxa de registro)
Single stock funds

Single stock funds costs 1.5% per year. (The fund invests in only 1 stock and charges 1.5% per year). There are some iShares ETFs with 0.69-0.79% cost. There is an index ETF called PIBB that costs 0.0059% per year, which is probably the cheapest fund in the world.

Access to assets

Bolsa Balcao

Brazil’s primary stock market, the Brasil Bolsa Balcão S.A, often referred to as B3, was formed in March of 2017 after CETIP S.A. merged with the BM&FBOVESPA, following previous mergers with other exchanges.

The B3 is located in Sao Paulo, Brazil, but also has offices in Rio de Janeiro, London and Shanghai, is the largest stock exchange in Latin America by market capitalisation. It is also the 18th largest stock exchange globally by its market cap of about $520.29 billion in 2019.

In addition to having a listing service for stocks, it deals in stock derivatives like futures, forwards and options, and Securities Deposit Certificates (UNITS).

The B3 trades in commodities of local importance, interest rates, various exchange rates and fixed income products. The exchange allows trading in Brazilian Depositary Receipts (BDRs) that consist of certificates of shares in foreign companies that are traded in Brazil.

The B3’s main benchmark stock index is the IBOVESPA that has been calculated since 1968 as the total return index made up of the market’s most representative companies by market capitalisation and volume traded. The IBRX 50, also known as the Brazil 50, consists of the 50 most traded stocks on the B3, while the IBRX includes the 100 most traded B3 listed stocks.


Until more recently investors would approach their bank to discuss savings and potential investments. These banks offered various products, including cash accounts, bond funds and stock brokerage services. The potential client would usually open an poupança account or invest via the bank that would have charged: 1%, 2% and up to even 3% fees in bonds funds (it is worth remembering that Brazil used to have very high inflation and as a consequence higher yields). These funds include the following (see above for more details on fund types):

  • CDB
  • LCA
  • LCI

In recent years as the market has opened up to new players such as XP Investimentos, the banks have had to reduce their fees somewhat and to offer better products.

These banks include:

Besides iShares (Blackrock), as of 2020 the big banks (Bradesco and Itaú) have recently launched some ETFs.

The Itaú brand for ETFs is Itnow.


Wealth management

The main high street banks in Brazil generally have sections that provide wealth management services. There are also investments banks which cater for private clients, such as BTG.


iShares has a presence in Brazil and have a small number of products available. These funds are for Latin America or the US equities exclusively. There are five ETFs and eight other funds. All of these products are domiciled in Brazil:

iShares ETFs
Ticker Name Expense ratio %
BOVA11 iShares Ibovespa Fundo de Índice 0.30
SMAL11 iShares BM&FBOVESPA Small Cap Fundo de Índice 0.50
IVVB11 iShares S&P 500 FI em Cotas de Fundo de Índice 0.23
BRAX11 iShares IBrX-Índice Brasil (IBrX-100) Fundo de Índice 0.20
ECOO11 iShares Índice Carbono Eficiente (ICO2) Brasil Fundo de Índice 0.38
iShares funds
Ticker Name Expense ratio %
BLKSTYF BlackRock Style Advantage FIC de FIM IE 0.715
BLKSTYM BlackRock Style Advantage Master FIM IE 0.065
BLKDHIF BlackRock Dynamic High Income FIC de FIM IE 0.900
BLKGBIM BlackRock Global Bond Income Master FIM IE 0.065
BLKDHIM BlackRock Dynamic High Income Master FIM IE 0.065
BLKGBIF BlackRock Global Bond Income FIC de FIM IE 0.800
BLKGEDF BlackRock Global Event Driven FIC de FIM IE 0.900
BLKGEDM BlackRock Global Event Driven Master FIM IE 0.065

The latter iShares funds appear to be actively managed funds with diverse asset classes and relatively high expense ratios.


Vanguard have no presence in Brazil for retail investors.

Alternative strategies are required in order to access a globally diversified portfolio of equities.

XP Investimentos

XP Investimentos is an online platform that provides access to stocks and funds.

Offshore investment location

Some Brazilians open a personal account in Interactive Brokers in order to access global equities.

Alternatively, they can incorporate an BVI/Bahamas/Cayman´s company to invest in global markets. The main motivation to open an BVI company is to avoid the onerous US estate tax whereby investments in 'US situs' assets over $60,000 are subject to a high estate tax. The offshore company has to be declared to the Central Bank using a CBE annual declaration.

In addition there is the benefit of 0% of capital gains on selling stock shares of ETFs. However should the Brazilian investor decide to repatriate money from the offshore company back to Brazil they will have to pay 27.5% on the offshore company dividends (Brazilian tax), instead of paying 15% on capital gains.

Pension system

The Brazilian pension system is structured in three pillars:[12]

  • A public, mandatory, pay-as-you-go system known as general social security regime (RGPS);
  • The Pension Regimes for Government Workers (RPPS);
  • The Private Pension Regime (RPC) - Occupational and Individual plans.

The Brazilian pension system has been subject to a series of ongoing reforms undertaken since the late 1990s. The need for reforms stemmed primarily from an overgenerous pension system that placed heavy pressure on the governmental budget.

Public pensions

In Brazil, the 1st pillar consists of two schemes. The so-called Regime Geral de Previdência Social (RGPS), the general regime of social security, covers the private-sector workforce. It is financed through payroll taxes (shared by the employer and the employee), revenues from sales taxes, and federal transfers that cover shortfalls of the system.

Private-sector employees are entitled to retire with a full pension at age 65 for men and 60 for women if they have a contribution record of at least 15 years. Alternatively, it is possible to retire after having contributed to social security for 35 years for men and 30 years for women, irrespective of the retiree's age.

Public-sector employees are covered by multiple special pension regimes at different governmental levels pooled to the Regimes Próprios de Previdência Social (RPPS). Municipal, federal and state entities manage their own schemes for their employees, but are jointly coordinated by the Ministry of Pensions and Social Assistance. In general, these pension plans are financed on a pay-as-you-go basis with the employee paying a percentage of their salary. The percentage varies depending on the public entity.

Voluntary pensions plans

Complementary pensions have a long history in Brazil and the county has the oldest system in Latin America. Under the Regime de Previdência Complementar (RPC), both occupational and personal pensions are provided on a voluntary basis. Two pension vehicles exist that can be used to finance private pension benefits.

Tax treatment of contributions and benefits

In general, contributions to private pension plans are tax-deductible up to certain limits for both the employee and the employer. Pension benefits are taxed as ordinary income.

Investment regulation

Quantitative investment restrictions apply to pension assets as follows:

  • Low credit risk bonds are limited to 80%; this limit decreases with increasing credit risk
  • Listed stocks are limited to 50%
  • Private equity is limited to 20%
  • Real estate was limited to 10%, decreased to 8% in 2009
  • One single company must not exceed 20% of the company's capital, and only up to 5% of the pension fund assets may be invested in any one single company.


  1. You can check the rates here: Ministério da Economia, Tesouro Nacional.
  2. The Brazilian currency, the Real, is denoted by R$, as in R$1,000.

See also


  1. "X-ray of the Brazilian investor". Anbima. November 2019. Retrieved July 28, 2020.
  2. Xiu Ling (June 18, 2019). "65 Percent of Brazilians Saving Money Choose Savings Accounts". The Rio Times. Retrieved July 28, 2020.
  3. "Hyperflation in Brazil". Wikipedia. Retrieved July 27, 2020.
  4. "The Growth and Size of the Brazilian Mutual Fund Industry". March 2010. Retrieved March 9, 2021.
  5. "Different Categories Of Investors Admitted In The Brazilian Securities Market". December 2014. Retrieved March 9, 2021.
  6. "Bovespa Index". Ibovespa. Retrieved July 27, 2020.
  7. "List of FII funds". Fundsexplorer. Retrieved July 27, 2020.
  8. "Brazil individual taxes on personal income". PwC. Retrieved July 27, 2020.
  9. "Brazil Individual - Foreign tax relief and tax treaties". PwC. Retrieved July 28, 2020.
  10. "KPMG taxation guide". KPMG. Retrieved July 27, 2020.
  11. "PGBL/VGBL: An Option For Financial And Succession Planning". Candido Martins Advogados. October 10, 2017. Retrieved August 1, 2020.
  12. "Brazil Pension System" (PDF). ABRAPP. Retrieved July 27, 2020.

External links