Brazilian LTDA vs. SLU: which company type should a foreign investor choose?
Guilherme Chambarelli
Published on
3 min read
In this article
For most foreign investors, the choice comes down to two vehicles: the LTDA (limited liability company with two or more quotaholders) and the SLU (single-member limited liability company). Both limit liability to the capital invested and can be wholly foreign-owned. The SLU is simpler when there is one parent company; the LTDA is the natural choice when there are partners, a local co-investor or plans to bring in shareholders soon.
Key points
- Both LTDA and SLU are limited liability companies under the Brazilian Civil Code.
- The SLU has a single quotaholder, which can be a foreign company or individual.
- There is no legal minimum share capital for either type, except in regulated sectors.
- Foreign quotaholders need a Brazilian tax ID and a resident attorney-in-fact.
- Converting an SLU into an LTDA later is simple: you admit a new quotaholder by amendment.
What is an SLU?
Since the Economic Freedom Law of 2019, Brazilian law allows a limited liability company with a single quotaholder. In 2021, the old EIRELI model was abolished and existing EIRELIs became SLUs. Today, the SLU is the most common vehicle for a foreign parent company that wants a 100%-owned subsidiary without a second partner.
What is an LTDA?
The LTDA is the classic Brazilian limited company. It has two or more quotaholders, articles of association registered with the state Board of Trade (Junta Comercial) and flexible governance. It is the format most Brazilian businesses use and is well understood by banks, landlords and suppliers.
LTDA vs. SLU: side-by-side comparison
| Topic | SLU | LTDA |
|---|---|---|
| Number of quotaholders | One | Two or more |
| Liability | Limited to the capital | Limited to the capital (jointly until fully paid in) |
| Decision-making | Sole quotaholder decides | Quorums set by law and by the articles |
| Need for a shareholders’ agreement | Not applicable | Highly recommended |
| Typical use | Wholly owned subsidiary | Joint ventures and companies with partners |
Which requirements apply to foreign quotaholders?
A foreign individual needs a CPF; a foreign company needs a CNPJ registration as a non-resident shareholder. In both cases, Brazilian rules require an attorney-in-fact resident in Brazil, with powers to receive service of process and represent the quotaholder before the tax authorities. Foreign documents must usually be apostilled and translated by a sworn translator.
The company also needs an administrator. Board of Trade rules generally require the administrator of an LTDA to be domiciled in Brazil, which is why many foreign groups appoint a local manager or a trusted professional while the operation starts. This point should be checked against the current registry rules before incorporation.
Foreign capital invested in the company must be reported to the Central Bank of Brazil under the foreign exchange framework of Law 14,286/2021.
Is one option cheaper or faster?
Set-up costs and timing are similar. What really drives cost and time is the preparation of the foreign documents, the tax IDs and the municipal and state registrations required for the activity. A realistic timeline for a standard services company is a few weeks once the documents are ready.
When to choose each structure
- Choose the SLU when a single parent company or individual will hold 100% and no partner is expected in the short term.
- Choose the LTDA when there are two or more investors, a local partner, a management team receiving quotas or a joint venture.
- Consider an S.A. (corporation) if you plan to raise institutional capital, issue different classes of shares or eventually go public.
Frequently asked questions
Can a foreign company own 100% of a Brazilian company?
Yes. Outside a few regulated sectors, there is no requirement for a Brazilian partner. An SLU wholly owned by the foreign parent is a common structure.
Is there a minimum capital requirement?
Not for LTDAs and SLUs in general. Specific sectors, such as financial services, and immigration rules for investors may require minimum amounts.
Can an SLU later receive new partners?
Yes. Admitting a new quotaholder turns the SLU into a multi-member LTDA through an amendment to the articles of association. At that point a shareholders’ agreement becomes important.
Does the choice change taxation?
No. LTDAs and SLUs are taxed the same way. The tax regime (Lucro Presumido, Lucro Real or, in limited cases, Simples Nacional) is a separate decision.
How Chambarelli Advogados can help
Our Foreign Desk structures market entry for foreign companies and investors, from the choice of vehicle to registrations, tax set-up and governance. Book a meeting to discuss your project with one of our partners.
Informational content, updated October 2026. It does not replace advice on your specific case.
