Types of Offshore Structures for Brazilians and Their Taxation

A Brazilian resident can use four types of offshore structure: a personal account and investments, a controlled company, an investment fund and a trust. Law No. 14,754/2023 (Lei 14.754/2023) defines how each is taxed. Investments pay 15% when income is received, qualifying controlled entities pay 15% on profit on December 31, and trust assets follow the settlor.

What types of offshore structure can a Brazilian use?

There are four, and Brazilian law treats each one differently. The table shows where the rule is and when the tax applies.

The choice depends on the goal (keeping funds, running a business, investing with professional management or organizing succession) and on your degree of control. The more control you have over the entity, the more the controlled-entity rules weigh. For an overview of services, see corporate structures.

How is a personal account or investment abroad taxed?

Income from financial investments abroad pays 15% individual income tax (IRPF) in the annual adjustment, with no deduction from the tax base (Law 14,754/2023, art. 2, § 1). It goes into the Annual Adjustment Tax Return (DAA), separate from other income and from capital gains.

The points that raise the most questions:

• •When it is taxed: in the period in which the income is actually received, such as interest, or on redemption, amortization, disposal, maturity or settlement of the investment (art. 3, § 2).
• •What counts as an investment: interest-bearing deposits, financial instruments, fixed- and variable-income securities, fund units, equity interests that are not controlled, among others (art. 3, § 1, I).
• •Checking account without interest: exchange-rate variation is not taxed if the deposit earns no interest and is held at a financial institution recognized and authorized by the monetary authority of the country where it is located (art. 2, § 3).
• •Cash: exchange-rate variation on cash is not taxed up to USD 5,000.00 of disposals in the calendar year. Above that, the gain is taxed in full (art. 2, §§ 4 and 5).
• •Tax paid abroad: you can deduct from the IRPF due in Brazil the tax paid in the country of origin, if there is a treaty providing for the offset or reciprocal treatment, up to the limit of the IRPF difference. Tax that can be refunded does not qualify, and the excess does not become a credit for other years (art. 4).

The guide how to report offshore in income tax details how to fill in the return.

When is an offshore company "controlled," and its profit taxed every year?

A company is "controlled" when you, alone or with related persons, have a majority of the votes or the power to elect most of the directors, or more than 50% of the capital or of the rights to profits and to the estate on liquidation (art. 5, § 1). The law includes investment funds and foundations in this definition.

The profit of that controlled entity is taxed on December 31 of each year, at 15%, only if it meets at least one of these conditions (art. 5, § 5):

1. •it is in a favored-taxation country or dependency, or benefits from a privileged tax regime, under arts. 24 and 24-A of Law No. 9,430/1996 (Lei 9.430/1996); or
2. •it earns own active income below 60% of total income.

In those cases, the profit is computed in the DAA on December 31, in your proportion, even without a distribution (art. 5, § 10, III). The balance sheet follows IFRS or Brazilian accounting standards, and conversion uses the Central Bank selling rate on the last business day of December (art. 5, § 10, I and II). When profit that was already taxed is distributed later, there is no new taxation (art. 5, § 11).

Own active income is the revenue from the controlled entity's own economic activity. The law excludes, among other things, royalties, interest, dividends, rents and financial investments (art. 5, § 6), with exceptions in §§ 7 to 9. A holding company that receives only this kind of income tends to fall below 60%.

Outside these cases, the profit is taxed when it is made available, that is, on payment, credit, delivery, use or remittance (art. 6). Anyone who prefers the art. 5 regime can opt for it (art. 6-A).

On the sale or liquidation of the interest, the exchange-rate variation on the principal is part of the capital gain, taxed under art. 21 of Law No. 8,981/1995 (Lei 8.981/1995) (art. 7). To compare with a holding company in Brazil, read holding or offshore.

Does the company's jurisdiction change the classification?

Yes, because art. 5, § 5, I, refers to favored-taxation countries and privileged regimes. Brazil's Federal Revenue Service (Receita Federal) lists these cases in IN RFB 1,037/2010.

Cosit Ruling No. 56/2026 (Solução de Consulta Cosit nº 56/2026) confirmed, in its summary, that US LLCs with non-resident ownership, treated as transparent under US law, are a privileged tax regime. Check the current list before deciding, because it is changed by new normative instructions. Jurisdiction pages: Cayman Islands, BVI and Delaware.

Can I report the company's assets as if they were mine?

Yes. Art. 8 allows you to opt to report the controlled entity's assets, rights and obligations as if you held them directly, instead of following arts. 5, 6 and 7. In practice, the market calls this the transparency option.

The rules of the option:

• •it applies to each controlled entity, separately;
• •it is irrevocable and irreversible while you hold the entity;
• •if there is more than one partner, all those who are individuals resident in Brazil must exercise it;
• •for interests acquired on or after January 1, 2024, the option is made in the first DAA after the acquisition.

The article opaque or transparent offshore explains the difference in practice.

How is an investment fund abroad taxed?

It depends on your control over it. Units of a third-party fund are a financial investment and follow art. 3: 15% on the gain when there is a redemption, amortization, disposal or settlement. A fund you control is treated as a controlled entity and follows arts. 5 to 8.

Two details of the law:

• •Funds with classes of units or shares with segregated assets treat each class as a separate entity, including for measuring control (art. 5, § 2).
• •The balance sheet of a controlled entity organized as a fund must also follow IFRS or Brazilian standards (art. 5, § 10, I).

For the case of an exclusive fund, see international exclusive fund.

How is a trust treated in Brazil?

Under Law 14,754/2023, trust assets remain owned by the settlor after the trust is created. They pass to the beneficiary only on distribution by the trust or on the settlor's death, whichever comes first (art. 10, I and II).

Consequences set out in the law:

• •Tax: income and capital gains are considered earned by the holder of the assets on the date they occur and are taxed under the rules that apply to the holder (art. 10, § 3).
• •Change of ownership: counts as a transfer without consideration: a gift, if during life, or a transfer upon death, if due to death (art. 10, § 2).
• •Controlled entity inside the trust: is considered held directly by the holder and follows the controlled-entity rules (art. 10, § 4).
• •Information: the settlor or the beneficiary must request from the trustee the resources and information needed to pay the tax. If the trustee does not comply, the obligations remain with the settlor or the beneficiary (art. 10, §§ 5 and 8).
• •Reporting: trust assets are reported directly by the holder in the DAA, at acquisition cost (art. 11).

The law defines a trust as a contractual arrangement governed by foreign law that regulates the relationship among settlor, trustee and beneficiaries (art. 12, I). Foreign contracts with similar characteristics, which are not controlled entities, follow the same rules (art. 13). The article offshore trust for Brazilians compares the trust with other options, and the succession planning service covers the estate side.

What else must a Brazilian report about an offshore structure?

Besides IRPF, the Central Bank requires the Brazilian Capital Abroad census (CBE) from anyone whose assets abroad total USD 1 million or more on December 31 (Resolution BCB 279/2022, arts. 10 and 12). The annual filing period runs from February 15 to April 5 of the following year, and the fine for failing to report ranges from BRL 2,500 to BRL 250,000, and can be increased by 50% in some cases, according to the BCB page.

Points from Resolution BCB 279/2022:

• •the CBE covers interests in non-resident companies, fund units abroad, deposits, real estate, virtual assets and derivatives (art. 7);
• •assets transferred to a fiduciary agent abroad for beneficiaries resident in Brazil, such as a trust, are also included (art. 7, § 2);
• •BDRs and units of funds in Brazil with assets abroad do not count toward the resident's threshold (art. 12, I);
• •documentation of the operations must be kept for 10 years (art. 3, sole paragraph);
• •financial transfers go through an institution authorized to operate in the foreign exchange market (art. 6).

There is also a quarterly report, only for those with USD 100 million or more on the reference dates of March 31, June 30 and September 30 (arts. 11 and 12). For the compliance design, see the compliance service.

Which structure fits each goal?

There is no best structure in theory: the goal and the degree of control decide. The table summarizes the point of attention for each path.

This page covers the types of structure. For tax-burden strategies, read how to reduce taxes with offshore and the international tax planning guide.

Does an offshore structure protect assets from creditors?

Not as a promise. Law 14,754/2023 deals with taxation, and the text itself limits the concept of trust ownership "for the purposes of this Law" (art. 10). Against creditors, the Civil Code applies: a gratuitous transfer of assets by a debtor who is already insolvent, or who is made insolvent by it, can be annulled by unsecured creditors (Civil Code, art. 158). The article protecting assets from creditors covers the topic.