9. Brazilian Exchange Control

9. Brazilian Foreign Exchange Control

Understanding Brazil’s foreign exchange (“FX”) control framework is critical for businesses and investors. Historically characterized by a highly regulated and often complex environment, Brazil has recently implemented significant legislative changes aimed at modernizing and simplifying its FX landscape, aligning it more closely with international best practices. This chapter provides a concise overview of the key transformations within Brazil’s foreign exchange system.

9.1. Evolution of Foreign Exchange Control

For decades, the Brazilian FX market operated under a stringent system primarily governed by Law No. 4,131 of 1962 and various regulations from the Central Bank of Brazil (“BCB”) and the National Monetary Council (“CMN”). This framework often necessitated prior authorization for transactions, imposed strict capital flow limits, and demanded extensive documentation. While intended to manage balance of payments and protect national industries, its complexity frequently deterred foreign direct investment.

A pivotal shift occurred with the enactment of Law No. 14,286 on December 29, 2021 (the “New FX Law“). This landmark legislation, fully effective since late December 2022, represents the most comprehensive overhaul in over six decades. Its primary objectives are to simplify rules, reduce bureaucracy, enhance legal certainty, and further integrate the Brazilian economy into the global financial system. Subsequent resolutions from BCB provide detailed implementation guidelines.

9.2. Brazil’s Exchange Rate Regime

Brazil operates a managed floating exchange rate regime, also known as a “dirty floating exchange rate.” While the exchange rate, primarily against the U.S. dollar, is largely determined by market forces (supply and demand), BCB retains a crucial role. It intervenes selectively through spot market operations and derivative instruments (e.g., foreign exchange swap contracts) to mitigate abrupt volatility and maintain market functionality, without directly fixing the rate. These interventions seek to mitigate abrupt or disorderly market movements and preserve the liquidity and orderly functioning of the foreign exchange market, without targeting any specific exchange rate level, while also contributing to stability and predictability in the economic environment.

9.3. The New Foreign Exchange Framework: Most Important Changes

The New FX Law fundamentally reshapes how foreign exchange operations, Brazilian capital abroad, foreign capital in Brazil, and information reporting are managed. Its core principle is market liberalization, shifting from a prohibitive framework to one that permits operations unless explicitly restricted.

9.3.1. Key Legislative Provisions (Law No. 14,286/2021):

• Liberalized Operations: FX operations can now be “freely carried out, without value limits,” provided they comply with applicable legislation. Exchange rates are “freely agreed upon” between authorized institutions and clients. The simplification of foreign exchange transactions is particularly noteworthy, with a significant reduction and rationalization of the classification categories applicable to small-value transactions (up to US$50,000), together with the adoption of more flexible procedures for entering into foreign exchange transactions, thereby increasing transaction efficiency and speed.
• Expanded Use of Foreign Currency in Brazil: The law broadens the situations where obligations payable in Brazil can be denominated in foreign currency, including international trade contracts and transactions where one party is a non-resident. It also permits foreign currency accounts for strategic sectors (e.g., oil, energy).
• Cash Entry and Exit: Individuals may now carry up to US$10,000 (or equivalent) in cash without intermediation by an authorized institution, aligning with international standards. Amounts exceeding this limit require processing through authorized FX institutions and may demand proof of origin/destination.
• Occasional Sale of Foreign Currency Between Individuals: The new legislation now permits the occasional purchase and sale of foreign currency in cash between individuals, limited to US$500 per transaction, without requiring intermediation by an authorized institution. This measure enhances flexibility in the use of foreign currency in everyday situations, such as selling leftover travel funds, without constituting professional currency exchange activity.
• Flexibility for Brazilian Capital Abroad: Brazilian companies are authorized to hold foreign currency resources outside Brazil, including those from external financing. The payment of obligations — such as commissions, taxes, or imports — can be made directly from the overseas account. However, the sending of these resources to third-party accounts remains subject to proof of connection with the company’s contractual obligations. There is no longer a mandatory immediate internalization of captured funds, enhancing international cash management.
• Non-Resident Accounts in BRL: The legislation expands the opening of Brazilian Real (BRL) accounts by non-residents, promoting broader international use of the Brazilian currency.
• External Credit Reporting – SCE-Credit (formerly RDE-ROF): Information on external credit transactions is reported through SCE-Credit pursuant to BCB Resolution No. 278/2022. For private-sector individuals and legal entities, reportable transactions include, among others, direct loans, issuance of securities in the international market, privately placed securities issued in the domestic market, and financing transactions, including those involving international organizations, with a value equal to or greater than US$1 million; financed imports of goods or services with payment terms exceeding 180 days and a value equal to or greater than US$500,000; and advance export receipts and external financial leasing transactions with terms exceeding 360 days and a value equal to or greater than US$1 million. For external credit transactions entered into by entities of the direct and indirect public administration at the federal, state, municipal and Federal District levels, reporting is required regardless of the transaction amount.
• Client Responsibility for Classification: Clients are responsible for classifying the purpose of FX operations, with institutions providing necessary support.

9.3.2. Implementing Regulations: Operational Aspects

BCB Resolution No. 277/2022, which regulates the principal operational aspects of Law No. 14,286/2021, was further amended in 2025 and 2026, including by BCB Resolutions No. 521/2025, No. 561/2026, No. 574/2026 and No. 575/2026. The main operational aspects of the current framework and of amendments already published include:

• Reduced Categories and Enhanced Transparency: The number of FX categories for small-value operations (up to US$50,000) has been significantly reduced, simplifying processes. The “Valor Efetivo Total (“VET”, or Total Effective Value)” disclosure ensures greater transparency regarding exchange rates, taxes, and fees. This value, expressed in BRL per unit of foreign currency, considers the exchange rate, applicable taxes, and any fees charged. For client operations up to US$100,000, institutions must inform the VET before the operation. It should be noted that the IOF rates applicable to foreign exchange transactions have undergone significant changes in the recent period; their detailed tax treatment, however, falls outside the scope of this chapter, which addresses foreign exchange control.
• Expanded Authorization for Institutions: Beyond traditional banks, specific types of payment institutions (e.g., electronic money issuers) are now authorized to perform client FX operations up to defined limits, fostering increased competition and innovation.
• Export and Import Rules Flexibility: Export revenues and import payments can now be made in BRL or foreign currency, with specific rules for early payments (up to 360 days, or 1800 days for certain large equipment/machinery imports) regardless of the commercial negotiation currency, offering greater flexibility in international trade.
• International Payment or Transfer Services (“eFX”): The regulatory framework applicable to international payment or transfer services (eFX) was further enhanced by BCB Resolution No. 561/2026, effective October 1, 2026. As a general rule, the regulation provides that eFX services must be rendered by the categories of institutions authorized to operate by BCB expressly provided for under the applicable rules, without prejudice to the transitional regime applicable to certain service providers already operating in the market, which may continue their activities, subject to specific conditions and limitations, provided that they submit an authorization request to BCB by May 31, 2027. The new framework also establishes specific requirements for the flow of client funds, including, in certain circumstances, the use of a deposit account or prepaid payment account held by the service provider and exclusively dedicated to facilitating eFX transactions, and expands the service to transfers of funds related to investments in the financial and securities markets, in Brazil or abroad, up to the equivalent of US$10,000.
• Virtual Assets and the Foreign Exchange Market: BCB Resolution No. 521/2025, effective since February 2, 2026, brought certain activities involving virtual assets within the scope of the foreign exchange market, including international payments or transfers, transfers connected with the international use of cards or other electronic payment instruments, transfers originating from or destined for self-custodied wallets, and the purchase, sale or exchange of virtual assets referenced to fiat currency. BCB Resolution No. 574/2026, in turn, established reporting requirements to BCB for such transactions, providing that the reporting obligation will apply to transactions carried out from November 3, 2026 onward.
• Foreign Currency Accounts in Brazil: Brazilian regulations permit foreign currency deposit accounts for specific categories of account holders. BCB Resolution No. 575/2026, effective October 1, 2026, expands the eligible categories to include, among others, legal entities that export goods, private resident legal entities that are debtors under external credit transactions, companies headquartered in Brazil with direct non-resident equity participation, and non-resident legal entities that are creditors under external credit transactions with residents or that hold a direct equity interest in companies headquartered in Brazil. The regulation establishes specific conditions for the opening and operation of these accounts and introduces new reporting obligations to BCB, including the reporting, by the institutions maintaining such accounts, of information relating to them through the Sistema Câmbio.
• Documentation and Due Diligence: Although the new regulatory framework is intended to simplify procedures, institutions authorized to operate in the foreign exchange market may request or waive information and supporting documentation based on their assessment of the client’s profile and the characteristics of the transaction, always in compliance with anti-money laundering and counter-terrorism financing (AML/CFT) requirements, particularly Circular No. 3,978/2020. Institutions must keep available to BCB, for a minimum period of ten years, evidence of the client’s consent to the agreed terms, information relating to the transaction, and any supporting documentation collected. Since BCB Resolution No. 499/2025, BCB may also obtain and use information from import and export declarations recorded in Siscomex (Integrated Foreign Trade System) for the performance of its statutory duties, particularly for the regulation and supervision of the foreign exchange market, actions aimed at preventing money laundering, terrorist financing and the proliferation of weapons of mass destruction, as well as for the regulation and supervision of Brazilian capital abroad and foreign capital in Brazil related to international trade.

9.4. Non-Resident Investments

Joint Resolution No. 13/2024 (BCB/CVM), effective January 1, 2025, significantly updates the framework for non-resident investments in Brazilian financial and securities markets:

• Unified and Equal Access: Non-resident investments can now access the “same financial instruments and modalities available to resident investors,” promoting a level playing field.
• Exemptions from Representation: Crucially, the resolution introduces specific exemptions from the requirement to appoint a representative in Brazil and to register with the CVM, particularly for non-resident individual investors and, in certain circumstances, for non-resident legal entities investing in financial assets through a non-resident account denominated in Brazilian reais held in their own name.
• Local Fund Flow Requirement: A general prohibition is established against making payments and financial movements from foreign accounts for investments covered by this resolution; funds must typically flow into and out of Brazil through the domestic financial system.

9.4.1. Reporting Obligations to BACEN

Despite liberalization, robust reporting remains vital for macroeconomic statistics, supervision, and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) compliance.

• General Mandate: BCB maintains broad authority to request data from authorized institutions and residents regarding FX operations, capital flows, and private credit compensation.
• FX Operations Reporting: Authorized institutions must report detailed FX operation data to BCB’s Sistema Câmbio, with daily cut-off times, though operations up to US$50,000 have extended monthly reporting deadlines.
• Non-Resident Account Reporting: Institutions maintaining BRL accounts for non-residents must report movements by the fifth day of the subsequent month, with stricter requirements for high-value transactions.
• Non-Resident Investment Reporting: Representatives and institutions handling non-resident investments are required to maintain updated records, provide information to BCB and CVM upon request, and retain documentation for at least ten years. The client’s role in classifying transactions remains essential.

The new foreign exchange framework in Brazil marks a significant transition towards a more open, modern, and internationally aligned financial system.

9.5. Bibliographical References:

Banco Central do Brasil. (2020, January 23). Circular nº 3.978: Provides for the policy, procedures and internal controls to be adopted by institutions authorized to operate by the Central Bank of Brazil in order to prevent the use of the financial system for money laundering and terrorism financing crimes. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2022, December 31). BCB Resolution No. 277: Regulates Law No. 14,286/2021 with respect to the foreign exchange market and the entry into and exit from Brazil of amounts in Brazilian reais and foreign currency. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2022, December 31). BCB Resolution No. 278: Regulates Law No. 14,286/2021 with respect to foreign capital in Brazil, external credit transactions, foreign direct investment and reporting to the Central Bank of Brazil. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2023, August 22). BCB Resolution No. 337: Amends BCB Resolution No. 277/2022 regarding the foreign exchange market and the entry into and exit from Brazil of amounts in Brazilian reais and foreign currency. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil & Comissão de Valores Mobiliários. (2024, December 3). Joint Resolution No. 13: Provides for investments by non-residents in the Brazilian financial and securities markets. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2025, September 10). BCB Resolution No. 499: Regulates BCB access to import and export declarations recorded in Siscomex and their use for supervisory purposes. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2025, November 10). BCB Resolution No. 521: Includes certain activities and operations of virtual asset service providers within the foreign exchange market and addresses Brazilian capital abroad and foreign capital in Brazil involving virtual assets. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2026, April 30). BCB Resolution No. 561: Enhances the regulatory framework for international payment or transfer services (eFX). Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2026, June 18). BCB Resolution No. 574: Provides for reporting of virtual asset transactions within the foreign exchange market. Diário Oficial da União, section 1. Brasília, DF.

Banco Central do Brasil. (2026, June 18). BCB Resolution No. 575: Expands the categories of Brazilian and non-resident legal entities permitted to maintain foreign currency deposit accounts in Brazil and amends BCB Resolutions No. 277/2022 and No. 278/2022. Diário Oficial da União, section 1. Brasília, DF.

Brazil. (1962, September 3). Law no. 4.131: Provides for foreign capital and remittances abroad and other provisions. Diário Oficial da União, section 1. Brasília, DF.

Brazil. (2021, December 29). Law no. 14.286: Provides for the foreign exchange market, Brazilian capital abroad, foreign capital in the country and the provision of information to the Central Bank of Brazil. Diário Oficial da União, section 1. Brasília, DF.

Carrete, L. S. (2019). Brazilian financial market (p. iv) [E-book]. Atlas. https://app.minhabiblioteca.com.br/reader/books/9788597021394/

Reis, F. J. G. dos, Silveira, A. O. da, Campos, E. do N. O., & et al. (2023). International finance and exchange (p. 76) [E-book]. SAGAH. https://app.minhabiblioteca.com.br/reader/books/9786556903705/

Authors: Analice Hegg Amaral Lima e Ellen Porto Gomes

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