Countries › Brazil › Guide › 4. Entities and setup › Sociedade em conta de participação (SCP) in Brazil: the unregistered joint venture, its tax status and reporting

Sociedade em conta de participação (SCP) in Brazil: the unregistered joint venture, its tax status and reporting

Last verified: 2026-10-27 · Status: Stable

The sociedade em conta de participação (SCP) is a contractual joint venture with no legal personality: an ostensive partner runs the business in its own name and alone answers to third parties, while participating partners share profits and losses. It needs no formalities and registering the contract does not create a legal person, but for tax purposes the SCP is treated as a company: it needs its own CNPJ, its results are computed separately, it files its own ECF, and its partners are reported as beneficial owners. It suits a foreign investor that wants to fund a defined project run by a Brazilian operator without forming a new company, provided it stays out of dealings with third parties, since a participating partner who joins those dealings becomes jointly liable for them.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the latest rate published when this page was verified. Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

SCP has legal personality	No Lei nº 10.406 art. 993, as of 2026-10-27 · in force
Formalities required to form an SCP	None Lei nº 10.406 art. 992, as of 2026-10-27 · in force
SCP must register in the CNPJ	Yes Instrução Normativa RFB nº 2.119 Annex I item XVIII, as of 2026-10-27 · in force
Income tax treatment of an SCP	Treated as a legal entity Decreto nº 9.580 (RIR/2018) art. 160, as of 2026-10-27 · in force
Separate ECF required for each SCP	Yes Instrução Normativa RFB nº 2.004 art. 1 § 3, as of 2026-10-27 · in force

The rule

1. Structure: in an SCP the business is carried on only by the ostensive partner, in its own name and under its sole responsibility, and the other partners share the results. Only the ostensive partner is bound to third parties; the participating partner is bound only to the ostensive partner under the contract.Lei nº 10.406 (Civil Code), Art. 991 and sole paragraph, 2002-01-10 official text · verified 2026-10-27

2. Formation and legal personality: an SCP needs no formalities to be formed and may be proven by any lawful means. The contract binds only the partners, and registering it in any registry does not give the SCP legal personality.
Cost to do it: No commercial registry fee is required to form an SCP; costs are the contract itself and the tax registrations below.Lei nº 10.406 (Civil Code), Art. 992; art. 993 caput, 2002-01-10 official text · verified 2026-10-27

3. Participating partner's limits: a participating partner may oversee the management of the joint business, but may not take part in the ostensive partner's dealings with third parties; if it does, it becomes jointly liable with the ostensive partner for the obligations in which it took part.Lei nº 10.406 (Civil Code), Art. 993 sole paragraph, 2002-01-10 official text · verified 2026-10-27

4. Special fund and insolvency: the contributions of the participating and ostensive partners form a special fund, but this separation only has effects between the partners. If the ostensive partner goes bankrupt the SCP is dissolved and the account liquidated, and any balance owed becomes an unsecured claim; if a participating partner goes bankrupt, the contract follows the bankruptcy rules on bilateral contracts.
Example: A foreign investor contributes R$5,000,000 to an SCP run by a Brazilian developer. If the developer becomes bankrupt, the investor's R$5,000,000 is not ring fenced from the developer's creditors: the investor only has an unsecured claim for the balance. / R$5,000,000 is about US$908,975.Lei nº 10.406 (Civil Code), Art. 994 §§ 1 to 3, 2002-01-10 official text · verified 2026-10-27

5. New partners and default rules: unless agreed otherwise, the ostensive partner may not admit a new partner without the express consent of the others. The rules on the simple partnership apply where compatible, liquidation follows the procedural rules on rendering of accounts, and where there are several ostensive partners their accounts are rendered and judged in the same proceeding.Lei nº 10.406 (Civil Code), Art. 995; art. 996 and sole paragraph, 2002-01-10 official text · verified 2026-10-27

6. Tax status: SCPs are treated as legal entities for income tax, and their results and the taxation of retained and distributed profits follow the rules for legal entities.Decreto nº 9.580 of 22 November 2018 (Income Tax Regulation, RIR/2018), based on Decreto-Lei nº 2.303 of 1986, art. 7, Art. 160; art. 161, 2018-11-22 official text · verified 2026-10-27

7. CNPJ: SCPs linked to their ostensive partners are among the entities that must register in the national legal entity registry (CNPJ).Instrução Normativa RFB nº 2.119 of 6 December 2022, Art. 4 and Annex I, item XVIII, 2022-12-06 official text · verified 2026-10-27

8. Tax bookkeeping: when the ostensive partner is a legal entity, a separate ECF (tax bookkeeping return) must be filed for each SCP, in addition to the ostensive partner's own ECF; the ECF is due by the last business day of July of the following year.Instrução Normativa RFB nº 2.004 of 18 January 2021, Art. 1 § 3; art. 3, 2021-01-18 official text · verified 2026-10-27

9. Beneficial owners: in an SCP the ostensive and participating partners are all treated as beneficial owners, whatever their share of the special fund, or the individuals who hold that position through them.Instrução Normativa RFB nº 2.119 of 6 December 2022, art. 53 § 4 as worded by Instrução Normativa RFB nº 2.290 of 30 October 2025, Art. 53 § 4, 2025-10-30 official text · verified 2026-10-27

Point	Ostensive partner (sócio ostensivo)	Participating partner (sócio participante)
Runs the business	Yes, in its own name (Civil Code art. 991)	No; may oversee management (art. 993)
Liable to third parties	Yes, alone (art. 991 sole paragraph)	No, unless it takes part in dealings with third parties (art. 993 sole paragraph)
Admits new partners	Only with express consent of the others, unless agreed (art. 995)	Consent right
Beneficial owner reporting	Yes (IN RFB nº 2.119 art. 53 § 4)	Yes, whatever its share
Tax filings	Its own ECF plus one ECF per SCP (IN RFB nº 2.004 art. 1 § 3)	Receives its share of results

Who is who in an SCP

Worked example

A Portuguese hotel group (participating partner) and a Brazilian operator (ostensive partner) sign an SCP contract to run a resort in Bahia; the group contributes R$5,000,000 (about US$908,975). No company is registered; the operator signs all contracts, employs the staff and alone answers to suppliers and guests (Civil Code arts. 991 and 992).
The SCP obtains its own CNPJ (IN RFB nº 2.119 Annex I item XVIII), its profit is computed and taxed as if it were a legal entity (RIR/2018 arts. 160 and 161), and the operator files a separate ECF for it by the last business day of July (IN RFB nº 2.004 arts. 1 § 3 and 3). Both partners are reported as beneficial owners (IN RFB nº 2.119 art. 53 § 4).
If a group executive negotiates a supply contract directly with a vendor, the group becomes jointly liable for that contract (art. 993 sole paragraph).

Step by step

1. Use an SCP for a defined project with a trusted Brazilian operator; use a Ltda. or S.A. if you need limited liability towards third parties, separate assets or an exit by share sale.
2. Write the contract: contributions, profit and loss sharing, oversight and information rights, admission of new partners, exit and liquidation.
3. Register the SCP in the CNPJ linked to the ostensive partner and set up separate accounts for its results.
4. File the e-BEF naming the partners and the individuals behind them as beneficial owners.
5. Each year, file the SCP's separate ECF and distribute results under the contract (see Taxes for the treatment of distributions).
6. Keep the participating partner out of negotiations and contracts with third parties.

Common traps

No asset protection on the operator's bankruptcy: the special fund separation works only between the partners, and the investor ends up with an unsecured claim (Civil Code art. 994).
Acting towards third parties: a participating partner who joins the ostensive partner's dealings becomes jointly liable for those obligations (art. 993 sole paragraph).
Thinking an unregistered SCP is off the tax radar: it is a taxpayer treated as a legal entity (RIR/2018 art. 160), needs a CNPJ and its own ECF.
Registering the contract does not create a company (art. 993); do not rely on registration for limited liability.
Admitting a new partner without everyone's express consent breaches the default rule (art. 995).

Sources

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