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Fintech Market Overview

This article does not constitute legal advice.

Cross-border payments in Brazil

Fintech Software

Basically, the Brazilian legislation does not put the offering of finantech products or services out of the legal framework, however, it regulates them the manner in which specific transactions need to be carried out. That is why it is recommended that one should comprehend the nature of the service or product being marketed by the fintech body in order to verify whether there are any provisions to be met to enable foreign resident to conduct their activities within Brazil.1

Any activity carried out within the territory of Brazil is primarily to be regulated by national legislation. Nevertheless, some international authorities' regulations might be benchmarks for the national regulations, as Brazilian authorities are integrated into a variety of transnational bodies, such as the Basel Committee on Banking Supervision and the International Organization of Securities Commissions. Legal initiatives that have recently been introduced are also take into account international experience, such as the Investment-based Crowdfunding Rule (CVM Rule No. 588/2017), which is rooted in the regulatory framework adopted in Israel, France, the United Kingdom, the United States, Portugal and Canada, among others.2

Some activities are not fully attainable for financial bodies, such as banks. They are, for instance, the custody of third-party funds and the intermediation and application of their own or third-party financial funds. As for these cases, it should meet the banking regulative provisions in the entity's resident country, which identifies that foreign banks are allowed to operate in Brazil in case they are legalized by BACEN and evidently authorized by a decree issued by the President of the Republic.1

As for other cases, if the fintech offer any securities-related products or render any relevant services, its activities are to be regulated by CVM provisions.1

Eventually, the incoming and outgoing money to and from Brazil is legal, as natural persons and corporations are free to transfer funds abroad and invest them to any nature offshore. This type of transactions shall be effected through bodies legalized by BACEN for carrying out transactions in the foreign exchange market. The aforesaid bodies are to be supervised by the Brazilian financial authorities and, therefore, shall meet know-your-customer and anti-money laundering restrictions incorporated into Brazilian legislation, including identification of the ultimate beneficial stakeholder of the corporate structure.1

Fintech in Brazil

Fintech in other countries

Notes
  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/brazil
  2. http://www.bcb.gov.br/Pom/Spb/Ing/InstitucionalAspects/TheRoleFinancialIntermediaries.asp
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