Once you have decided to focus on Brazil, the most practical question follows: in what form should you be present? Sell from Italy, rely on a distributor, or set up a local company? There is no one-size-fits-all answer. The choice depends on your product, expected volumes, how much control you want over the market and the resources you are willing to invest.
In this article we compare the main options for Italian companies, with their advantages, limits and key points to watch.
1. Direct export from Italy
You sell directly to Brazilian customers, who handle the import. It is the simplest and least expensive way to start.
- Advantages: minimal investment, no local structure, useful for testing demand.
- Limits: the customer must be a registered importer and bear duties and taxes, which make the product more expensive; little control over final prices and positioning; hard to serve customers remotely and in Portuguese.
- Best for: first sales, niche products, established industrial customers.
2. Sales representative or distributor
A local partner promotes and sells your products. A representative (agent) works on commission and brings in orders that you invoice; a distributor buys, imports and resells at its own risk.
- Advantages: fast access to the partner’s sales network, low fixed costs, knowledge of the local market and import procedures.
- Limits: limited control over brand, prices and end customers; the partner may also handle other brands, sometimes competitors.
- Watch out: in Brazil, commercial representation is governed by a specific law (Law 4,886/1965) which, if the agreement is terminated without just cause, entitles the representative to compensation of at least 1/12 of all commissions earned over the whole relationship, in addition to notice. Contracts, exclusivity and exit clauses therefore need to be defined carefully from the start.
- Best for: companies wanting to grow with limited investment and a product that is easy for third parties to handle.
3. Brazilian subsidiary (LTDA)
You set up a company under Brazilian law, usually a sociedade limitada (LTDA), which can also have a single shareholder. It is the most common form among foreign companies.
- Advantages: full control over sales, prices and customers; it can import, invoice locally, hire staff and take part in tenders; liability limited to capital; greater credibility with customers and suppliers.
- Limits: higher fixed costs; complex accounting and tax compliance; incorporation takes a few months.
- Main requirements: at least one administrator resident in Brazil; for foreign shareholders, registration with the Brazilian tax registry (CNPJ or CPF) and appointment of a local attorney-in-fact; registration of the foreign investment with the Central Bank; choice of tax regime (for example lucro real or lucro presumido).
- Best for: companies with significant volumes, manufacturing or technical service projects, or those wanting to manage the market directly.
4. Branch of a foreign company
An Italian company can open a branch in Brazil, but it is rarely done: it requires prior authorisation from the federal government, takes a long time and makes the parent company directly liable for the branch’s obligations. For tax purposes, a branch is also treated much like a local company. For these reasons, an LTDA is preferable in most cases.
5. Joint venture with a Brazilian partner
You set up a company together with a local business, sharing investment, risks and results.
- Advantages: immediate access to the partner’s customers, network, facilities and market knowledge.
- Limits: more complex governance, possible strategic disagreements, need for very clear shareholder agreements (including the exit route).
- Best for: industrial projects, regulated sectors or tenders where having a local partner is a competitive advantage.
Comparison at a glance
| Model | Investment | Control | Risk | Complexity |
|---|---|---|---|---|
| Direct export | Low | Low | Low | Low |
| Representative / distributor | Low | Medium-low | Medium | Low |
| Subsidiary (LTDA) | High | High | Medium | High |
| Branch of a foreign company | High | High | High | Very high |
| Joint venture | Medium-high | Shared | Medium | High |
How to choose
Before deciding, ask yourself:
- What sales volumes do you expect in the first three years?
- How important is it to control your brand, prices and customers directly?
- Does your product require local installation, after-sales service or certification?
- What financial and management resources can you commit to the project?
Many companies take a gradual path: they start with export or a commercial partner and set up a company once volumes justify it. An intermediate solution is to rely on an existing operational structure in Brazil, which gives you a local presence without immediately bearing the cost of offices and staff.
How Gen Brasil can help
Gen Brasil helps Italian companies choose and set up the most suitable structure: from market analysis and feasibility studies to setting up and managing your branch within already operational facilities in Brazil, through to finding distributors, agents and joint venture partners. For a full overview of the entry stages, read How to enter the Brazilian market: a step-by-step guide for Italian companies.
Want to know which solution is right for your company? Contact us to request a no-obligation visit to your company.
This article is for information purposes only and does not constitute legal or tax advice. Regulations change frequently: always check the current requirements for your specific case.