Countries › Brazil › Guide › 10. Capital markets and finance › Investment funds and private equity (FIP) in Brazil: structure, CVM registration and tax for foreign investors

Investment funds and private equity (FIP) in Brazil: structure, CVM registration and tax for foreign investors

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

Brazilian funds are special condominiums regulated by the CVM under Resolução CVM nº 175, can limit each investor's liability to the quotas subscribed and can split into classes with segregated assets. Registration is automatic on filing, but a class must keep at least R$1 million of daily net assets after 90 days. Since the 2023 fund tax reform most local funds pay periodic withholding each May and November, but foreign investors are outside that regime: they pay 15 percent (10 percent in equity funds) when they redeem, and zero in qualifying private equity funds unless they sit in a tax haven.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.3346 per US dollar for 27 October 2026. Conversions are for orientation only.

Key facts

Investor liability can be limited to quotas subscribed	Yes, if the fund rules provide Civil Code art. 1.368-D I, as of 2026-10-27 · in force
Minimum daily net assets per class after the first 90 days	1000000 BRLResolução CVM nº 175 art. 8 § 3, as of 2026-10-27 · in force
Withholding on fund income for foreign investors (general)	15 %Lei nº 14.754 art. 34, as of 2026-10-27 · in force
Withholding on equity fund (FIA) redemptions for foreign investors	10 %Lei nº 14.754 art. 34 § 1, as of 2026-10-27 · in force
Tax on FIP income and gains for foreign investors (non tax haven)	0 %Lei nº 11.312 art. 3, as of 2026-10-27 · in force
Periodic May and November withholding on resident fund investors	15 % (20% short term funds)Lei nº 14.754 art. 17, as of 2026-10-27 · in force

The rule

1. An investment fund is a pool of resources organized as a special condominium to invest in financial assets, goods and rights of any kind, regulated by the CVM. Registration of the fund's rules with the CVM is enough for publicity and effects against third parties. The rules may limit each investor's liability to the value of its quotas, limit service providers' liability to their own duties, and create classes of quotas with segregated assets that answer only for their own obligations.Lei nº 10.406 of 10 January 2002 (Civil Code), arts. 1.368-C to 1.368-E as added by Lei nº 13.874 of 20 September 2019, Art. 1.368-C caput and § 3; art. 1.368-D caput, items I to III and § 3; art. 1.368-E, 2019-09-20 official text · verified 2026-10-27

2. A fund is created by joint decision of the essential service providers (administrator and manager), who approve its rules. It may only operate after CVM registration, granted automatically when the administrator files the documents electronically, and each class needs its own registration. A class whose daily net assets stay below R$1,000,000 for 90 consecutive days, after its first 90 days, must be liquidated or merged.
Cost to do it: No CVM review fee for registration in the rule itself; administrator, manager, custodian and auditor fees are contractual, and the CVM supervision fee applies to public offerings of quotas.Resolução CVM nº 175 of 23 December 2022, as amended, Arts. 4, 5, 7 and 8 §§ 1 to 3, 2022-12-23 official text · verified 2026-10-27

3. The rules may limit each investor's liability to the amount subscribed. If they do not, investors answer for any negative net equity, while service providers answer only for losses caused with intent or bad faith.Resolução CVM nº 175, art. 18, Art. 18 caput and sole paragraph, 2022-12-23 official text · verified 2026-10-27

4. For resident investors, income from funds is withheld on the last business day of May and November (the come cotas) at 15 percent, or 20 percent in short term funds, with a top up to the full rate on distribution, amortization or redemption. Private equity funds (FIP), equity ETFs and receivables funds (FIDC) that qualify as investment entities, and equity funds (FIA), are taxed only on distribution, amortization or redemption at 15 percent.Lei nº 14.754 of 12 December 2023, Arts. 17 caput and § 1; 18; 24, 2023-12-12 official text · verified 2026-10-27 · changed: Lei nº 14.754/2023 extended periodic May and November withholding to closed funds from 2024 and created the investment entity regime for FIP, FIDC, ETF and FIA.

5. Foreign investors entering under CMN rules pay 15 percent withholding on fund income at distribution, amortization or redemption, 10 percent on redemptions of equity funds (FIA), and are not subject to the May and November periodic withholding. This regime does not apply to residents of favored tax jurisdictions.
Example: Gain of R$1,000,000 on redemption: R$150,000 withheld in a general fund, R$100,000 in an FIA. / On US$187,455 of gain: US$28,118 or US$18,746.Lei nº 14.754 of 12 December 2023, Art. 34 caput and §§ 1, 2 and 4, 2023-12-12 official text · verified 2026-10-27

6. Income and capital gains of foreign investors in private equity funds (FIP) and emerging company funds that invest under CMN rules are taxed at zero, also for quotaholders of infrastructure and innovation FIPs under Lei nº 11.478 and for sovereign funds even in favored jurisdictions. The zero rate does not apply to other quotaholders resident in favored tax jurisdictions. Lei nº 14.754 keeps these rules, as well as those for real estate and agribusiness funds (FII and Fiagro), outside its general regime.Lei nº 11.312 of 27 June 2006, art. 3 as amended by Lei nº 12.973/2014 and Lei nº 14.711 of 30 October 2023; Lei nº 14.754 art. 39, Art. 3 caput, §§ 3, 4 and 6 (Lei nº 11.312); art. 39, items I and III (Lei nº 14.754), 2023-10-30 official text · verified 2026-10-27 · changed: Lei nº 14.711 of 30 October 2023 repealed §§ 1 and 2 of art. 3 and added §§ 4 to 6, extending the zero rate to sovereign funds and excluding other tax haven residents.

Investor and fund	When taxed	Rate
Resident, general open or closed fund	May and November, top up on redemption	15 percent periodic (20 percent short term), then up to the full table rate
Resident, qualifying FIP, FIDC, ETF or FIA	Distribution, amortization or redemption	15 percent
Foreign (CMN regime), general fund	Distribution, amortization or redemption	15 percent
Foreign, FIA	Redemption	10 percent
Foreign, FIP or FIEE (non tax haven)	Income and gains	Zero
Any regime, investor in a favored tax jurisdiction	Varies	Foreign investor regimes above do not apply

Fund taxation at a glance (Lei nº 14.754 and Lei nº 11.312)

Worked example

Exit from a private equity fund. A US pension fund invests through the CMN foreign investor regime in a Brazilian FIP and redeems with a gain of R$1,000,000 (US$187,455). Tax is zero under Lei nº 11.312 art. 3. Had it held an ordinary multimarket fund, 15 percent, R$150,000 (US$28,118), would be withheld on redemption (Lei nº 14.754 art. 34). FX conversion in and out is at zero IOF for portfolio investors (see Capital markets and finance). Investors from treaty countries, Argentina included, should check the Tax treaties page for how a treaty interacts with these domestic rates.

Step by step

1. Pick the fund category under Resolução CVM nº 175 (FIP for private equity, FIDC for receivables, FII for real estate, FIA for equities).
2. Hire the two essential providers, administrator and manager, who approve the fund rules and file for automatic CVM registration.
3. Decide on limited liability and on classes with segregated assets in the rules.
4. Foreign investors: register as non resident investors with a representative and custodian, then confirm the investment entity status and portfolio limits the zero or 15 percent rate depends on.
5. Keep each class above R$1,000,000 of daily net assets after the first 90 days.

Common traps

Forgetting the tax haven carve out. Residents of favored tax jurisdictions lose the foreign investor rates and the FIP zero rate (Lei nº 14.754 art. 34 § 4; Lei nº 11.312 art. 3 § 6), except sovereign funds for the FIP rule.
Assuming every FIP qualifies. The FIP must meet CVM allocation and investment entity requirements; otherwise resident investors fall into periodic or other taxation (Lei nº 14.754 arts. 20, 23 and 26).
Leaving liability unlimited. Without a limitation clause investors answer for negative net equity (Resolução CVM nº 175 art. 18).
Tiny classes. A class below R$1,000,000 of daily net assets for 90 days must be wound up or merged (art. 8 § 3).

Sources

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