International Joint Venture: Contractual or Corporate? 2026 Guide

An international joint venture is a partnership in which partners from different countries run a business together. It can be contractual, without creating a legal entity, or corporate, with a company of its own. In Brazil, the choice sets the legal regime: consortium (Law 6,404, arts. 278 and 279), silent partnership (Civil Code, art. 991) or an incorporated company (art. 985).

The term "joint venture" does not appear in the Civil Code, in Law 6,404, in Law 14,286 or in Law 14,754. For that reason, the partnership has to fit one of the types provided by law. This guide shows the Brazilian types, the rule for the entry of foreign capital and the tax effect on the Brazilian individual partner. It includes no cases or numbers that lack a cited official source.

What forms can a joint venture take in Brazil?

A joint venture can be a consortium, a silent partnership or a company with legal personality, such as a limited liability company (limitada) or a corporation (S.A.). The table compares the effects of each form, according to the text of the laws.

The Civil Code defines the company contract as the agreement of those who undertake to contribute, with assets or services, to an economic activity and to share the results. The activity may be limited to one or more specific businesses (art. 981 and sole paragraph). Therefore, a partnership for a single project can also be corporate.

How does a contractual joint venture work in Brazil?

The most regulated contractual form is the consortium: two or more companies join to carry out a specific undertaking, without creating a new company. Art. 278 of Law No. 6,404 (Lei 6.404/1976, the Brazilian Corporations Law) allows corporations and other companies to form a consortium. The consortium has no legal personality, and the bankruptcy of one member does not extend to the others.

The consortium contract must contain (art. 279):

• •the name of the consortium, if any, and the undertaking that is its purpose;
• •the duration, address and forum;
• •the obligations and liability of each consortium member, with the specific contributions;
• •the rules for receiving revenue and sharing results;
• •the rules for administration, accounting, representation and administration fee, if any;
• •the form of decision-making and the number of votes of each member;
• •each member's contribution to common expenses, if any.

The contract and its amendments are filed with the commercial registry of the place of the head office, and the certificate of filing must be published (art. 279, sole paragraph). Since art. 278 speaks of corporations and other companies, an individual does not take part in a consortium directly.

In a silent partnership, the person who carries out the activity is the active partner, in their own name and under their sole responsibility (Civil Code, or "CC," art. 991). The contract has effect only between the partners, and registering the instrument does not give legal personality (art. 993). A participating partner who gets involved in the active partner's dealings with third parties is jointly liable for the obligations in which they intervene (art. 993, sole paragraph).

When does a corporate joint venture make more sense?

The corporate form makes sense when the partners want a company of their own, with separate assets, contracts and management. The company acquires legal personality upon registration of the founding documents in the proper registry (CC, art. 985). Choose this path when:

• •the business is ongoing and does not end with a specific project;
• •the company needs to contract, hold a bank account and have employees in its own name;
• •the partners want to limit liability to the value of the quotas, in a limited liability company (CC, art. 1,052);
• •there is an individual partner, who cannot be a consortium member.

The written articles of association contain, among other items, the purpose, the head office, the term, the capital, each partner's quota, the administrators and the share in profits and losses (CC, art. 997). In a corporation, the shareholders' agreement regulates the purchase and sale of shares, right of first refusal, voting and power of control. The company must observe it when it is filed at the head office (Law 6,404, art. 118). The obligations are binding on third parties only after being annotated in the registry books and on the share certificates (art. 118, § 1). The shareholders may seek specific performance of the agreement under the conditions it provides (art. 118, § 3).

Which law governs the contract between partners from different countries?

To qualify and govern obligations, the law of the country where they are constituted applies (LINDB, art. 9). An obligation arising from a contract is deemed constituted where the offeror resides (art. 9, § 2). If the obligation is to be performed in Brazil and depends on an essential form, that form must be observed (art. 9, § 1). The choice of law, forum and arbitration should be drafted with a lawyer from both countries.

How does foreign capital enter the Brazilian joint venture?

The capital of a nonresident partner in a Brazilian company is "foreign capital in Brazil" and receives the same legal treatment as domestic capital, on equal terms (Law 14,286, arts. 8, II, and 9). The Central Bank of Brazil (BCB) regulates and monitors this capital and may request information about it (art. 10, I and III).

Reporting follows BCB Resolution 278/2022, in the SCE-IED system. The official federal government page explains the rules:

• •What foreign direct investment is: the direct participation of a nonresident in the capital of a company in Brazil, or another economic right of a nonresident arising from an act or contract, whenever the return depends on the results of the business. This can reach contractual partnerships; confirm how your case is classified.
• •When to report: on a financial transfer tied to the nonresident investor of US$100 thousand or more, or on movements of US$100 thousand or more, such as capitalization, international contribution of quotas or shares and profit distribution when not made through the foreign exchange system.
• •Periodic reports: the quarterly one requires total assets of BRL 300,000,000 or more; the annual, BRL 100,000,000 or more; the five-year, BRL 100,000 or more, with a base date of December 31 of years ending in 0 or 5.

How is a Brazilian individual taxed on a joint venture abroad?

It depends on whether or not they control the foreign entity. Law No. 14,754/2023 (Lei 14.754/2023) treats as controlled a company or entity, incorporated or not, in which the individual has preponderance in corporate decisions or the power to elect the majority of administrators, or more than 50% of the capital or profits, alone or with related persons (art. 5, § 1).

• •Controlled entity: the profit earned is taxed on December 31 of each year, without waiting for distribution, but only if the controlled entity is in a favored-taxation country or privileged regime, or has own active income below 60% of total income (art. 5, §§ 5 and 10, III).
• •Non-controlling stake: the income goes on the Annual Adjustment Return when actually received (art. 3, § 2). Dividends and profit shares are part of the income (art. 3, § 1, II).
• •Rate: 15% on the annual adjustment, with no deductions from the base (art. 2, § 1).

If assets abroad total US$1,000,000 on December 31, there is also the CBE, filed from February 15 to April 5 of the following year. Taxation of a Brazilian legal entity with partners abroad follows other rules: see the guides on CFC rules and on the ECF of affiliated companies abroad.

What steps should I follow before signing the joint venture?

1. •Define the objective: a project with a term (consortium or silent partnership) or an ongoing business (company).
2. •Check who the parties are: a consortium is only among companies; an individual needs another type.
3. •Choose the legal type and draft the contract with the minimum content of art. 279 (consortium) or art. 997 (company).
4. •Register the instrument with the competent body: filing of the consortium or registration of the company's founding documents.
5. •Define the governing law and forum with lawyers from both countries.
6. •Map the reports: SCE-IED for foreign capital in Brazil and the CBE or the Annual Adjustment Return for the Brazilian partner with assets abroad.
7. •Validate the taxation with an accountant before the first contribution.

To set up the structure with specialized support, see our corporate structures and tax planning services.