‎Real Estate Acquisition by Foreigners in Brazil & Central Bank Registration | Expert Legal Advisory

Real Estate Acquisition by a Foreigner and Registration with the Central Bank

Obligation to Register with the Central Bank in Case of Personal Use of the Property

According to current Brazilian foreign exchange legislation, it is not mandatory to register with the Central Bank (via RDE-IED) the remittance of funds made by a foreign individual for the acquisition of a property in their own name intended for personal use. The Electronic Declaratory Registration – Foreign Direct Investment (RDE-IED) applies only to investments that fit the legal definition of foreign direct investment, that is, the participation of a non-resident in the capital of a Brazilian company (or equivalent economic rights) whose return depends on the outcome of a business activity. Properties acquired directly by foreigners as individuals (not via corporate participation) do not meet this definition, as they do not involve a contribution to the corporate capital of a Brazilian company nor income linked to "business results." In other words, the purchase of a property for personal use does not constitute a "foreign direct investment" under the terms of BCB Resolution No. 278/2022 and Law No. 14,286/2021, which is why there is no requirement for registration via RDE-IED for this transaction.

This interpretation is corroborated by recent changes in foreign exchange regulations. BCB Resolution No. 278/2022 (issued in the context of the new Legal Framework for Foreign Exchange, Law 14,286/21) revoked provisions of the former BCB Circular 3,689/2013 that previously required registration with the Central Bank for certain operations involving the inflow of funds from non-residents. With the new law, the Central Bank began to adopt proportionality criteria and focus declaratory obligations only on operations that represent direct foreign investment (corporate participation) or external credit above certain values. Therefore, remittances from a foreign individual to buy goods in Brazil, such as real estate for personal use, are no longer subject to mandatory registration with the Central Bank, as long as they do not involve the acquisition of local corporate participation or another form of investment categorized as FDI.

Purpose of the Property: Personal Use vs. Investment

From a foreign exchange regulatory standpoint, there is no distinction regarding the obligation to register based on the purpose of the property (personal use vs. investment) when the purchase is made directly by the foreign individual. The determining criterion is the legal nature of the transaction—whether it constitutes a foreign direct investment (participation in a company) or not—and not the intended use of the acquired asset. Thus:

Property acquired for personal use (residence, leisure, etc.): It continues not to be a direct investment (as there is no company receiving foreign capital), regardless of whether the foreigner eventually rents it out or earns some income. Even if the foreigner considers the property a "patrimonial investment" in a broad sense, for foreign exchange purposes, they are not investing through a business entity but acquiring an asset directly; therefore, no declaratory registration with the Central Bank is required in this case.

Property acquired as an investment (e.g., for rental or resale), but in the name of the foreign individual: This situation is identical to the one above. The destination (rental, resale for profit) does not change the fact that there was no contribution to the capital of a Brazilian legal entity, so it remains outside the scope of FDI/RDE-IED. Any rental income or capital gain on the sale will be taxed according to non-resident rules, but there is no specific foreign exchange registration linked to the purpose of the property.

Only if the foreigner chose to make the real estate investment indirectly, by establishing or acquiring a stake in a Brazilian company that would own the property, would the transaction be characterized as a direct foreign investment (as the capital enters the company). In this alternative situation (a vehicle company holding the property), registration with the Central Bank would be applicable—but it is worth noting that in this case, the property itself remains an asset of the receiving company, and the registration would be for the investment in the company, not for the property itself.

In summary, for registration purposes with the Central Bank, it does not matter if the property is for personal housing or for obtaining income; what matters is whether the structure of the operation involves a corporate investment. Properties acquired directly by the foreigner, whatever the purpose of use, do not give rise to RDE-IED registration because there is no investment in the capital of a Brazilian company.

When RDE-IED is Mandatory for a Foreign Individual

The RDE-IED (currently integrated into the SCE-IED – System for Providing Information on Foreign Capital – Foreign Direct Investment) is mandatory only in situations where the non-resident makes a direct investment in an entity in Brazil. For a foreign individual, this basically occurs when they:

Incorporate or acquire a corporate stake in a Brazilian company (e.g., established a limited liability company, joined an existing company as a partner, bought shares or quotas of a local company). In these cases, the receiving company must register the corresponding foreign capital with the Central Bank. According to the Central Bank, Brazilian legal entities that have non-resident investor participation in their capital are obliged to provide information via SCE-IED.

Granted credit or financing to a Brazilian resident (which would characterize external credit operations, registered via RDE-ROF, not in the IED module). Note: external credit is not FDI, but it also involves registration if above certain amounts – see below.

Specifically concerning foreign direct investment (FDI), with the entry into force of Law 14,286/2021 and related regulations, the Central Bank established minimum value criteria ("thresholds") for the obligation to register. Currently, FDI information must be provided (via SCE-IED) when:

A financial contribution from the foreign investor to a company in Brazil of a value equal to or greater than US$ 100,000 (or its equivalent in another currency) occurs. Example: a foreigner who contributes US$ 150,000 to pay up corporate capital in a Brazilian company triggers the obligation to register this inflow with the Central Bank. Smaller corporate investments (below USD 100,000) do not require immediate registration under current rules, in line with the deregulation brought by the new foreign exchange framework.

Other capital movements related to direct investment in an amount ≥ US$ 100,000, such as reinvestment of profits, capitalization with assets, conversion of credits into capital, transfers of corporate participation between residents and non-residents, distribution of results abroad, etc. (as detailed in art. 36 of BCB Res. 278/2022). These corporate transactions, when involving relevant amounts, also require registration within 30 days.

Base dates for periodic declarations: Brazilian companies receiving FDI are subject to periodic declaration obligations to the Central Bank only if they reach a significant size. For example, annual balance sheets for companies with total assets ≥ R100million(annual)or≥R300 million (quarterly), and a quinquennial declaration for companies with assets ≥ R$100,000. These declarations replace the old requirement of an annual update of the corporate structure for all companies—now only large companies or those above certain limits need to report periodically.

Important: The registration with the Central Bank is always done by the receiving company or its representative, not directly by the foreign individual investor. That is, if a foreigner invests in a Brazilian company, it is up to the (Brazilian) company to register that foreign investment in the SCE-IED module. The foreign individual, alone, does not "open" an RDE-IED; they will be registered as an investor in the system, but the reporting duty falls on the Brazilian entity that received the funds.

In short: For a foreign individual, the RDE-IED becomes relevant and mandatory only if they are contributing capital to a legal entity in Brazil (direct investment). In these cases, the deadlines and limits established (as above) must be observed to carry out the electronic registration of the foreign capital. Outside the context of participation in companies, there is no obligation to register simple remittances for private acquisitions, as this does not constitute regulated foreign direct investment.

Consequences of Not Performing a Mandatory Registration

If the foreigner (or the receiving Brazilian company) fails to register a mandatory foreign direct investment, or does not update the required information, they will be subject to administrative sanctions from the Central Bank. The consequences include:

Pecuniary fines: The Central Bank can apply fines proportional to the value of the undeclared investment or that which was declared out of time. For example, under the previous regulation (Circ. 3,689/2013, Res. 3,844/2010), fines for not registering or not declaring due information ranged from 1% to 10% of the value subject to registration, limited to amounts between R$ 25,000 and R$ 250,000, depending on the severity (delay, total omission, incorrect or fraudulent information). Although the new Foreign Exchange Law has simplified obligations, penalties for non-compliance remain significant—around up to R$125,000 for not registering, which can be increased by 50% if not corrected after notification. In summary, there is a risk of a considerable fine (proportional to the value) for those who do not comply with the mandatory registration.

Difficulty in repatriating funds: Historically, registration with the Central Bank guaranteed the foreign investor the right to repatriate the capital and remit corresponding profits freely, after paying the due taxes. Without the registration, the lack of formal proof of the inflow as foreign capital could hinder or delay foreign exchange operations for the return of money abroad, as banks require documentation proving the origin of the funds. In current practice, even without registration, it is possible that the original foreign exchange contract (at the time of the dollar inflow for the property purchase, for example) may serve as evidence of a lawful inflow of funds. However, if it were a case of an undeclared investment in a company, the lack of registration could lead the Central Bank to question the operation and, in an extreme scenario, characterize it as an irregular capital inflow.

Other sanctions and legal impediments: The legislation gives the Central Bank the power to adopt additional coercive measures in case of non-compliance. For example, the Central Bank can deny authorizations for new operations as long as the irregularity persists and even notify other authorities. In serious cases involving intentional omission or significant values, there may also be legal implications (such as investigations for currency evasion or tax evasion, if applicable).

In short, not registering a mandatory foreign direct investment is an infringement of foreign exchange rules. The main consequences are financial fines, whose ceiling can reach hundreds of thousands of reais, in addition to the risk of obstacles to repatriating the invested money or its returns. Therefore, in the context of a corporate investment, it is crucial that the receiving company (or its representatives) performs the registration within 30 days and keeps the declarations updated, ensuring compliance. It is worth remembering: in the case of acquiring a property for personal use outside the scope of FDI, this obligation does not apply—but if the foreigner later decides, for example, to convert the property into company capital or make a formal investment, then the operation must be registered with the Central Bank.

Viable and Compliant Alternatives to the Current Regulation

To enable the acquisition of a property in Brazil by a foreign individual in a regular manner and in compliance with current foreign exchange rules, there are some recommended alternatives and procedures:

Use of the Official Foreign Exchange Market: The remittance of values from abroad must be done through an authorized institution (a bank or foreign exchange broker in Brazil), by entering into an inflow foreign exchange contract. In this contract, the nature of the operation must be correctly classified—for example, "Capital transfer – real estate acquisition" (the current FX codes, under BCB Res. 277/2022, contemplate the purchase of real estate as a specific purpose). The bank will convert the foreign currency into reais and deposit it in the indicated account (usually that of the property seller, or in the buyer's own account in Brazil). Following this official procedure dispenses with any additional registration with the Central Bank, as the inflow of funds will already be documented and compliant with Brazilian legislation. Important: direct payments abroad to the seller, in foreign currency, to settle a property in Brazil are not permitted, as they violate the rule that obligations in national territory must be settled in national currency (art. 318 of the Civil Code). Therefore, the official foreign exchange route is the appropriate and legal path.

Non-Resident Account in Reais (CDE): An operationally convenient alternative is for the foreigner to open a bank account in reais in Brazil, as a non-resident (known as a Non-Resident Account – CDE). The new foreign exchange regulation has facilitated the movement in these accounts, largely equating them to resident accounts. With the account opened, the foreigner can internationalize the funds (bring them in) via wire transfer, convert them into reais within the account itself, and then pay the seller via domestic transfer. This modality ensures an internal record at the bank of the capital inflow and may simplify future repatriation, as the same CDE account can later receive the proceeds from the sale of the property and send them abroad via an FX transaction. It should be noted that to open an account, the foreigner needs an active CPF (Brazilian taxpayer ID) and must meet the bank's compliance policy (identification, proof of residence abroad, etc.). But there is no registration requirement with the Central Bank beyond the normal registration (RDE-CDNR) that the bank performs for non-resident clients.

Formalization via a Company (if applicable): Should the foreigner, for personal or asset-planning reasons, prefer to establish a company in Brazil to acquire the property (for example, a legal entity for managing personal assets), the operation then becomes considered a foreign direct investment. This is a valid alternative, but it implies additional obligations: it will be necessary to register the foreign capital invested in the company with the Central Bank (via SCE-IED) and comply with periodic declarations according to the company's size. From a regulatory point of view, there is no advantage in using this structure if the purpose is only personal use of the property—in fact, it creates extra bureaucracy. However, some foreigners opt for this route for succession planning, obtaining a real estate investor visa, or asset protection. In these cases, the FDI rules must be strictly followed (registration of capital within 30 days if ≥ US$100,000, asset updates, etc.) to maintain a regular status.

Documentation and tax compliance: Regardless of choosing to act on their own or through a company, the foreigner must keep all supporting documentation—the inflow foreign exchange contract, purchase and sale deeds, receipts—organized. At the time of reselling the property and remitting the sale proceeds abroad, the bank may require such proof to carry out the outflow foreign exchange operation. Furthermore, the foreigner must observe tax obligations: payment of any capital gains on the sale of the property (income tax, generally 15% for non-residents, unless international agreements apply) and payment of tax on rental income if earned, etc. By complying with tax requirements and having clear records of the original inflow, the repatriation of the values will be authorized without hindrance, even without a formal "Central Bank registration," as the original foreign exchange contract itself and the registration at the financial institution serve as the legal basis for the remittance.

In summary, the current foreign exchange regulation (Law 14,286/21, BCB Res. 277/2022 and 278/2022, among others) offers the foreign individual simplified and legal means to acquire property in Brazil: it is sufficient to use the official foreign exchange channels, without the need for special registrations with the Central Bank for personal use. The former bureaucracy that required registration of any and all foreign capital within 30 days no longer exists—today the focus is on corporate investments and structured financial operations. For the case presented (remittance > US$100,000 for the purchase of a personal property), the guidance is: proceed via an authorized institution, correctly classify the operation, and ensure tax compliance. Thus, the foreigner will be acting within the law, being able to return the funds abroad in a regular manner in the future, and avoiding risks of both administrative penalties and invalidation of the real estate transaction.

Sources Consulted:

Law No. 14,286, of 12/29/2021 – New Legal Framework for Foreign Exchange and International Capital.

BCB Resolution No. 277, of 12/31/2022 – Regulates the foreign exchange market, inflow and outflow of capital (Central Bank of Brazil).

BCB Resolution No. 278, of 12/31/2022 – Regulates foreign capital in the country, external credit operations, and foreign direct investment (Central Bank of Brazil).

BCB Circular No. 3,689, of 12/16/2013 (partially revoked) – Previous regulation on foreign capital in the country.

Gov.br Portal – Service "Declare foreign capital arising from foreign direct investment" (updated on 08/19/2025).

Central Bank of Brazil – Frequently Asked Questions about the new foreign exchange regulation (indicating elimination of mandatory registrations for non-residents in certain cases).

Advanced Corretora Blog – "RDE-IED has changed! Get to know the new SCE-IED" (Apr/2023) – summary of the new FDI registration obligations.

Econet Editora – "Foreign Direct Investment – Penalties" (2020) – penalties for non-compliance with RDE-IED under the previous regulation (similar criteria maintained).