Offshore Glossary: Essential Terms and Brazil's Rules

This glossary explains the offshore terms Brazilians run into most often when they have a company, account or trust abroad. Where a Brazilian rule exists, the term comes with its official source: Law No. 14,754/2023 (Lei 14.754/2023) for controlled foreign entities, trusts and transparency, IN RFB 1,037/2010 for tax havens, BCB Resolution 279 for the CBE and the OECD for CRS and BEPS.

What does "offshore" mean and what does Brazil require from people with assets abroad?

"Offshore" is a structure, account or asset outside the country where the person lives. Having one is not illegal in itself. What Brazilian law asks for is disclosure: the tax resident reports what they hold abroad to Brazil's Federal Revenue Service (Receita Federal) and, above a threshold, to the Central Bank of Brazil (BCB). Law 7,492/1986, art. 22, sole paragraph, treats it as a crime to keep deposits abroad that were not declared to the competent federal agency.

For the step-by-step declaration process, read how to declare an offshore company on your income tax return. The terms below follow the order in which they usually appear in practice.

Which terms define how Brazil taxes a company abroad?

• •Controlled foreign entity (CFC, "controlada"): an entity abroad in which you have preponderance in decisions or more than 50% of the capital or of the rights to profits, alone or with related persons. Funds and foundations fall within the definition. Source: Law 14,754/2023, art. 5, § 1. See Law 14,754.
• •Passive controlled entity: a controlled entity whose profit is taxed in Brazil on December 31 of each year. It is one located in a favored-taxation country, with a privileged tax regime, or with its own active income below 60% of total income (art. 5, § 5).
• •Own active income: revenue from the entity's own economic activity. Rent, interest, dividends, royalties and most capital gains are left out (art. 5, § 6).
• •Transparency regime (election): the individual reports the controlled entity's assets, rights and obligations as if they were their own. The election is made per entity and is irrevocable and irreversible for as long as you hold it (art. 8).
• •Favored-taxation country: a country that does not tax income, or taxes it at a rate below 17%, or whose domestic law prevents access to the ownership structure and the beneficial owner. The list of jurisdictions is in IN RFB 1,037/2010, art. 1. Many people call it a "tax haven."
• •Privileged tax regime: a regime that grants a tax advantage to a nonresident without requiring substantive economic activity, or that does not tax income or taxes it at less than 17%, among other cases. The definition is in Law 9,430/1996, art. 24-A, sole paragraph.
• •Transfer pricing: rules that require transactions between related parties to follow what would be agreed between independent parties (arm's length). Law 14,596/2023 applies to legal entities in Brazil and also covers transactions with entities in a favored-taxation country or privileged regime (arts. 24 and 24-A of Law 9,430). See transfer pricing in practice.
• •Currency evasion ("evasão de divisas"): a crime defined in art. 22 of Law 7,492/1986, punishable by imprisonment of 2 to 6 years and a fine for anyone who carries out an unauthorized foreign exchange operation for that purpose. The sole paragraph covers anyone who keeps undeclared deposits abroad. The source is Law 7,492.

What is the CBE and what is "Brazilian capital abroad"?

• •Brazilian capital abroad: funds, assets, rights and holdings of any kind held outside the national territory by residents (BCB Resolution 279, art. 1).
• •CBE (Brazilian Capital Abroad report): a declaration to the Central Bank. The annual one is mandatory when the total reaches US$1,000,000.00 on December 31 (art. 10). There is also a quarterly one, starting at US$100,000,000.00 (art. 11). The legal basis is Law 14,286/2021. See the official CBE page.
• •Record keeping: BCB Resolution 279, art. 3, sole paragraph, requires keeping the documentation that supports the capital for 10 years.

Which terms describe trusts and foundations?

• •Trust: a relationship in which the settlor transfers assets to a trustee to manage for the benefit of other people. For Brazil, the assets remain owned by the settlor until distribution to the beneficiary or until the settlor's death, whichever comes first (Law 14,754/2023, art. 10).
• •Settlor (or grantor): the person who creates the trust and puts the assets into it.
• •Trustee: the person who manages the trust's assets.
• •Beneficiary: the person who receives the assets or income. The change of ownership is a gift, if during life, or a transfer causa mortis, if on the settlor's death (art. 10, § 2).
• •Protector: a person who oversees the trustee and, depending on the trust deed, may veto or replace them.
• •Letter of Wishes: a non-binding letter in which the settlor records their preferences for the trustee.
• •Private foundation: an entity without shareholders, created for a purpose, used in jurisdictions such as Panama and Austria. In Brazil, art. 5, § 1, of Law 14,754 includes foundations in the definition of a controlled entity. See private foundation in Panama and in Austria.

To compare the formats, read the guide to trusts for Brazilians.

What types of offshore companies exist?

• •LLC (Limited Liability Company): a U.S. limited liability company, created under state law, as in Wyoming and Delaware. Under the IRS rules, a single-member LLC can be treated as a disregarded entity or elect to be taxed as a corporation. One with two or more members can be a partnership or elect to be a corporation. The U.S. classification does not change the Brazilian controlled-entity rule. Source: IRS, classification of taxpayers.
• •IBC (International Business Company): the historical name for companies formed to operate outside their home jurisdiction. In the British Virgin Islands, the current law uses "business company." See BVI.
• •LP and GP (Limited Partnership and General Partner): the LP has partners with limited liability and the GP is responsible for management.
• •SPV (Special Purpose Vehicle): a company created for a single asset or transaction.
• •Holding: a company that holds interests in other companies. Compare models in international asset holding company.

Which terms deal with information exchange and transparency?

• •CRS (Common Reporting Standard): an OECD standard for the automatic exchange of financial account information between countries. In Brazil, IN RFB 1,680/2016 covers account identification under the CRS. See CRS and automatic exchange.
• •FATCA (Foreign Account Tax Compliance Act): a U.S. law that leads foreign financial institutions to report accounts of U.S. taxpayers. The official explanation is on the IRS page.
• •UBO (Ultimate Beneficial Owner): the individual who, at the end of the chain, controls or benefits from the entity. This is the information banks and registries ask for.
• •BOI (Beneficial Ownership Information): a beneficial ownership report to FinCEN, in the U.S. According to FinCEN, U.S. companies are exempt from reporting, as of the update of August 11, 2026. Check the current scope before assuming it applies.
• •PEP (Politically Exposed Person): someone who holds or has held a relevant public function. Banks apply enhanced due diligence.
• •KYC and AML: Know Your Customer is customer identification. Anti-Money Laundering are the rules against money laundering.
• •BEPS (Base Erosion and Profit Shifting): an OECD and G20 project against shifting profits to jurisdictions with little economic activity. Read BEPS for Brazilians.
• •GloBE and minimum tax: global rules against tax base erosion. In Brazil, Law 15,079/2024 created the CSLL Surtax (Adicional da CSLL) for an effective minimum taxation of 15%, art. 2.
• •MLI (Multilateral Instrument): an OECD convention that updates treaties against double taxation. The Brazilian government announced its accession in 2025, and application to the treaties depends on ratification. See the joint MRE/MF note.

Which terms appear in international accounts and transfers?

These terms have no tax rule of their own, but they appear in every remittance:

• •SWIFT: a messaging network between banks. The SWIFT code (or BIC) identifies the recipient's bank.
• •IBAN: a standardized account number used in Europe and other countries.
• •Correspondent bank: an intermediary bank that connects two banks with no direct relationship. It can lengthen the processing time and charge a fee.
• •Wire transfer: an electronic transfer between banks.
• •SEPA: the euro payments area in Europe.

Keep the documents that explain the origin and the reason for each remittance. Compare ways to send money in international transfers.

Where can I check each term in the official source?