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During the last years, Regulatory Affairs passed through a lot of changes in Brazil. Companies and the law had to talk about some difficulties to get the products that could not be manufactured in enough quantities to support the entire country to get access. Because of these difficulties, Local Representative services (or Hosting Services) were created.
Hosting Services allows a Brazilian company to hold products to get into Brazil through their licenses and their regulatory responsibility. It works mostly like a rent of company licenses. Opening a company in Brazil is not an easy task, specifically for non-Brazilian investors. The processes start with taking Brazilian personal documents, a task that is not easy even for Brazilian people, because of the size of the country and still growing every year. You must wait a few months to get personal documents and then choosing an accountancy and a law office in which you can trust, because their actions will demand some responsibilities with the law, some of them every month. After choosing the account office, they will prepare the Articles of Incorporation and pick what kind of company it will be. There are numeral codes for each activity that a company can develop, and it is the accountancy responsibility to pick the correct ones, so your company does not have to pay more taxes than the necessary.
After that, you will have to find a place to stablish your company. Every Brazilian state has different laws in terms of receiving imported products, some of them offers benefits and other can charge more taxes because they want to control the port access (it happens in touristic places, for example, they do not want to pollute their natural landscapes with ships full of products). A good accountancy will help you to choose the perfect place, because they know the local laws.
With defined site, documents done and investments ready, the company is opened. It starts with costs of getting the place ready to be used as a company, and in the future, it will be a licensed company, having to fill some standards to keep open and running. Then comes the expenses with furniture (rooms in Brazil does not come ready to work, you usually have to pay for all equipment, desks, chairs, office cabinet, and all you need to be in place to work. Otherwise, it is not possible to get company licenses using a coworking space.
Then we come to the monthly costs: rent, an employee to take care of the office, cleaning fees, fees for a graduated (in the most compatible area according to your products) technical responsible person, (and attaching your company to that person results in fees to be paid from the company to the professional local council), electric energy bill, internet, phone bill, condominium fee (common in office buildings), not mentioning the costs for a warehouse (which can be contracted, as long as it is licensed for storing your kind of products).
Let’s start the most important part of this comparison, Hosting Services are generally charged per year, and how important is for your project to know exactly what will be your costs for the next year? All these bills previously mentioned can not be exactly calculated before they happen. Cost security of the project is the main point of using hosting services. Usually, beyond the hosting fee, your company will have variable fees according to the product itself: how many products does your project will start working with? What are their risk classification? It can be determinative for calculating the public fees and also product registration fees. The first step is deciding what and how many products to start with, and then you will know the amount that your company will pay for having the products registered in Brazil, ready to be sold for the many companies that may be searching for them right now.
Benefiting both sides of the operation, Hosting Services are perfect for starting any project. If your operation gets so big that you are considering opening your own company, with a particular warehouse to receive the products and being able to deliver it more faster to the costumers, it is perfectly possible to decide for transferring the registers, no matter how much time has passed since the registration. Also, while waiting for the entire process of opening a company and passing through the processes and deadlines of company licensing and product registration, you can just keep working with the costumers you already have and keep selling to them, avoiding the time wasting while waiting for the end of processes being not able to sell.
Your company in Brazil with 2 costs: Hosting fee and Product Registration costs. No variables, no surprises, and selling operation on your side. You pick the distributors and Holder Company authorize them to import your products directly, negotiations of costs will be on your company also. Holder company has no percentual of costs in your operation.