Brazilian Immigration Council’s resolution on digital nomads: one year later

The Brazilian Immigration Council’s (CNIG) Resolution 45 has been in effect since January 24, 2022 (CNIG’s Resolution 45/2022), regulating temporary visa and residence permits for digital nomads working in Brazil.
This regulation has given foreigners greater flexibility to work for companies in other countries while providing their services from Brazil.

Brazil is one of the pioneers of digital nomad-related regulations in Latin America. Until November 2022, 57 foreigners – the majority of whom came from the United States, United Kingdom, and Russia – had moved to our country as digital nomads, working predominantly in the states of São Paulo and Rio de Janeiro.

In this regard, the Brazilian Federal Government has also been promoting events with the Ministry of Tourism, Ministry of Foreign Affairs, and immigration authorities in order to boost the number of digital nomads in Brazil.

Who is classified as a digital nomad in Brazil?

CNIG’s Resolution 45/2022 classifies digital nomads as any foreigner working remotely for foreign entities while residing in Brazil.

• However, as per the new regulation, a foreigner is not considered a digital nomad in the following cases:If the foreigner also provides services to Brazilian companies, with or without a formal employment (CLT) relationship; or
• If the individual’s residence permit is covered by other CNIG regulations (for instance, statutory officers or technicians are required to apply for a different visa and residence permit).

What are the requirements to work as a digital nomad in Brazil?

There are three main requirements to work as a digital nomad in Brazil:

• Foreigners must prove they are both capable and have all the necessary equipment to work remotely.
• Foreigners must prove that they have a relationship solely with a foreign entity, either by means of an employment or service agreement. As such, they must have a formal agreement signed with the company abroad; and
  Foreigners must prove that they have sufficient finances to remain in Brazil, defined as either a minimum monthly income of USD 1,500 (BRL 7,860 as per the Brazilian Central Bank exchange rate on December 20, 2022) or the equivalent of at least USD 18,000 (BRL 94,320) held in a Brazilian bank account.

CNIG’s Resolution 45/2022 also provides that the digital nomads are not permitted to be paid compensation or granted fringe benefits through a Brazilian company, but they must have valid healthcare insurance in Brazil.
Moreover, they cannot work for a Brazilian company.

Companies are susceptible to certain risks in the event the regulation is breached, including:

• Lawsuit arguing for the existence of a formal employment relationship in Brazil, which would require the company involved to pay all applicable Brazilian employment rights and benefits, such as the so-called ’13th salary’ and severance fund (FGTS);
• Cancelation of the digital nomad visa; and
• Assessments by immigration authorities, which may result in the company being ordered to pay fines ranging from BRL 100 (USD 19) to BRL 10,000 (USD 1,900) per non-compliant foreigner, as well as fines ranging from BRL 1,000 (USD 190) to BRL 1,000,000 (USD 190,000) as penalty against the company. These fines may increase in the event of repeated violations.

Key takeaways for companies

• The emergence of digital nomads is already an established global trend. Companies should take advantage of the new regulation for various reasons:
• Foreign companies may become a more attractive prospect for both potential and current employees interested in more flexibility for providing services to other companies abroad;
• CNIG’s Resolution 45 may mitigate labor and immigration risks if employees of foreign companies choose to provide services as digital nomads while residing in Brazil;
• Digital nomads have the potential to offer qualified services to more diverse locations around the world; and
• Global mobility creates new opportunities in Brazil and abroad.

The provisions of CNIG’s Resolution No. 45 do not apply to Brazilians working as digital nomads abroad.

For further information on regulations for digital nomads in Brazil, please contact Mattos Filho’s Labor & Employment practice area.