BRAZIL: BCB Starts to License Foreign Participation in the Brazilian Financial System

Friday November 1 2019

The Presidential Decree (No. 10,029 – September 26, 2019) authorises the Banco Central do Brasil to recognise the government’s interest in establishing branches of foreign financial institutions in Brazil and increasing foreign equity participation in Brazilian financial institutions without the need for further presidential authorisation.

The new Decree aims to give foreign investors equal treatment with domestic investors, by establishing that—provided the compliance with regulation issued by the National Monetary Council (CMN) and BCB—the increase of participation of foreign capital from individuals and legal entities domiciled abroad may be authorized by the BCB itself.

Prior to the decree there was a requirement for express approval of international treaties or the issuance of presidential decrees recognising that investments were in the government’s interest, pursuant to Article 52 of the Transitory Constitutional Provisions Act of the Constitution 1988 (ADCT).

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