Generally speaking, assuming a straightforward process how long does it take to pay a dividend?
1-2 weeks.
Any timing restrictions on paying dividends?
No, there are no timing restrictions for paying dividends in Brazil.
What accounts will be required to support payment of dividend and will these need to be audited?
The accounts required to support payment of a dividend should be dated as of the month of the distribution, no mandatory audit is required.
Are there restrictions on the amount of dividends that can be paid?
No, there are no restrictions on the amount of dividends that can be paid, provided that there are enough net profits to support the dividends or retained earnings, and/or profits reserves.
Are there any ways to increase reserves, and if so, how long do these generally take?
Yes, it is possible to increase reserves, mainly through the allocation of profits to such reserves.
Are foreign investment or other regulatory approvals required on payment of a dividend?
No regulatory approvals are required in connection with payment of a dividend, but the minutes / resolutions approving the dividend distribution must be registered with the Commercial Registry.
Are there any foreign exchange requirements on paying dividends to foreign parent companies?
Yes, a Brazilian foreign exchange currency agreement executed with the commercial bank will be required for remitting the funds to the foreign shareholders.
Can cash be borrowed to settle a dividend?
Yes, but the company must have the adequate profits in its balance sheet to allow for the distribution. Furthermore, this might have tax implications, so it needs to be analyzed on a case-to-case basis.
Are dividends in kind possible?
Yes, dividends in kind are possible, but need to be analyzed in a case-to-case basis.