Choosing the right legal structure is one of the most consequential decisions you will make when starting a business in Brazil. The entity type you select determines your tax obligations, liability exposure, operational flexibility, and even your ability to take on partners or investors. This guide breaks down every major company type available in Brazil so you can make an informed choice.

Overview of Business Entity Types

Brazil offers several distinct legal structures, each designed for different business sizes and ownership models. Here is a high-level comparison before we dive into the details:

Entity Type	Revenue Limit	Min. Partners	Foreign Ownership	Liability
MEI	R$ 81,000/year	1	Not allowed	Unlimited
ME	R$ 360,000/year	1+	Allowed (LTDA/SLU)	Depends on type
EPP	R$ 4.8 million/year	1+	Allowed (LTDA/SLU)	Depends on type
EI	No limit	1	Not allowed	Unlimited
SLU	No limit	1	Allowed	Limited
LTDA	No limit	2+	Allowed	Limited
SA	No limit	2+ (min. 7 for open)	Allowed	Limited

MEI (Microempreendedor Individual)

The MEI is Brazil’s simplest business structure, created specifically for individual micro-entrepreneurs. It allows formalization with minimal bureaucracy and a single flat monthly tax payment called DAS, which ranges from approximately R$ 70 to R$ 80.

Key Characteristics

• Annual revenue capped at R$ 81,000 (approximately USD 16,000)
• May hire only one employee
• Limited to specific CNAE activity codes
• Cannot have partners or own shares in other companies
• Foreign nationals without permanent residency cannot register as MEI

Who Should Choose MEI?

The MEI is ideal for Brazilian residents running small-scale service or commerce businesses. It is generally not suitable for foreign entrepreneurs because of residency requirements and the restrictive revenue ceiling.

ME and EPP (Size Classifications)

ME (Microempresa) and EPP (Empresa de Pequeno Porte) are not legal structures themselves but rather size classifications that determine whether a company can opt into the Simples Nacional tax regime.

• ME: Annual revenue up to R$ 360,000
• EPP: Annual revenue between R$ 360,001 and R$ 4.8 million

Any company type (EI, SLU, LTDA) can be classified as ME or EPP based on its revenue. The classification matters primarily for tax purposes.

EI (Empresario Individual)

The EI is a sole proprietorship where the individual and the business are legally the same entity.

Pros and Cons

• Pro: Simple to set up, lower administrative costs
• Con: The owner has unlimited personal liability for business debts
• Con: Only available to Brazilian citizens or permanent residents
• Con: Cannot have partners

Because of the unlimited liability and residency restriction, the EI is rarely recommended for foreign entrepreneurs.

SLU (Sociedade Limitada Unipessoal)

The SLU replaced the former EIRELI structure in 2021 and is one of the most popular choices for single-owner companies in Brazil.

Key Advantages

• No minimum capital requirement (EIRELI previously required 100x the minimum wage)
• Limited liability: Personal assets are protected from business debts
• Foreign ownership allowed: With a Brazilian legal representative
• Single owner: No need to find a partner just to satisfy legal requirements

When to Choose SLU

The SLU is excellent for foreign entrepreneurs who want full control of their company without taking on a partner. You will need a Brazilian accountant and, if you are not a resident, a legal representative with a CPF.

LTDA (Sociedade Limitada)

The LTDA is Brazil’s most common business structure, similar to an LLC in the United States or a Limited Company in the UK. It requires at least two partners (socios) who share ownership according to their capital contributions.

Key Features

• Partners’ liability is limited to their capital contribution
• Flexible profit distribution arrangements
• Well-understood structure by banks, clients, and government agencies
• Foreign partners are allowed with proper documentation

LTDA vs. SLU: Which Is Better?

If you are the sole owner, choose the SLU. If you have a business partner or investor, the LTDA is the natural choice. Both offer limited liability and work well with virtual office addresses for CNPJ registration.

SA (Sociedade Anonima)

The SA is a corporation structure used primarily by larger companies or those planning to issue shares publicly.

Two Types of SA

• SA Aberta (Open): Publicly traded, regulated by the CVM (Brazilian Securities Commission), requires a minimum of 7 shareholders
• SA Fechada (Closed): Privately held, minimum 2 shareholders, less regulatory burden

When to Consider an SA

Most small and medium businesses do not need an SA. It is typically used when a company plans to raise capital through stock issuance or when the business has complex governance needs. The administrative costs and compliance requirements are significantly higher than LTDA or SLU.

Foreign Ownership Rules

Foreign entrepreneurs can own companies in Brazil, but there are important restrictions to understand:

• MEI and EI: Not available to foreigners without permanent residency
• SLU and LTDA: Open to foreigners, but a non-resident foreigner must appoint a Brazilian legal representative
• Restricted activities: Certain sectors (media, healthcare, domestic aviation) have limits on foreign participation
• Capital registration: Foreign investment must be registered with the Central Bank of Brazil through the SISBACEN system

Choosing the Right Structure: A Decision Framework

Choose MEI if:

You are a Brazilian resident with a small service business earning under R$ 81,000 per year

Choose SLU if:

You are a single owner (Brazilian or foreign) who wants limited liability without the need for partners

Choose LTDA if:

You have two or more partners, including foreign investors, and want a flexible structure with limited liability

Choose SA if:

You plan to raise capital through shares or need a corporate governance framework for a larger operation

How SedeFiscal Supports Your Company Registration

Regardless of which structure you choose, every company in Brazil needs a registered address. SedeFiscal provides fiscal addresses in Porto Alegre that meet all Receita Federal requirements, allowing you to register your SLU, LTDA, or SA without the expense of a physical office lease.

Our plans include all the documentation you need for registration: IPTU certificate, proof of address, and AVCB fire safety certificate. This means you can focus on choosing the right business structure while we handle the address requirements.

Final Considerations

Selecting a company type is not a decision to make alone. Work with a qualified Brazilian accountant (contador) who can evaluate your specific situation, including your revenue projections, number of partners, and tax optimization goals. The right structure today can save you significant time and money as your business grows in Brazil.

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