Offshore Company to Invest Abroad: How to Structure It in 2026

Investing abroad through an offshore company only pays off when the structure solves a real problem, such as succession or risk concentration, because it does not eliminate tax in Brazil. Law No. 14,754/2023 (Lei 14.754/2023) charges 15% on earnings and, for most investment holdings, profit is taxed every December 31, even without distribution.

If you already buy US stocks and are thinking about opening an offshore company, you may assume the next step is to "pay less tax." In practice, the decision revolves around three accounts: Brazilian individual income tax (IRPF), the US estate tax, and reporting obligations. Below, each one is covered, with the article that supports it.

When does it make sense to use an offshore company to invest abroad?

If all you want is exposure to the US market, a personal account with a foreign broker is usually enough. Earnings are treated as financial investments abroad (Law 14,754, art. 3) and taxed at 15% in the annual adjustment, with no deduction from the tax base (art. 2, § 1). Gains on the sale of shares in companies not controlled on a foreign exchange fall under the same rule.

An offshore company starts to make sense when other goals come in: bringing several assets under a single holder, separating personal wealth from investment wealth, organizing succession among heirs, or limiting direct exposure to assets located in the US. None of these reasons reduces Brazilian tax on its own, which is why the structure needs to be designed with tax planning and estate succession in mind from the start.

How does Law 14,754 tax investing through an offshore company?

The law treats the offshore company as a "controlled entity" when you hold, alone or with related persons, more than 50% of the capital or profits, or have the power to elect most of the directors (art. 5, § 1). Within that rule, the treatment depends on the type of income the company earns.

The central point is the definition of own active income. The law excludes from it income from interest, dividends, equity interests, rents, capital gains (with exceptions) and financial investments (art. 5, § 6). A holding that only keeps a portfolio of stocks and ETFs has, in practice, active income close to zero. It falls below 60% and comes under the art. 5 regime: the profit calculated in the annual balance sheet is added to your tax return on December 31, at a 15% rate, regardless of any decision to distribute (art. 5, § 10, III).

This overturns the most common reasoning about investment offshores: "if I reinvest inside the company, the tax is deferred." For a passive holding, it is not. When the dividend is paid later, it is not taxed again, because the profit was already offered to taxation (art. 5, § 11). Income tax paid abroad by the controlled entity can be deducted in proportion to your stake, up to the limit of the tax due in Brazil (art. 5, § 15).

Opaque or transparent offshore: what changes?

Art. 8 lets you declare the offshore company's assets, rights and obligations as if they were your own. In that case, the income from the assets follows the rule for each type, such as that for financial investments abroad. The option applies per entity, is irrevocable for as long as you keep the company and, if there is more than one partner resident in Brazil, must be exercised by all of them (art. 8, § 1).

There is also the reverse path. A controlled entity that would not fall under the annual regime can opt into it (art. 6-A). The full comparison is in opaque or transparent offshore.

Realized losses on financial investments abroad can be offset against income of the same nature in the same period, and the balance carries over to later periods, only once (art. 9).

What is the US estate tax and why does it weigh on US stocks?

The estate tax is the US federal tax on the transfer of wealth at death. According to the IRS, deceased persons who were nonresidents and not US citizens are subject to it on property located in the US, including US real estate, tangible personal property (with some exceptions, such as certain works of art) and shares of companies incorporated under US law, even if the certificates are kept outside the country.

The return is filed on Form 706-NA, and the IRS sets at US$ 60,000 the value of US-situated property above which the executor must file it. That number is a filing threshold, not a tax exemption. Under Table A of the Form 706 rates, the rate reaches 40% on the amount above US$ 1 million, and the unified credit is, as a rule, limited to US$ 13,000.

An illustrative example: for US$ 500,000 in shares of US companies, Table A results in US$ 155,800 of tax. After the maximum credit of US$ 13,000, US$ 142,800 remains, before any allowed deduction. This is an estimate to give an order of magnitude, not a calculation for your situation.

The IRS also notes that estate tax treaties between the US and other countries may give more favorable treatment to nonresidents. That is why the right question before buying US assets at scale is: who holds these shares, and which rule applies to that holder? The answer changes with the type of entity. The IRS explains, for example, that a single-member LLC is by default treated as a disregarded entity for federal income tax, unless it elects to be treated as a corporation, and that alone does not settle the estate question. For designing the structure, see corporate structures, LLC in Wyoming or Delaware and the jurisdictions of Wyoming and Delaware.

Do US dividends paid to an offshore company face withholding?

Yes. According to the IRS instructions for Form W-8BEN-E, foreign persons are subject to a 30% US tax on US-source income consisting of, among other things, interest, dividends, rents and royalties. The rate may be reduced by a treaty between the US and the beneficiary's country of residence.

The W-8BEN-E is the form foreign entities use to document their status to the withholding agent. Before assuming any lower rate, confirm with your advisor whether the structure's country has an applicable treaty.

What obligations come with wealth abroad?

The best known is the Declaration of Brazilian Capital Abroad (CBE), filed with the Central Bank of Brazil (BCB). Under BCB Resolution No. 279/2022, the annual declaration must be submitted when the total abroad on December 31 is equal to or greater than US$ 1 million (art. 10), between February 15 and April 5 of the following year (art. 13). The count includes, among other items, interests in nonresident companies, real estate abroad, virtual assets and wealth transferred to a trustee abroad for the benefit of beneficiaries resident in Brazil (art. 7).

The quarterly declaration is only required from US$ 100 million (art. 11). Units of investment funds in Brazil and BDRs are left out of the calculation of the limits (art. 12). In addition to the CBE, the controlled offshore company goes on the assets and rights schedule of the income tax return, at the acquisition cost of the dividend credit receivable (art. 5, § 10, IV). The step-by-step is in how to declare an offshore company on the income tax return, and the annual compliance routine keeps the deadline from slipping by.

Which structures are most used to invest abroad?

For investment portfolios, the choice is usually between a holding in a jurisdiction such as the Cayman Islands or the British Virgin Islands and a US LLC. A holding in a favored-taxation jurisdiction falls under the annual regime of art. 5, § 5, I. A US LLC requires a double look: Brazilian law, which defines how profit is taxed here, and US law, which defines withholding and inheritance. For crypto, see cryptocurrencies and offshore structuring; for family continuity, the offshore trust has its own rules.

Which mistakes cost the most?

The first is assuming the offshore company defers tax. For a passive holding, the profit goes on the return on December 31, and anyone who does not set cash aside to pay the IRPF may be forced to redeem investments to cover the bill.

The second is buying US assets without looking at inheritance. The estate tax does not depend on whether the person lived in the US, but on where the assets are located and who holds them.

The third is forgetting the declarations. The CBE has its own reference date, deadline and threshold, and the annual regime requires the controlled entity's balance sheet in IFRS or in Brazilian accounting standards, at the taxpayer's choice, with the Brazilian standard mandatory when the company is in a favored-taxation country (art. 5, § 10, I).