How to Prepare for Your Move Abroad

The decision to establish residency abroad represents a significant change that goes far beyond immigration matters. While it is essential to evaluate the types of visas available—such as the Golden Visa, Investor Visa, or Green Card—it is equally crucial to consider the tax, regulatory, and estate implications that will affect your situation both in Brazil and in your destination country.

In this edition, William Heuseler, Global Head of Wealth Planning, explains how proper planning can help avoid future issues and ensure the protection of your assets during this international transition.

When leaving Brazil, there are specific obligations that must be strictly fulfilled. The first is to officially notify the Brazilian Federal Revenue Service (Receita Federal) of your departure, as well as inform your income sources, such as financial institutions, insurance companies, and employers. This notification is mandatory for those leaving permanently or temporarily for 12 consecutive months or more and must be submitted by February of the following year.

Subsequently, anyone who becomes a resident in another country must formalize this status through the Declaration of Definitive Departure, which must be submitted by May of the year following the departure or the characterization as a non-resident. It is important to note that in cases of dual residency or failure to notify the departure, authorities may determine tax residency based on the center of vital interests – a concept referring to the country with the most significant personal and economic ties, including work, family, investments, and assets.

Before moving, it is essential to conduct a comprehensive review of your estate structure to assess the tax implications of maintaining assets in Brazil as a non-resident, as well as in the destination country. This analysis should take into account International Tax Treaties to Avoid Double Taxation, which can provide greater legal certainty and tax efficiency.

Once this review is complete, several practical steps become necessary:

• Opening a Non-Resident Account (CNR) in Brazil to apply the specific tax treatment to financial investments held in the country;
• Appointing a legal representative (attorney-in-fact) in Brazil with powers to manage assets, collect rent, and act as a tax representative;
• Reviewing corporate structures if the non-resident holds shares in Brazilian companies, ensuring that all documentation is compliant.

It is crucial to adapt wills, estate planning instruments, and prenuptial agreements to reflect the new domicile and avoid conflicts regarding applicable law. Additionally, one must consider the potential inheritance tax in the destination country, which can vary significantly and reach up to 40% in some jurisdictions.

Given the complexity of all these aspects, it is advisable to work with legal professionals specialized in both Brazilian and international law. The joint efforts of these professionals are essential to ensure legal compliance, asset protection, and peace of mind throughout the relocation process.

Proper planning for establishing residency abroad requires a coordinated and specialized approach, taking into account all tax, regulatory, and estate elements involved in this important life transition.

To learn more, please contact your relationship team.