One of the topics of great interest in the field of intellectual property is the acquisition or licensing of technology, given that Brazil, as a rapidly developing country, has been continuously receiving new technologies from abroad with the aim of strengthening its economic capacity. It is through technology transfer agreements that domestic and foreign parties negotiate and regulate such interests.
A Brief History of Technology Transfer Agreements
The promotion of technology inflow into Brazil was regulated at the national level beginning in the early 1970s, when, through Law No. 5,648 of December 11, 1970, the INPI was created and designated as the public agency responsible for regulating technology transfer agreements—defined as agreements involving the licensing of industrial property rights (patent exploitation licenses, trademark use licenses, industrial design licenses, etc.) and agreements for franchising, technology supply, or specialized technical assistance.
As a result, on September 11, 1975, the newly created INPI promulgated Normative Act No. 15, adopting an extremely interventionist stance toward technology transfer agreements, which ultimately made the contractual registration processes lengthy, with requirements issued through the Institute’s own rules and interpretations.
Furthermore, technology transfer agreements could not involve consideration when entered into between related parties, given that Brazil’s Foreign Capital Law (Law No. 4,131 of September 3, 1962) prohibited the remittance of royalties from a subsidiary to its parent company abroad.
Starting in the 1990s, the Brazilian economy began to open up, increasingly allowing the entry of new technologies from developed countries. Under Article 50 of Law No. 8,383/91, it became possible to remit payments between a subsidiary and its parent company (subsidiary and parent) arising from technology transfer agreements signed, registered with the INPI, and filed with the Central Bank of Brazil (Bacen) after December 31, 1991, provided that the deductibility limits established by tax legislation were respected.
During the same decade, the rules governing the importation of technologies into Brazil were gradually relaxed with the enactment of Normative Act No. 120/93 and Law No. 9,279/96 (Industrial Property Law).
Article 211 of Law No. 9,279/96, interpreted in conjunction with tax, fiscal, and foreign capital remittance laws, led to the conclusion that technology transfer agreements should be registered with the INPI for the following purposes: (i) to enable the remittance of payments abroad, provided that foreign exchange and tax rules are observed; (ii) to allow these payments to be tax-deductible, provided that tax laws are complied with; and (iii) to be enforceable against third parties.
It is important to note, in this regard, that even with the enactment of the Industrial Property Law, the INPI continued—and, to a certain extent, continues—to interfere with the parties’ autonomy during the registration process for technology transfer agreements, particularly with regard to the prior assessment of compliance with tax laws and regulations governing the remittance of capital abroad, as well as to the establishment of certain specific contractual conditions, often to the detriment of what is stipulated by law.
However, over time, the INPI gradually adopted an increasingly less interventionist stance in the review of technology transfer agreements. Thus, with the aim of further modernizing the industrial property system in Brazil, as well as limiting the Institute’s interference in contracts submitted for registration, Normative Instruction No. 70 was issued in 2017 and has been in effect since July 1, 2017.
Through Normative Instruction No. 70/2017, the INPI indicated that it would no longer conduct tax assessments of technology transfer agreements submitted for registration; since then, Certificates of Registration have reflected only the amount and term declared by the parties, with the contracting parties remaining responsible for the validity and legality of the contract and payment remittances.
Subsequently, on July 7, 2017, the INPI issued Resolution INPI/PR No. 199, which established new guidelines for the examination of technology transfer and the registration of integrated circuit topographies, as well as technology transfer and franchise agreements, which are subject to registration or annotation with the Institute.
In general terms, this Resolution set forth the rules, formalities, and documents underlying applications for annotation or registration, detailing how the formal and technical examinations of the contracts will proceed. If the guidelines established by the Resolution are not followed, the application for annotation may be subject to formal and technical requirements, which may even result in the rejection and/or dismissal of the application.
Resolution INPI/PR 199/2017 supplemented Normative Instruction No. 70/2017, which limited the INPI’s power to intervene and removed from its scope of authority the tax and foreign exchange analysis of contracts submitted for registration. In this regard, all Certificates now include the following informational note: “The INPI has not examined the Contract in light of tax, fiscal, and capital remittance laws.”
In line with these INPI rules, BACEN issued Circular No. 3,857/2017, regulating the administrative sanctioning procedure for the imposition of penalties, coercive measures, and dispute resolution methods. Thus, irregular royalty remittances became subject to the administrative sanctioning procedure.
Consequently, although the INPI no longer intervened or imposed requirements regarding the amount and payment terms of contracts, the contracting parties remained responsible for complying with the tax deductibility limits set forth in Ministry of Finance Ordinance No. 436/58, which, in the case of contracts between companies with direct or indirect equity ties, also applied to remittances abroad.
A major change came in 2021 with the enactment of Law No. 14,286/2021—the Foreign Exchange Framework Law—which introduced amendments to several other regulations. The remittance of payments abroad in the form of royalties, which previously required technology transfer agreements to be registered with the INPI and the Central Bank of Brazil, now depends solely on proof of payment of IRRF (Withholding Income Tax).
Thus, the registration of technology transfer agreements with the INPI merely made the amounts of such agreements deductible for purposes of calculating taxable income, subject to the limits and conditions established by law.
Another important development regarding technology transfer agreements was the enactment of Law No. 14,596/2023, which took effect in 2024 and introduced the application of transfer pricing rules to intangible rights and royalties. Since its enactment, the former foreign exchange and tax rules previously applied to remittances and the tax deductibility of royalty payments for intangible assets have been repealed.
Under this law, remittances of royalties and payments for technical, scientific, administrative, or similar assistance must comply with transfer pricing rules.
One of the pillars of the transfer pricing regime is the “arm’s length” principle, adopted internationally. Brazil’s adoption of this regime has harmonized the national system with OECD guidelines.
This principle establishes that transactions between related parties—especially in the context of international operations—must be conducted as if they were between independent parties, that is, under the same market conditions, without being influenced by the corporate relationship.
Thus, for international transactions involving such payments between related companies, one of the five methods (PIC, PRL, MCL, MLT, and MDL) must be adopted, with the option to select the method most appropriate for the transaction, or even other methods, provided that the alternative methodology adopted produces a result consistent with that which would be achieved in comparable transactions between unrelated parties.
General Rules Applicable to Technology Transfer in Brazil
Contracts whose purpose is the licensing of industrial property rights may be filed for registration with the INPI. The following are registrable with the INPI:
- Patent Exploitation Agreements;
- Industrial Design Exploitation Agreements;
- Trademark License Agreements;
- Contracts for the Assignment of Patents, Industrial Designs, or Trademarks;
- Technology (Know-How) Supply Agreements;
- Technical and Scientific Assistance Agreements;
- Integrated Circuit Topography License Agreements; and
- Franchise Agreements (Law 8,955/94).
The purpose of registering a technology transfer agreement with the INPI is to make it enforceable against third parties.
Technology transfer agreements will only be effective against third parties after registration with the INPI. The registration of these agreements has the following effects:
a) Guarantee of the exclusive right granted to the licensee, in the case of exclusive license agreements; and
b) It grants the licensee standing to appear as a party in legal proceedings relating to trademarks and patents, either independently or as a co-plaintiff with the licensor, if the agreement so permits.
It should be noted that, under current law, the registration of trademark or patent license agreements is not a condition for the validity of a third party’s use of the trademark or patent, provided that the owner can prove that the user has authorization to do so.
For related parties, the remittance of royalties abroad—which previously could not exceed the deductibility limits set forth in the Foreign Capital Law and Ministry of Finance Ordinance No. 436/58, which established deductibility limits ranging from 1% to 5% of net sales revenue from the contractual products—may now be freely negotiated in light of the legislative changes mentioned above; however, the deductibility limits remain in accordance with the new Transfer Pricing Rules.
We may also note that Law No. 14,596/2023 introduced an interesting change regarding contract terms. The repealed Article 12, paragraph 3, of Law No. 4,131/62 provided that, for contracts for technical and scientific assistance services and the supply of technology, the delivery and deductibility limits could not exceed a term of five (5) years, counted from the introduction of a special production process, extendable for a second period of five (5) years, provided that the need to renew the technological relationship was justified. This limitation ceased to exist with the enactment of Law No. 14,596/2023, making it possible to extend the term for periods exceeding 10 years without submitting a new contract; an amendment to the contract may be sufficient for registration with the INPI.
The current registration/filing process with the INPI is entirely digital, and there is no need to submit a physical copy of the contract or any other documents, unless expressly requested by the INPI in a formal notice; the Institute now accepts digital signatures (without the need for an ICP-Brasil certificate), in which case apostille certification or consular legalization is also not required. In all other cases, for physical signatures made outside Brazil, apostille certification or consular legalization remains required.
Although the INPI has become stricter regarding the formal aspects of contracts, the more flexible approach to contract review has led to a substantial reduction in the time required for the contract registration process, as most certificates are now issued within 2 to 3 months—half the time it took a few years ago.
Update to the Contract Registration and Filing Procedure
More recently, in August 2026, the INPI launched a new phase of modernization for the procedure for the registration and filing of contracts for the transfer of technology. On August 14, 2026, a new version of the electronic forms for the e-Contratos system went live as part of the “Program to Restructure the Process for the Filing and Registration of Technology Transfer Contracts”, as outlined in the INPI’s 2026 Action Plan. The update aims to improve and modernize the workflow for analyzing and processing contracts submitted to the Institute.
This measure is part of a broader project to restructure the process for the registration and filing of technology transfer contracts, signaling the continued effort to modernize and streamline the procedures adopted by the INPI. To date, however, the change implemented in August 2026 relates primarily to forms and the electronic filing workflow; this update has not introduced a new regulation to replace INPI Ordinances No. 34/2025 and No. 35/2025, which remain the references for the administrative procedure and the guidelines for examining contracts.
Technology Supply Agreements
In Brazil, the Industrial Property Law does not provide any specific definition or criteria aimed at the protection and defense of unpatented technologies, except for liability for the misuse of confidential knowledge, information, or data usable in industry, commerce, or the provision of services, which have been classified as crimes of unfair competition.
In this regard, the INPI had been adopting the position that knowledge and techniques not protected by intellectual property rights (know-how) could not be the subject of licensing, and that contracts involving such knowledge should be structured as acquisitions or mere disclosures of knowledge. This position was revised in late 2022 when, through the Minutes of the Meeting of December 28, 2022—effective as of January 23, 2023— the agency, seeking to align with international best practices, began to allow for the licensing of non-patented technology, on the grounds that it constitutes an atypical contract, as recognized by Article 425 of the Civil Code.
Reflecting this understanding, INPI Ordinances Nos. 26/2023 and 27/2023 adopt a more flexible approach, allowing contracts for non-patented technology to provide for:
- permanent acquisition; and
- temporary licensing for the use of knowledge and techniques not covered by industrial property rights, for the purpose of supporting the production of goods and services in the country.
Traditionally, technology supply agreements are defined in Brazil as any type of transaction in which one party transfers to the other technical knowledge used in the manufacture of a product or service, provided that such transfer was not carried out primarily through the provision of technical services.
In this regard, what helps characterize technology supply contracts is the delivery of technical documents, such as manuals, guides, or drawings, and the compensation, which, in these cases, is calculated based on a royalty rate applied to the net sales of the products or services developed using the transferred technology.
Software Contracts
With regard to software contracts, cases involving an actual transfer of technology to the Brazilian company must be registered with the INPI, that is, when there is the acquisition or transfer of complete documentation regarding the software—in particular, annotated source code, a descriptive memorandum, internal functional specifications, diagrams, flowcharts, or other technical data necessary for the assimilation of the technology—so that such contracts are enforceable against third parties (Article 11 of the Software Law—No. 9,609/98).
Software licenses do not need to be reviewed by the INPI, and royalty payments may be made directly through a commercial bank accredited by Bacen.
Taxation
With regard to the taxation of technology contracts and other intellectual property rights between domestic and foreign companies, the following taxes may apply, depending on the type of contract: Withholding Income Tax (IRF)—15%; the Contribution for Intervention in the Economic Domain (CIDE)—10%, with the possibility of a tax credit for trademark and patent license agreements; the Tax on the Importation of Services (ISS-Import)—maximum rate of 5%; the Contribution to Social Integration and Civil Servant Asset Formation Programs levied on the Importation of Foreign Goods or Services (PIS/PASEP-Import) – 1.65%; y Social Contribution for Social Security Financing owed by importers of foreign goods or services (COFINS-Import) – 7.6%; and Tax on Financial Transactions (IOF) – 0.38%.
The constitutionality and effective application of some of the above taxes remain questionable and may be subject to review by the Brazilian Judiciary.
Author: Marina Inês Fuzita Karakanian
Dannemann Siemsen
Av. Rodolfo Amoedo, 300 – Barra da Tijuca
22620-350 Rio de Janeiro- RJ
Phone: (21) 2237 8700
E-mail: [email protected]
Av. Brigadeiro Faria Lima, 4.221 – 3º andar
04538-133 São Paulo – SP
Phone: (11) 2155 9500
E-mail: [email protected]
Internet: www.dannemann.com.br
Patents, trademarks, designs, technology transfer, licensing, franchising, software, trade names, unfair competition.