Offshore Game Company: Legal Structure and Tax in Brazil

Yes, a game company can have a controlled entity abroad, as long as the partner who lives in Brazil declares everything here. Law 14,754/2023 taxes the controlled entity's profit at 15% on the annual adjustment: on December 31 if it is passive or located in a favored-taxation country; in other cases, when the profit is made available.

Can a game company have an offshore structure while resident in Brazil?

It can. Opening a game company abroad is legal, but it does not change the tax residence of whoever controls it. If you live in Brazil, the controlled entity's profit goes into your Annual Adjustment Return (DAA), and the date it enters depends on the company's profile and the country where it is located.

Two laws sit at the center of the discussion. Law No. 14,852/2024 (Lei 14.852/2024) defines what an electronic game is and creates incentives for the sector. Law No. 14,754/2023 (Lei 14.754/2023) says how the profit of a foreign controlled entity is taxed. One does not replace the other: the first deals with the activity, the second with the partner's tax.

A structure holds up better when there is an operational reason to be abroad, such as a team, a publisher, a distribution platform or a regulator's requirement. Without that, it becomes just one more entity to declare. The design starts from the contract and the operation, not from the jurisdiction. To see how this is built in practice, see international corporate structures.

What does Law 14,852/2024 say about electronic game companies?

Law 14,852, of May 3, 2024, creates the legal framework for the electronic game industry. It defines the electronic game, recognizes developer companies and provides special treatment for small ones, but it does not address offshore structures or tax on profit earned abroad.

Article 5 defines an electronic game as an interactive audiovisual work developed as a computer program, in which the images change in real time according to the player's actions. Devices dedicated to running games and mobile, console or virtual reality software, consumed by download or streaming, are also included.

Article 7 calls developer companies the business and corporate organizations whose purpose is to create electronic games. Article 8 makes companies with gross revenue of up to BRL 16,000,000.00 in the previous calendar year eligible for the special development-support treatment, or BRL 1,333,334.00 multiplied by the months of activity, when the previous year had fewer than 12 months. Eligibility also requires an innovative business model or the Inova Simples regime, under § 1.

Articles 11 and 12 apply Law 8,685/1993 to developers and treat game development as a cultural segment for Law 8,313/1991. Anyone considering raising funds through these routes should read both laws before setting up the structure. Do not assume the benefit reaches a foreign controlled entity: the text of Law 14,852 does not mention entities abroad.

Chapter III brings an operational point for those who publish in Brazil. Games accessed by children and adolescents must use their best interests as a parameter (art. 15), and games with interaction between users need reporting and moderation channels (art. 16). These duties follow the product, not the CNPJ (Brazilian company registration number) or the foreign company that publishes it.

Do electronic games and betting follow the same law?

No. Law 14,852 itself excludes from the concept of electronic game the lottery modalities regulated by Laws 13,756/2018 and 14,790/2023 and any game that offers a bet, with a prize in a real or virtual asset, or that involves a random or forecast-based result (art. 5, sole paragraph).

The same rule goes further: companies in those activities are prohibited from using the advantages of Law 14,852. That is why the first question in any project is whether the product is a game or a bet. The answer changes the applicable law, the regulator and the incentives.

A note of caution: the text of Law 14,790 published on the Planalto website carries revocation markings from Provisional Measure No. 1,394/2026 in several articles, including art. 4. Before any decision about betting, check the version of the rule in force and the Ministry of Finance's regulations. The table above describes what appears in the published text, not the current regime.

How does Law 14,754 tax the profit of a studio's controlled entity?

The profit of the foreign controlled entity goes into the DAA as income from capital invested abroad, at a rate of 15% and with no deductions (art. 2, § 1). What changes is the timing: on December 31 of each year or only when the profit is made available, depending on how the controlled entity is classified.

A controlled entity is one in which the Brazilian, alone or with related persons, has preponderance in decisions or more than 50% of the capital or profits (art. 5, § 1). The rule also catches indirect holdings and those of relatives up to the third degree.

For profits determined up to December 31, 2023, art. 6, I, also provides for taxation upon availability. The profits of controlled entities that fall under § 5 are determined in an annual balance sheet, converted at the Central Bank selling rate of the last business day of December and entered in the DAA (art. 5, § 10). For the planning as a whole, see the article on CFC rules worldwide and the international tax planning service.

Do game royalties change the controlled entity's math?

They can, and a lot. Art. 5, § 6, I, defines own active income as the revenue obtained directly by the controlled entity from its own economic activity, excluding revenue arising exclusively from royalties, interest, dividends, equity interests, rents, capital gains (except on the sale of equity interests or permanent assets bought more than 2 years earlier), financial investments and financial intermediation.

In practice, a controlled entity that only receives royalties from licensing a game has difficulty showing own active income of 60% or more. A controlled entity that develops, publishes and operates the game, with a team and revenue from sales or services, is in a different position. The classification of each revenue stream depends on the contract and the facts, and that is where the risk usually lies.

To understand how intellectual property is treated in other jurisdictions, read about IP Box regimes. These regimes belong to the foreign country and do not remove the partner's taxation in Brazil.

When does a Malta Gaming Authority license come into the picture?

As a rule, only when the business involves games of chance or another modality that the MGA regulates. The Malta Gaming Authority (MGA) is Malta's gaming regulator. On its applications page, it lists B2C and B2B licenses, permissions, and approvals of persons and audit providers. A studio that sells ordinary games, as a rule, does not need this.

The MGA's regulatory framework is made up of the Gaming Act and regulations, including those on authorizations, player protection and gaming taxation. The MGA keeps a public register of licensees, useful for checking whether a partner holds a valid authorization before signing a contract.

A foreign license, by itself, does not solve the Brazilian side. Betting operations in Brazil follow Brazilian law, and the resident partner remains subject to Law 14,754. For jurisdiction details, see the Malta page and the guide on a company in Malta. For licenses in general, the licenses and authorizations page shows how we handle the topic.

What precautions should you take before opening the structure?

Start by classifying the product: is it an electronic game, a bet or something hybrid? Then map who controls the entity, what the source of revenue will be and where the company will have staff and decision-making. Only then choose the country. Taking the reverse path, from the jurisdiction to the business, is the most common mistake.

Document the real substance, keep licensing contracts and financial statements, and plan the DAA from the first year. Also check whether there are reporting obligations to the Central Bank for capital held abroad, which vary according to the amount kept outside Brazil. The compliance topic is summarized in international compliance.