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FX and capital controls in Brazil: free convertibility, IOF costs and how to get dividends, loans and capital out

Last verified: 2026-10-25 · Status: Changing

Brazil has no capital controls in the classic sense: FX is free with no amount limits, and there is no approval to send dividends, interest or capital abroad, only proof that tax was paid. The real costs are IOF tax on the FX transaction (zero on dividends and capital return, 0.38 percent on investment inflows, 3.5 percent on short loans and most other outflows) and, from 2026, 10 percent withholding on dividends. The paperwork is Central Bank reporting in SCE-IED and SCE-Crédito, and from 1 October 2026 foreign invested companies may hold foreign currency accounts in Brazil.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.0377 per US dollar for 23 October 2026, the last business day before verification. Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

Dividend remittance abroad needs prior approval	No, free through an authorized FX institution with proof of tax paid Lei nº 14.286 arts. 2 and 22, as of 2026-10-25 · in force
Amount limits on FX transactions	None Lei nº 14.286 art. 2, as of 2026-10-25 · in force
Requirement to bring export proceeds into Brazil	None, may be kept abroad Lei nº 11.371 art. 1 as worded by Lei nº 14.286 art. 26, as of 2026-10-25 · in force
Withholding tax on dividends remitted abroad (profits from 2026)	10 %Lei nº 9.249 art. 10 § 4, inserted by Lei nº 15.270, as of 2026-10-25 · in force
IOF on FX for remittance of dividends and JCP to foreign investors	0 %Decreto nº 6.306 art. 15-B XIII, as of 2026-10-25 · in force
IOF on FX for return of foreign direct investment	0 %Decreto nº 6.306 art. 15-B XVII-A, as of 2026-10-25 · in force
IOF on FX for other inflows, including direct investment capital	0.38 %Decreto nº 6.306 art. 15-B XXV, as of 2026-10-25 · in force
IOF on inflow of registered foreign loans with average term up to 364 days	3.5 %Decreto nº 6.306 art. 15-B XII, as of 2026-10-25 · in force
IOF on inflow and outflow of foreign loans with average term over 364 days	0 %Decreto nº 6.306 art. 15-B XI, as of 2026-10-25 · in force
IOF on FX for other outflows not exempt or listed	3.5 %Decreto nº 6.306 art. 15-B XXIV, as of 2026-10-25 · in force
External loan amount that triggers SCE-Crédito reporting	1000000 USDResolução BCB nº 278 art. 23 I, as of 2026-10-25 · in force
Transfer amount that triggers SCE-IED reporting	100000 USDResolução BCB nº 278 art. 32 I, as of 2026-10-25 · in force
Cash that may be carried across the border without proof	10000 USDLei nº 14.286 art. 14 § 1, as of 2026-10-25 · in force
Foreign currency accounts for companies with direct non resident equity	Allowed from 1 October 2026 Resolução BCB nº 277 art. 70 XIV, inserted by Resolução BCB nº 575, as of 2026-10-25 · in force
Banco Central do Brasil PTAX selling rate, reais per US dollar	5.0377 BRLBanco Central do Brasil PTAX, as of 2026-10-23 · in force

The rule

1. FX transactions may be carried out freely with no limit on amount, and the exchange rate is freely agreed between the authorized institution and its client. Every FX transaction must go through an institution authorized by the Central Bank. There is no prior approval to bring in or send out money; the client is responsible for classifying the purpose of each transaction.
Cost to do it: No government fee for the FX contract itself. The costs are IOF on the FX transaction (see the IOF rules below) and the bank's spread, which is freely negotiated under art. 2, sole paragraph.Lei nº 14.286 (FX and foreign capital framework), Art. 2, art. 3 and art. 4 § 2, 2021-12-29 official text · verified 2026-10-25

2. Remittances abroad of profits, dividends, interest, loan amortization, royalties and technical, scientific, administrative and similar assistance depend on proof that any income tax due was paid. The old remittance limits and registration conditions of Lei nº 4.131 arts. 1 to 8 and art. 9 §§ 1 to 3 were repealed.
Cost to do it: The cost is the withholding tax itself, paid before the FX contract is settled.Lei nº 4.131 of 3 September 1962, art. 9 as worded by Lei nº 14.286 art. 22; repeals in Lei nº 14.286 art. 28, XVIII, Lei nº 4.131 art. 9, 2021-12-29 official text · verified 2026-10-25 · changed: Lei nº 14.286 (effective one year after publication on 30 December 2021) rewrote Lei nº 4.131 art. 9 to keep only the tax payment condition and repealed the 1962 law's registration and remittance provisions.

3. From 1 January 2026, profits or dividends paid, credited, delivered, used or remitted abroad bear withholding income tax at 10 percent. Exempt: profits for calendar years up to 2025 whose distribution was approved by 31 December 2025 and that are paid on the terms of the approval act; and payments to foreign governments with reciprocity, sovereign funds and foreign pension entities. A non resident may opt for a credit when the company's effective IRPJ and CSLL rate plus the 10 percent exceeds the combined nominal rates.
Cost to do it: 10 percent of the gross dividend, withheld by the paying company in Brazil.
Example: Dividend of R$5,000,000 out of 2026 profits to a foreign parent: withholding R$500,000, net R$4,500,000 converted with zero IOF. / About US$992,516 gross, US$99,252 withheld, US$893,265 net at PTAX R$5.0377.Lei nº 9.249, art. 10 §§ 4 and 5 and art. 10-A, inserted by Lei nº 15.270 of 26 November 2025, Art. 10 § 4, § 5 and art. 10-A, 2025-11-26 official text · verified 2026-10-25 · changed: Lei nº 15.270 of 26 November 2025, in effect from 1 January 2026 (art. 8), ended the exemption that dividends sent abroad had enjoyed since 1996 and created the 10 percent withholding.

4. IOF on FX for direct investors: zero on remittances of dividends and interest on net equity (JCP) received by a foreign investor; zero on the return of funds a foreign investor applied in equity stakes in Brazil; zero on payments for imported goods (exempt); 0.38 percent on other inflows not listed, which includes capital brought in for direct investment.
Cost to do it: 0.38 percent of each capital inflow; zero on dividends, JCP and capital return.
Example: Capital injection of US$1,000,000 converted at R$5.0377: R$5,037,700 credited, IOF about R$19,143. / IOF of US$3,800 on a US$1,000,000 injection; zero on the later dividend and on the return of the capital.Decreto nº 6.306 (IOF regulation), art. 15-B as worded by Decreto nº 12.499 of 11 June 2025; art. 16, Art. 15-B, items XIII, XVII-A and XXV; art. 16, item I, 2025-06-11 official text · verified 2026-10-25 · changed: Decreto nº 12.499 of 11 June 2025 added item XVII-A (zero IOF on return of foreign direct investment) and item XXV (0.38 percent on other inflows). Congress suspended the decree by Decreto Legislativo nº 176 of 2025; on 16 July 2025 a Supreme Court (STF) injunction in ADC 96, issued ad referendum of the full court, restored it from 11 June 2025 except the rules on supplier finance (risco sacado).

5. IOF on foreign loans: zero on inflows and outflows of external loans and financing, except loans subject to Central Bank registration with a minimum average term of up to 364 days, whose inflow bears 3.5 percent. If a longer loan is prepaid before the minimum average term is met, the borrower owes the 3.5 percent with late interest and a fine.
Cost to do it: 3.5 percent of the principal for loans with an average term of 364 days or less; zero for longer loans held to term.
Example: US$2,000,000 intercompany loan for six months: IOF of about R$352,639 on inflow; for a two year loan, zero. / US$70,000 of IOF on the six month loan; zero if the average term is longer than 364 days.Decreto nº 6.306, art. 15-B as worded by Decreto nº 12.499 of 11 June 2025, Art. 15-B, items XI and XII, §§ 1 to 3, 2025-06-11 official text · verified 2026-10-25 · changed: Decreto nº 12.466 of 22 May 2025 and then Decreto nº 12.499 of 11 June 2025 changed item XII from 6 percent on loans of up to 180 days to 3.5 percent on loans of up to 364 days.

6. Other outflows: FX operations to transfer funds abroad that are not exempt and not listed elsewhere in art. 15-B bear IOF at 3.5 percent. Transfers by residents to place their own funds abroad bear 3.5 percent, or 1.10 percent when made for investment.
Cost to do it: 3.5 percent of the outflow where no specific rate or exemption applies.
Example: A residual outflow of US$100,000 converted at R$5.0377 bears IOF of about R$17,632. / US$3,500 of IOF on US$100,000.Decreto nº 6.306, art. 15-B as worded by Decreto nº 12.499 of 11 June 2025, Art. 15-B, items XXI, XXI-A and XXIV, 2025-06-11 official text · verified 2026-10-25 · changed: Item XXIV (3.5 percent residual rate on outflows) was created by Decreto nº 12.466 of 22 May 2025 and kept by Decreto nº 12.499; item XXI-A (1.10 percent) was created by Decreto nº 12.499.

7. External credit is free to contract and renegotiate in any currency, at costs compatible with international markets. It must be reported to the Central Bank in SCE-Crédito when a direct loan, financing or bond is US$1,000,000 or more; a financed import with payment term over 180 days is US$500,000 or more; or an export prepayment or financial lease over 360 days is US$1,000,000 or more. Terms must be declared before the funds enter Brazil and the payment schedule within 30 days. Payments are limited to principal, interest and charges, and unreported operations can be barred from transfers until fixed.
Cost to do it: No Central Bank fee is set in the resolution; the cost is compliance work and keeping documents for ten years after the operation ends (art. 4, sole paragraph).
Example: A US$2,000,000 loan from the foreign parent (about R$10,075,400): declare it in SCE-Crédito before disbursement, then the schedule within 30 days. / US$2,000,000 is over the US$1,000,000 threshold; a US$800,000 loan would not need SCE-Crédito reporting.Resolução BCB nº 278, as amended by Resoluções BCB nº 348/2023, 492/2025 and 575/2026, Arts. 5, 6, 7, 22, 23, 28 and 29, 2022-12-31 official text · verified 2026-10-25 · changed: Resolução BCB nº 575 of 18 June 2026, in force from 1 October 2026, reworded arts. 7, 23, 28 and 29 to cover payments by any means (including the new foreign currency accounts) and not only FX remittances.

8. Dividends, JCP and return of capital remitted through an FX contract are captured automatically by the Central Bank's SCE-IED system. If they are paid abroad, paid in reais in Brazil, capitalized or otherwise settled without an FX contract, the movement must be reported in SCE-IED within 30 days, when it is US$100,000 or more.
Cost to do it: No fee; the receiving company files through the Central Bank system.Resolução BCB nº 278, as amended by Resoluções BCB nº 348/2023 and 410/2024, Art. 32, items I and II; art. 35; art. 36, item VI, 2022-12-31 official text · verified 2026-10-25

9. From 1 October 2026, foreign currency deposit accounts in Brazil may be held by exporters of goods; private resident companies that owe external credit; companies in Brazil with direct non resident equity; and non resident companies that lend to residents or hold direct equity in a Brazilian company. Exporters' accounts may receive only export revenue and other funds from abroad. Accounts of debtors, investee companies and non residents may move only funds from external credit or direct investment and are subject to the foreign capital rules. Conversion to reais needs an FX contract; cash and cheques are barred. No FX contract is needed to move foreign currency into or out of these accounts. Holders must prove a live external credit or direct investment reported in SCE-Crédito or SCE-IED.
Cost to do it: No regulatory fee is set; banks report balances and flows monthly to the Central Bank (Res. BCB 277 art. 80-A). Bank account fees are set by each bank.
Example: A foreign parent lends US$2,000,000 to its Brazilian subsidiary into the subsidiary's dollar account; IOF arises only if and when it is converted into reais, at the rate for the operation. / The subsidiary can repay the US$2,000,000 from the same account without a new FX contract, within the SCE-Crédito schedule.Resolução BCB nº 277, art. 70 items XII to XVI and arts. 75-A and 75-B, and Resolução BCB nº 278, art. 3-A, inserted by Resolução BCB nº 575 of 18 June 2026, Res. BCB 277 art. 70, sole paragraph, arts. 75-A and 75-B; Res. BCB 278 art. 3-A, 2026-06-18 official text · verified 2026-10-25 · changed: Resolução BCB nº 575 of 18 June 2026, in force from 1 October 2026, opened foreign currency accounts to exporters, foreign invested companies, external debtors and their foreign parents and lenders. Before, the list was limited to sectors such as tourism, insurers, energy projects and oil and gas.

10. Payment in foreign currency of obligations enforceable in Brazil is allowed only in listed cases, including foreign trade contracts and their financing, obligations where the creditor or debtor is non resident (except leases of real estate in Brazil), purchase and sale of foreign currency, and cases set by the National Monetary Council. Any other clause requiring payment in foreign currency is null.Lei nº 14.286, Art. 13 and sole paragraph, 2021-12-29 official text · verified 2026-10-25

11. Brazilian exporters of goods and services may keep their export revenue abroad in foreign currency instead of bringing it back.
Cost to do it: No repatriation requirement; export revenue that is brought in and converted bears zero IOF (Decreto nº 6.306 art. 15-B, item I).Lei nº 11.371 of 28 November 2006, art. 1 as worded by Lei nº 14.286 art. 26, Lei nº 11.371 art. 1, 2021-12-29 official text · verified 2026-10-25

12. Cash may be carried into or out of Brazil in person only up to US$10,000 or equivalent, unless the entry or exit is proven as the rules require. Breach leads to forfeiture of the excess to the National Treasury, applied by the Federal Revenue, plus any criminal penalties.
Cost to do it: Forfeiture of any amount above the limit if undeclared.Lei nº 14.286; art. 14 § 4 reworded and § 5 inserted by Lei nº 14.651 of 2023, Art. 14, §§ 1, 3 and 5, 2021-12-29 official text · verified 2026-10-25

Flow	IOF rate	Rule
Capital inflow for direct investment	0.38 percent	Art. 15-B XXV
Foreign loan inflow, average term up to 364 days	3.5 percent	Art. 15-B XII
Foreign loan inflow or repayment, longer term	Zero	Art. 15-B XI
Dividends and JCP to a foreign investor	Zero	Art. 15-B XIII
Return of foreign direct investment	Zero	Art. 15-B XVII-A
Portfolio investment in financial and capital markets, in and out	Zero	Art. 15-B XVI and XVII
Export revenue brought into Brazil	Zero	Art. 15-B I
Payment for imported goods	Exempt	Art. 16 I
Other outflows not exempt or listed	3.5 percent	Art. 15-B XXIV

IOF on FX for the flows a foreign investor uses most (Decreto nº 6.306 art. 15-B as worded by Decreto nº 12.499 of 11 June 2025, and art. 16).

Operation	Threshold	Deadline	Rule
Direct loan, financing or bond	US$1,000,000 or more	Terms before the inflow; payment schedule within 30 days	Arts. 23 I, 28 and 29
Financed import over 180 days	US$500,000 or more	Within 30 days of customs clearance	Arts. 23 II and 29
Export prepayment or financial lease over 360 days	US$1,000,000 or more	Terms before the inflow; schedule within 30 days	Arts. 23 III, 28 and 29
Direct investment transfer	US$100,000 or more	Captured automatically from the FX contract	Arts. 32 I and 35
Dividend, JCP or capital paid without an FX contract	US$100,000 or more	Within 30 days	Arts. 32 II and 36 VI

Central Bank reporting for foreign capital (Resolução BCB nº 278).

Worked example

Dividend out under the 2026 rules. A Brazilian subsidiary declares R$5,000,000 of dividends from 2026 profits to its foreign parent (about US$992,516). It withholds 10 percent, R$500,000 (about US$99,252), pays it and keeps proof (Lei nº 9.249 art. 10 § 4; Lei nº 4.131 art. 9). The bank settles the FX contract for R$4,500,000 (about US$893,265) with zero IOF (Decreto nº 6.306 art. 15-B XIII), and SCE-IED captures the remittance automatically (Resolução BCB nº 278 art. 35). Whether the parent can credit the 10 percent at home depends on its country's rules and any tax treaty (see Tax treaties).
Short or long loan. The same parent wants to fund the subsidiary with US$2,000,000 (about R$10,075,400). A six month loan bears IOF of 3.5 percent on inflow, US$70,000 (about R$352,639) (art. 15-B XII). A loan with an average term over 364 days bears zero (art. 15-B XI), but prepaying it before that term triggers the 3.5 percent plus late interest and a fine (art. 15-B § 2). Either way the loan is over US$1,000,000 and must be declared in SCE-Crédito before the money arrives (Resolução BCB nº 278 arts. 23 and 28).
Equity in, equity out. A US$1,000,000 capital injection (R$5,037,700) bears IOF of 0.38 percent, US$3,800 (about R$19,143) (art. 15-B XXV). If the parent later recovers that capital through a capital reduction or sale to a resident, the FX for the return bears zero IOF (art. 15-B XVII-A); capital gains tax, if any, is a separate question.

Step by step

1. Before the first transfer, register the foreign parent with a CNPJ, appoint its resident representative, and identify the investee and the investor in the Central Bank systems (see Start here).
2. Choose the funding mix. Equity costs 0.38 percent IOF on entry; a loan with an average term over 364 days costs zero; a shorter loan costs 3.5 percent (Decreto nº 6.306 art. 15-B XI, XII, XXV).
3. For a loan of US$1,000,000 or more, declare its terms in SCE-Crédito before disbursement and the payment schedule within 30 days, and keep contracts for ten years after it ends (Resolução BCB nº 278 arts. 4, 23, 28, 29).
4. Sign the FX contract with an authorized bank, classify the purpose correctly, and negotiate the spread; there is no official rate you are bound to (Lei nº 14.286 arts. 2 and 4).
5. From 1 October 2026, consider a foreign currency account for the Brazilian company or the foreign parent to hold loan or investment funds in dollars and convert only when needed; the bank will ask for proof that SCE-Crédito or SCE-IED is up to date (Resolução BCB nº 277 arts. 70 and 75-B; Resolução BCB nº 278 art. 3-A).
6. To pay dividends, approve them, withhold 10 percent for profits from 2026, pay the tax, then remit with zero IOF (Lei nº 9.249 art. 10 § 4; Decreto nº 6.306 art. 15-B XIII). Profits for 2025 or earlier approved by 31 December 2025 go out with no withholding if paid as approved (art. 10 § 5).
7. Report within 30 days any dividend, JCP or capital movement of US$100,000 or more that did not go through an FX contract, and file the periodic SCE-IED declarations that apply to the company's size (Resolução BCB nº 278 arts. 32, 36, 38 to 41).

Common traps

Assuming the old exemption still applies. Dividends from 2026 profits sent abroad bear 10 percent withholding; only 2025 and earlier profits approved by 31 December 2025 and paid on the original terms stay exempt (Lei nº 9.249 art. 10 §§ 4 and 5).
Funding with short loans. A registered loan with an average term of 364 days or less bears 3.5 percent IOF on entry, and prepaying a longer loan early triggers the same rate plus interest and a fine (Decreto nº 6.306 art. 15-B XII and § 2).
Forgetting SCE-Crédito. A loan of US$1,000,000 or more must be declared before the money enters; until reporting is fixed the Central Bank can bar the related transfers, including repayment (Resolução BCB nº 278 arts. 22, 23 and 28).
Paying a dividend abroad without an FX contract and not reporting it. Payments made abroad, in reais in Brazil or by capitalization are not captured automatically and must be reported within 30 days when US$100,000 or more (Resolução BCB nº 278 art. 36).
Using the new dollar accounts as general treasury accounts. Accounts of foreign invested companies and their foreign parents may move only external credit and direct investment funds, with no cash or cheques (Resolução BCB nº 277 art. 75-B).
Writing dollar clauses into local contracts. A foreign currency payment clause outside the cases in Lei nº 14.286 art. 13, for example a lease of property in Brazil, is null.
Treating the IOF rates as settled. The 2025 increases were restored by an STF injunction in ADC 96 on 16 July 2025, issued ad referendum of the full court, and IOF rates can be changed by decree; check the rate in force on the date of each FX contract.
Mirroring Argentine practice. For flows between Brazil and Argentina, Brazil's side runs on the free regime above; the Argentine leg follows Argentina's own FX rules, which differ, so plan each side separately (see The Argentine Thread guide).

Sources

Related: Brazil country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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