Companies in Brazil Archives

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International careers are increasingly common today, as professionals may establish themselves and contribute for years to Brazil’s social security system before moving to another country and continuing their careers under a different social security system. International mobility, however, highlights an issue that is often considered only when retirement approaches: what happens to the contributions made […]

/ By Drummond Advisors

International mobility, however, highlights an issue that is often considered only when retirement approaches: what happens to the contributions made in each country?

The answer is not always straightforward, as contributing to social security systems in different countries does not automatically result in the conversion or combination of those contributions into a single benefit.

Each country has its own requirements for granting and calculating retirement benefits, and the way each contribution period interacts with the other depends, among other factors, on whether an International Social Security Agreement is in place.

These agreements serve as instruments for coordinating and integrating the social security systems of different countries. Within the established rules, they may allow contribution periods completed abroad to be used to meet the requirements for eligibility for certain benefits.

Even so, the existence of an international social security agreement does not mean that contribution periods completed in the signatory countries will be automatically credited or combined. The use of these periods depends on an analysis of the conditions established in the applicable agreement and the specific rules of each country’s social security legislation, which continue to apply on a complementary basis. Accordingly, each country determines whether the applicable requirements have been met and, when appropriate, grants and pays the benefit for which it is responsible, in accordance with the agreement and its domestic legislation.

The Social Security Agreement Between Brazil and the United States

As an example, the Social Security Agreement between Brazil and the United States may, subject to certain criteria, allow a professional who has worked in both countries to use periods completed under one system, in certain circumstances, to meet the eligibility requirements for retirement benefits under the other system, even though each country applies its own social security rules to determine the rights and benefits owed.

Therefore, the existence of the agreement does not, by itself, mean that all contribution periods will be used in the most advantageous manner. It is from this perspective that international social security planning becomes particularly important.

Likewise, the possibility of receiving social security benefits from more than one country is one of the most valuable aspects of an international professional career.

Depending on the individual’s contribution history and whether the requirements of each system are met, a professional may be entitled to separate retirement benefits, granted and paid independently by the respective countries. In this context, a strategic analysis can not only determine whether contribution periods may be used, but also evaluate the alternatives available under each system, helping ensure that social security rights built over the course of an international career are properly identified and utilized. This may even allow for the receipt of both Brazilian and U.S. retirement benefits.

From this perspective, rather than analyzing retirement only when the benefit is about to be claimed, planning makes it possible to assess the professional’s entire contribution history in advance and understand how the systems involved interact, allowing different scenarios to be compared and helping identify the most appropriate strategy.

For Brazilians living abroad, for example, one of the key questions is whether maintaining social security contributions in Brazil is necessary or advisable. There is no single answer to this question. The decision depends on several factors, including contribution history, the insured individual’s age, the country where they work, the existence of a social security agreement, and the requirements that remain to be met to qualify for benefits.

In certain situations, continuing to contribute in Brazil may be relevant to meeting eligibility requirements or obtaining more favorable retirement conditions. In others, however, making contributions without prior analysis may represent a cost that does not necessarily result in a corresponding social security advantage.

Planning also involves reviewing social security records. In Brazil, for example, the National Social Information Registry (Cadastro Nacional de Informações Sociais or CNIS) contains essential data regarding employment relationships, contributions, and earnings considered by the National Social Security Institute (INSS). Reviewing these records makes it possible to identify and correct missing information, inconsistencies, or outstanding issues, helping mitigate the risk that such problems could affect either recognition of eligibility or the calculation of benefits. Advance review and correction are particularly important for professionals with international career histories.

Ultimately, international social security planning is not limited to determining when an individual will be able to retire. It involves understanding how contributions made in different countries, international agreements, and future contribution decisions can be strategically organized according to each professional’s circumstances and objectives.

In this context, conducting this analysis in advance creates greater opportunities to correct inconsistencies, evaluate alternatives, and direct future contributions efficiently for professionals who have built or intend to build an international career, providing greater predictability and security in retirement planning.

Written by Daniel Rangel and Juliana Lins

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Brazilians who worked and contributed to Brazil’s social security system (INSS) before moving to the United States often have questions about whether those contribution periods can be considered when applying for retirement benefits. Since 2018, the Brazil–U.S. Social Security Agreement has allowed, under certain circumstances, periods of coverage in both countries to be considered when […]

/ By Drummond Advisors

Since 2018, the Brazil–U.S. Social Security Agreement has allowed, under certain circumstances, periods of coverage in both countries to be considered when determining eligibility for social security benefits.

How Does It Work?

The agreement can help individuals who have not independently met the minimum eligibility requirements in Brazil or the United States.

However, it does not transfer contributions from one country to the other or combine the amounts paid to create a single retirement benefit. Each country:

reviews the claim according to its own laws;
calculates the benefit for which it is responsible; and
pays the corresponding amount.

Depending on an individual’s contribution history, they may be eligible for benefits paid by both Brazil and the United States. This does not, however, automatically mean they will receive two full retirement benefits.

Should I Continue Contributing to the INSS?

The answer depends on each individual’s circumstances.

Before continuing or resuming contributions in Brazil, it is important to assess:

how much time has already been contributed in each country;
whether the records in the CNIS are accurate;
which social security rules may apply;
whether it will be necessary to totalize contribution periods;
which contribution category is appropriate; and
whether making additional contributions could actually improve the benefit.

Contributing without proper planning may result in payments that do not produce the expected benefit.

Brazil–U.S. Social Security Planning

An integrated review of an individual’s INSS and Social Security history can help identify the applicable requirements, correct inconsistencies, and organize the necessary documentation.

The Drummond Advisors team is available to assist clients who worked in Brazil and currently live or work in the United States.

For more information about Brazil–U.S. Social Security Planning, contact our team.

Written by Daniel Rangel, Head of Labor Law at Drummond Advisors

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For a Brazilian company opening its first U.S. office, hiring American employees can feel deceptively simple compared to Brazil’s heavily codified labor system (CLT). There’s no equivalent of the carteira de trabalho, no single federal labor code governing every aspect of employment, and no 13º salário or mandatory FGTS deposits. But this apparent simplicity is misleading. U.S. employment law is fragmented, inconsistent across states, and largely built on unwritten […]

/ By Drummond Advisors

For a Brazilian company opening its first U.S. office, hiring American employees can feel deceptively simple compared to Brazil’s heavily codified labor system (CLT).

There’s no equivalent of the carteira de trabalho, no single federal labor code governing every aspect of employment, and no 13º salário or mandatory FGTS deposits.

But this apparent simplicity is misleading. U.S. employment law is fragmented, inconsistent across states, and largely built on unwritten expectations rather than a single statute.

An employee handbook is the tool that fills that gap and increases the employment relationships in US.

The U.S. Has No CLT — And That’s the Risk, Not a Relief

In Brazil, much of what protects both employer and employee is already written into national law. In the U.S., there is no single federal labor code. Employment law is a patchwork of:

Federal law (wage and hour rules under the FLSA, anti-discrimination law under Title VII, family/medical leave under the FMLA)

State law, which varies enormously — California, New York, and Texas each have different rules on overtime, meal breaks, paid sick leave, and termination

Local ordinances, since some cities impose their own minimum wage or scheduling laws on top of state and federal rules

Nothing tells a new employee — or a new employer — what the rules are unless someone writes it down. The handbook becomes the private substitute for the public code that doesn’t exist. Without one, a Brazilian parent company has no reliable way to make sure its U.S. subsidiary is operating within U.S. law, since there is no default rulebook to fall back on.

“Employment at Will” Is Unfamiliar — and Needs to Be Explained Carefully

One of the biggest conceptual differences from Brazilian labor law is employment at will. In most U.S. states, either the employer or the employee can end the employment relationship at any time, for almost any reason (or no reason), without notice or severance — a stark contrast to CLT’s aviso prévio, severance obligations, and just-cause requirements for termination.

This doesn’t mean a U.S. employer can do whatever it wants, however.

At-will employment has major exceptions: employers cannot fire someone for a discriminatory reason, in retaliation for a complaint, or in violation of a contract.

A handbook is where a company formally states it’s at-will policy and documents the legal boundaries around it — which protects the company from being accused of acting arbitrarily or unlawfully, while making the flexibility of the U.S. system clear to a Brazilian management team used to more rigid rules.

U.S. Employment Disputes Are Driven by Documentation

Brazilian labor courts (Justiça do Trabalho) tend to rely on statute and established precedent to resolve disputes. In the U.S., outcomes are heavily driven by what a company can prove it told employees and how consistently it enforced its own rules. In a wrongful termination claim, a discrimination complaint, or a wage dispute, the first thing an agency or opposing attorney typically requests is the employee handbook and the signed acknowledgment that the employee received it.

A foreign parent company without a handbook — or with one copy-pasted from its Brazilian policies — is often unable to show it applied consistent, compliant policies.

That gap is exactly what create risks for the Company.

It Prevents Costly Missteps From Assuming Brazilian Practices Apply

Many Brazilian companies unintentionally import CLT-style assumptions into their U.S. operations — for example, assuming a “trial period” works the same way, or that severance/notice periods are legally required, or that a 40-hour week automatically qualifies an employee for the same overtime protections as in Brazil.

U.S. wage-and-hour law (overtime eligibility, exempt vs. non-exempt classification, meal-and-rest-break rules) works entirely differently and varies by state.

A handbook forces the company to research and create policies that reflect U.S. — and the specific state’s — requirements, rather than defaulting to what feels familiar.

It Builds Trust With U.S. Employees and Regulators

American employees generally expect a handbook as a normal part of onboarding — it’s read as a sign of a stable, well-run employer.

Its absence can raise questions regarding the understanding from the Company side about operate in U.S.

A clear, professionally prepared handbook signals that the U.S. entity is operating on equal footing with domestic competitors, not treating its American office as an afterthought.

The Bottom Line

For a Brazilian company entering the U.S. market, an employee handbook isn’t just good HR practice — it’s the primary way to translate an unfamiliar, decentralized legal system into a concrete, enforceable set of internal rules.

This article is for general informational purposes and does not constitute legal advice. Because U.S. employment law varies significantly by state, companies expanding into the U.S. should work with a U.S. employment attorney — ideally one experienced with foreign parent companies — to draft a handbook tailored to the specific state(s) where they operate.

Written by Daniel Rangel and Vicky Alvarez Phillips

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Brazil’s Tax Reform has entered a new phase of implementation. Following the enactment of Constitutional Amendment No. 132/2023 and the publication of Complementary Law No. 214/2025, companies are already preparing for a transition period that will fundamentally transform how consumption taxes are assessed, reported, and collected. Although many of the changes will be implemented gradually […]

/ By Marcos Ferreira

Although many of the changes will be implemented gradually through 2033, several strategic decisions need to be made now. For Brazilian companies expanding internationally and foreign groups operating in Brazil, the Tax Reform represents much more than a legislative change: it requires a review of processes, corporate structure, technology, compliance, and tax planning.

In this article, we explain the key updates introduced by Brazil’s Tax Reform and how they impact companies operating globally.

What Changed Under Brazil’s Tax Reform?

The main objective of the reform is to simplify Brazil’s consumption tax system by replacing several existing taxes with a model similar to the Value-Added Tax (VAT) used in many countries.

The main changes include:

the gradual replacement of PIS, Cofins, ICMS, ISS, and part of IPI;
the creation of the Contribution on Goods and Services (CBS), a federal tax;
the creation of the Tax on Goods and Services (IBS), administered by states and municipalities;
the introduction of the Selective Tax (IS), levied on products considered harmful to health or the environment;
the adoption of destination-based taxation, reducing tax disputes between states.

For multinational companies, this new model brings Brazil closer to international tax practices, but it also requires adjustments to new tax assessment and compliance rules.

Implementation Timeline: What Happens Over the Next Few Years?

The reform will be implemented gradually.

Key milestones include:

2026: Testing Begins

Companies will enter a testing period for CBS and IBS, allowing them to make operational adjustments before effective collection begins.

2027: CBS Takes Effect

CBS begins replacing PIS and Cofins, requiring adjustments to systems, billing processes, and internal controls.

2029 to 2032: ICMS and ISS Transition

IBS will gradually replace state and municipal taxes, progressively reducing the application of ICMS and ISS.

2033: New System Fully Implemented

At the end of the transition period, CBS and IBS will form the core of Brazil’s new consumption tax system.

How Does the Tax Reform Impact International Companies?

Foreign companies often focus on corporate and labor considerations when entering Brazil. However, indirect taxation can represent one of the biggest operational challenges.

Under the reform, several changes deserve particular attention.

Greater Alignment With International Standards

Companies accustomed to operating in countries that use VAT-based systems will encounter a system that is more closely aligned with international practices.

This could facilitate:

integration of global processes;
accounting consolidation;
comparison of financial indicators;
international tax planning.

Supply Chain Review

Destination-based taxation changes the dynamics of many commercial operations.

Companies will need to review:

distribution centers;
interstate operations;
logistics agreements;
pricing strategies.

This analysis may generate significant operational efficiency gains.

Technology Adaptation

The reform will require updates to ERP systems, tax platforms, and tax document issuance systems.

Companies operating across multiple countries will need to ensure that their systems can simultaneously comply with Brazilian requirements and international reporting standards.

New Compliance Requirements

The transition will temporarily increase operational complexity.

For several years, companies will need to manage two tax regimes simultaneously.

This will require:

robust internal controls;
ongoing monitoring of legislation;
employee training;
integration among tax, accounting, finance, and legal teams.

The Impact on Brazilian Companies Going International

Brazil’s Tax Reform also affects Brazilian companies planning to expand their operations abroad.

International investors tend to assess factors such as:

tax predictability;
quality of corporate governance;
operational efficiency;
regulatory risks.

Companies that begin adapting to the new model now may demonstrate greater management maturity during due diligence processes, fundraising, and international expansion.

How Does the Tax Reform Affect M&A Transactions?

Mergers and acquisitions will also require additional analysis.

During due diligence processes, it will become increasingly important to assess:

tax contingencies related to the transition period;
adaptation of tax systems;
existing tax credits;
contractual impacts resulting from the change in tax regime.

Companies that anticipate this planning may reduce risks during future negotiations.

Technology Will Be a Competitive Advantage

The implementation of the reform reinforces the importance of digital transformation in tax management.

Tax automation tools, artificial intelligence, and data integration will play an increasingly strategic role in tax management.

Key benefits include:

reduced operational errors;
greater data traceability;
automated generation of ancillary tax obligations;
continuous monitoring of legislative changes;
improved corporate governance.

For multinational groups, integration between Brazilian systems and global platforms will be a decisive factor in ensuring compliance.

How Drummond Advisors Can Support Your Company

The Tax Reform requires a multidisciplinary approach that goes beyond interpreting legislation.

Domestic and international companies will need to align tax, corporate, accounting, technology, and regulatory considerations to navigate the transition safely.

Drummond Advisors provides integrated support to organizations operating in Brazil and the United States, assisting clients with areas such as:

assessing the impacts of the Tax Reform;
reviewing corporate and tax structures;
planning for international operations;
adapting accounting and tax processes;
tax compliance;
support for international expansion projects;
advisory services for M&A transactions and corporate reorganizations.

This integrated approach allows companies to transform a complex regulatory change into an opportunity to increase efficiency, reduce risks, and strengthen their global competitiveness.

Conclusion

Brazil’s Tax Reform represents one of the most significant transformations of the country’s business environment in recent decades. Although implementation will be gradual, its effects are already influencing strategic decisions related to international expansion, investments, corporate governance, and tax planning.

Companies that begin preparing now will be better positioned to take advantage of the new system, reduce compliance risks, and increase their competitiveness in an increasingly globalized market.

For organizations operating between Brazil and the United States, or planning to internationalize their businesses, understanding the changes brought by the Tax Reform is no longer simply a tax matter: it has become a strategic advantage.

Written by Marcos Ferreira*, Content Analyst at Drummond Advisors*

Sources

Tax Reform – Constitutional Amendment No. 132/2023: Planalto
Complementary Law No. 214/2025: Planalto
Brazilian Federal Revenue Service – Consumption Tax Reform: Receita Federal
IBS Management Committee – Information on Tax Reform implementation: IBS Management Committee
Ministry of Finance – Tax Reform: Ministry of Finance

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For Brazilian companies entering or expanding in the United States, mobility planning should begin with the business plan – not after it. Entity formation, capitalization, customer strategy, revenue projections, and hiring plans all influence which employees may need to transfer, when they can arrive, and how persuasively the company can explain the need for their […]

/ By Drummond Advisors

For Brazilian companies, this planning deserves particular attention because the visa strategy for a U.S. launch often differs from the treaty-investor strategies available to nationals of some other countries. Brazil is not an E-1 or E-2 treaty country, which makes the L-1 category especially important for Brazilian companies that need to move executives, managers, or specialized-knowledge personnel into a qualifying U.S. affiliate, subsidiary, branch, or parent structure. That reality makes corporate structuring, ownership documentation, capitalization, and staffing plans central to the immigration strategy from the first stages of expansion.

A new U.S. operation may need an executive who understands the parent company’s strategy, a manager who can build the local team, or a technical professional who can transfer proprietary processes and institutional knowledge. The L-1 Intracompany Transferee visa was designed for this kind of intracompany mobility, but the strongest cases do more than show that the employee qualifies – they connect the transfer to a concrete U.S. business objective.

In 2026, companies should not treat the L-1 process as a routine administrative step to address after the U.S. business plan is complete. Interview-waiver limitations, consular scheduling rules, possible administrative processing, and higher premium-processing costs make early coordination between immigration strategy and operational planning a business necessity.

The strategic question, therefore, is not simply whether a particular employee qualifies for an L-1 visa. It is whether the company’s U.S. expansion plan, investment commitments, revenue expectations, staffing model, and immigration evidence all tell one coherent and credible story.

When integrated into the expansion strategy, the L-1 visa can support U.S. market entry and growth in several ways:

Transferring an executive from Brazil to launch and direct a new U.S. subsidiary;
Assigning an experienced manager to establish operational controls, implement the parent company’s standards, and recruit a U.S. workforce;
Deploying a technical specialist to implement proprietary machinery, software, production systems, quality-control procedures, or customer-delivery methods;
Transferring institutional knowledge while U.S. employees are recruited, trained, and integrated into the business; and
Creating a longer-term pathway for qualifying multinational managers or executives to pursue permanent residence through the EB-1C category after the U.S. business has been doing business for at least one year and has developed as planned.

The strongest L-1 cases do more than establish that an employee is valuable. They explain why the U.S. assignment is necessary to execute the company’s expansion strategy, generate revenue, hire and train U.S. employees, and build a sustainable U.S. operation.

Consular planning is now launch planning. Since October 1, 2025, the Department of State’s interview-waiver policy has generally required in-person interviews for nonimmigrant visa applicants, subject to limited exceptions that ordinarily do not include L-1 applicants. Consular officers also retain discretion to require an interview in any individual case. Companies should also consider where the employee will apply, because applicants who seek visa interviews outside their country of nationality or residence may face significantly longer appointment waits.

For Brazilian companies, that means mobility timelines should be built into commercial timelines. Companies should account for:

Time to secure an interview appointment;
Preparation of the employee and accompanying family members;
The possibility of administrative processing following the interview;
Passport-return and travel logistics; and
Contingency plans if the employee cannot begin the U.S. assignment on the anticipated date.

An approved USCIS petition does not guarantee visa issuance at a U.S. consulate. Petition approval and visa adjudication are separate stages, and delays at either stage can affect office openings, customer commitments, hiring milestones, and executive availability.

New Office L-1A Petitions Require a Real U.S. Business Plan – not Just a U.S. Entity

The L-1A executive or manager “new office” category can be particularly valuable for Brazilian companies launching U.S. operations. But incorporation, a bank account, and a leased address are only the starting point.

USCIS generally grants an initial new-office L-1A petition for only one year. Within that period, the company must be able to demonstrate that the proposed U.S. operation can support an executive or managerial position. In practical terms, that means evidence of business reality: investment, operating activity, revenue strategy, secured physical premises, and a credible plan to hire staff or otherwise delegate operational work.

A persuasive new-office strategy should therefore address the business plan and the immigration theory together:

The Brazilian company’s history, financial capacity, and continuing operations;
The commercial reason for entering or expanding in the U.S. market;
The capitalization, committed funds, and operating budget of the U.S. entity;
Physical premises appropriate for the intended business—not merely a nominal address;
Projected revenue, contracts, customers, pipeline activity, or other market-development evidence;
A credible U.S. hiring plan that shows how the business will create jobs and support the transferred employee’s managerial or executive role;
The beneficiary’s authority, decision-making responsibilities, and role in executing the U.S. expansion; and
How day-to-day operational duties will be delegated as the U.S. business develops.

The central question is not whether the beneficiary will hold the title of president, director, or general manager. It is whether the U.S. organization will realistically develop to the point where the employee primarily directs the business instead of personally performing routine operational work. That is why revenue projections and hiring plans are not background details – they are core immigration evidence.

Companies should also plan for the extension from the outset. By the end of the first year, the record should show that the U.S. operation has moved from intention to execution: capital has been deployed, commercial activity is underway, physical premises remain appropriate for the business, employees or contractors have been added where appropriate, and the beneficiary’s role has developed consistently with the original business plan.

L-1B Cases Must Identify the Knowledge – and Tie It to U.S. Growth

L-1B specialized knowledge petitions are often weakened by descriptions that merely state the employee is highly skilled, experienced, or essential. Those characteristics may be relevant, but they do not independently establish specialized knowledge or explain why the transfer advances the U.S. business plan.

A stronger case identifies the knowledge and connects it to the company’s U.S. objectives:

The particular product, platform, methodology, equipment, process, or organizational knowledge involved;
How the employee acquired that knowledge;
Why the knowledge is distinct within the company or advanced compared with knowledge ordinarily found in the industry;
How long it would take to train another worker to the same level;
Why the knowledge is needed in the United States at this stage of the expansion; and
How the transfer will support U.S. operations, customers, employee training, revenue growth, or business development.

When the assignment involves training the local workforce, the company should describe the training plan with specificity. The transferred employee may, for example, lead U.S. teams, implement proprietary procedures, supervise complex assignments, and gradually transfer knowledge to U.S. employees who will carry the business forward.

That narrative is far stronger than suggesting that foreign personnel will substitute for developing a U.S. workforce. The more persuasive message is that the transfer is a bridge to U.S. investment, local hiring, training, and growth.

Business Reality and Immigration Evidence Must Tell One Story

L-1 adjudications are highly fact-dependent. For Brazilian companies expanding into the United States, inconsistencies between the petition and the company’s broader records can create avoidable risk and undermine an otherwise strong business case.

A business plan should be credible enough to guide the company – not merely optimistic enough to support a visa petition. U.S. immigration evidence is strongest when it reflects the same business reality the company would present to investors, lenders, customers, tax advisors, and employees.

The L-1 visa remains one of the most important mobility tools available to multinational companies and is particularly significant for Brazilian companies that may not have access to treaty-investor options based solely on Brazilian nationality. It can connect U.S. investment with the leadership, institutional knowledge, and technical expertise necessary to make that investment successful.

But in the current environment, companies should begin with a broader question than “Does this employee qualify for an L-1 visa?” They should ask whether the transfer makes business sense, whether the U.S. operation is funded and staffed to support it, whether the corporate structure clearly documents a qualifying relationship, and whether the immigration record substantiates the broader expansion strategy.

Before filing, companies should be prepared to answer practical questions such as:

What business function, knowledge, or decision-making authority must be transferred to the United States?
Which employee is best positioned to perform that function and explain the connection between the Brazilian operation and the U.S. expansion?
Does the corporate structure support the transfer and clearly document the qualifying relationship between the companies?
Will the U.S. operation support the proposed role through investment, revenue activity, staffing, and delegated responsibilities?
Where will the employee apply for the visa, and how will that consular timeline affect the business launch?
What happens if the USCIS or consular process takes longer than expected?
How will the transfer contribute to U.S. investment, hiring, training, revenue generation, and long-term growth?

When immigration planning begins alongside entity formation, capitalization, hiring, revenue planning, and market-entry strategy, the L-1 visa becomes more than a filing category. It becomes part of the architecture of the company’s U.S. expansion.

This article is provided for general informational purposes and does not constitute legal advice. L-1 eligibility and processing strategy depend on the particular corporate structure, employee history, proposed position, investment plan, hiring strategy, and consular circumstances involved.

Written by Chris Costa, Senior Immigration Attorney at Drummond Advisors

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U.S. tariff policy remains at the center of international trade discussions in 2026. After the U.S. Supreme Court ruled that part of the tariffs imposed by President Donald Trump’s administration under the International Emergency Economic Powers Act (IEEPA) were unlawful, the U.S. government has already refunded approximately $81 billion to companies that had paid surtaxes […]

/ By Marcos Ferreira

U.S. tariff policy remains at the center of international trade discussions in 2026. After the U.S. Supreme Court ruled that part of the tariffs imposed by President Donald Trump’s administration under the International Emergency Economic Powers Act (IEEPA) were unlawful, the U.S. government has already refunded approximately $81 billion to companies that had paid surtaxes on imported goods.

In addition to representing one of the largest tax refunds in recent U.S. history, the case creates new challenges for companies that import, export, or maintain international operations. For organizations with a presence in the U.S. market, the current environment requires close attention to regulatory changes, tax implications, and strategic planning opportunities.

What Led to the Tariff Refunds?

In April 2025, the U.S. government announced a broad package of tariffs on imports from several trading partners, justifying the measure under the International Emergency Economic Powers Act (IEEPA), a law enacted in 1977 that grants the President emergency powers during national emergencies.

However, in February 2026, the U.S. Supreme Court concluded that the IEEPA did not provide the authority to establish this tariff regime. As a result, the federal government was required to begin reimbursing importers for the tariffs that had been unlawfully collected.

According to the U.S. Department of the Treasury, between the beginning of fiscal year 2026 (October 2025) and July 2026, approximately $81 billion had already been refunded to eligible companies, with the largest payments occurring between May and June.

The Impact on U.S. Public Finances

The refunds had an immediate effect on federal finances.

In June 2026 alone:

The U.S. government collected approximately $23.6 billion in tariff revenue;
Refunded approximately $49.2 billion to importers;
Recorded a net outflow of $25.6 billion related to tariffs.

This contributed to a monthly federal budget deficit of approximately $120 billion, while the cumulative fiscal year deficit reached roughly $1.367 trillion. Beyond the refunds themselves, rising interest payments on the national debt also continued to pressure the federal budget.

Is the Matter Settled? Not Yet.

Although the Supreme Court invalidated tariffs imposed under the IEEPA, this does not mark the end of U.S. tariff policy.

Following the Court’s decision, the administration began relying on other legal authorities available under U.S. trade law, including Section 122 of the Trade Act of 1974, to temporarily maintain certain tariffs while developing new trade strategies. At the same time, the administration continues to conduct investigations that may lead to additional tariffs targeting specific countries and industries.

In practice, this means the regulatory environment remains highly dynamic, requiring companies engaged in international business to continuously monitor developments.

Which Companies May Be Affected?

The issue extends well beyond U.S. importers.

Foreign companies with subsidiaries, distribution centers, or commercial operations in the United States may also face significant impacts, particularly if they:

Import goods directly into the U.S. market;
Rely on global supply chains;
Operate under international supply agreements;
Maintain tax structures involving multiple jurisdictions.

In many cases, businesses may need to reassess contracts, logistics costs, pricing strategies, and tax planning to reflect the evolving regulatory landscape.

Opportunities for International Businesses

Despite the legal uncertainty created by frequent policy changes, the current environment also presents valuable opportunities.

Tax Structure Review

Companies can reassess their corporate and tax structures to identify efficiencies under the new regulatory framework.

Recovery of Previously Paid Tariffs

Organizations that paid tariffs later deemed unlawful should determine whether they qualify for refunds and identify the administrative procedures required to recover those amounts.

Import Planning

With the possibility of future tariff changes, businesses should carefully evaluate product sourcing, applicable trade agreements, and tariff classifications.

Regulatory Risk Management

The case underscores the importance of continuously monitoring legislative developments, judicial decisions, and U.S. trade policy changes.

What Should Companies Do Now?

Regardless of industry, companies with international operations should consider taking the following proactive measures:

Review their import and export supply chains;
Confirm whether they paid tariffs that were subsequently ruled unlawful;
Evaluate opportunities to recover overpaid amounts;
Update financial forecasts to account for potential tariff changes;
Review international contracts to address future regulatory developments;
Strengthen tax and customs compliance programs.

An integrated approach involving legal, tax, accounting, and international trade professionals can significantly reduce risk while improving an organization’s ability to adapt to an increasingly dynamic regulatory environment.

What to Expect in the Coming Months

Experts estimate that total tariff refunds could eventually exceed $175 billion if all eligible claims are processed. At the same time, the U.S. administration continues to pursue alternative legal mechanisms to preserve trade protection measures, suggesting that additional regulatory and judicial disputes may still emerge.

For global companies, this means U.S. trade policy will remain a strategic risk management issue requiring continuous monitoring and long-term planning.

Conclusion

The refund of $81 billion in tariffs represents a landmark moment in U.S. trade policy and demonstrates how judicial decisions can dramatically reshape the business environment.

For companies operating internationally, this case reinforces the importance of maintaining corporate and tax structures capable of responding quickly to regulatory changes, reducing risk while taking advantage of opportunities to recover credits and improve operational efficiency.

Drummond Advisors closely monitors legislative, tax, and trade developments in the United States, helping global companies structure operations, review tax strategies, maintain international compliance, and expand successfully into the U.S. market.

Do you believe your company may be eligible for a tariff refund? Contact our team through the chat available on our website or email us at info@drummondadvisors.com.

Written by Marcos Ferreira, Content Analyst at Drummond Advisors.

Sources

Reuters – Tariff refunds push US June budget deficit to $120 billion
Thomson Reuters Institute – Supreme Court’s tariff decision: What’s next for businesses and how to plan
Penn Wharton Budget Model (estimate cited by Reuters)
U.S. Department of the Treasury – Monthly Treasury Statement
Globo – Após derrota na Suprema Corte, governo Trump já devolveu US$ 81 bilhões em tarifas

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Intercompany loan transactions are common within multinational corporate groups. However, determining the appropriate interest rate is one of the most sensitive aspects of Transfer Pricing and has become an increasing focus of tax authorities. An interest rate that lacks adequate economic support may result in tax adjustments, limitations on interest deductibility, and penalties. Conversely, a […]

/ By Drummond Advisors

An interest rate that lacks adequate economic support may result in tax adjustments, limitations on interest deductibility, and penalties. Conversely, a well-documented pricing policy strengthens the taxpayer’s position, reduces audit risks, and provides greater certainty for cross-border financing transactions.

Although both Brazil and the United States follow the arm’s length principle, the methods used to demonstrate that an interest rate reflects market conditions differ significantly.

United States: The AFR as a Reference, But Not Necessarily a Market Rate

In the United States, the Internal Revenue Service (IRS) publishes the Applicable Federal Rate (AFR) each month. The AFR serves as a minimum benchmark for certain related-party transactions, particularly under the rules established by Section 7872 of the Internal Revenue Code.

In addition, Section 482 provides standards that, under certain circumstances, reduce the likelihood of IRS challenges when the interest rate falls within a range associated with the AFR.

However, the AFR does not always reflect the rate that unrelated parties would negotiate. In transactions involving higher credit risk, unsecured financing, or bullet-payment structures, an independent lender would generally require a higher return.

In these cases, preparing a benchmark study in accordance with Treasury Regulation §1.482-2(a) becomes essential to demonstrate, based on market data, that the interest rate satisfies the arm’s length principle.

Brazil: New Rules Require Documentation Based on Comparable Transactions

With the enactment of Law No. 14,596/2023, Brazil adopted the OECD Transfer Pricing Guidelines, replacing its former system based on predetermined statutory parameters.

Normative Instruction RFB No. 2,161/2023 regulates financial transactions between related parties, including intercompany loans, cash pooling arrangements, and guarantees, without establishing any interest rate that is automatically accepted by the Brazilian Federal Revenue Service.

In practice, determining an arm’s length interest rate requires consideration of several factors, including:

The borrower’s credit risk profile, generally assessed on a standalone basis, with a specific evaluation of any implicit group support;
The characteristics of the transaction, including maturity, currency, collateral, and repayment terms; and
Comparable transactions identified through recognized financial databases such as Bloomberg or Capital IQ.

Under this new framework, documentation supported by comparable market data is no longer simply a tool for justifying higher interest rates. It has become a fundamental component of Transfer Pricing compliance.

Key Differences Between Brazil and the United States

Aspect	United States	Brazil
Minimum Reference	AFR for certain situations	No predefined acceptable interest rate
Demonstrating an Arm’s Length Rate	Benchmark study when supporting a rate different from the AFR	Benchmark study required to demonstrate compliance with the arm’s length principle
Credit Analysis	May consider implicit group support	Primarily standalone analysis, with specific consideration of potential implicit group support
Legal Framework	Internal Revenue Code Sections 482 and 7872	Law No. 14,596/2023 and Normative Instruction RFB No. 2,161/2023

Considerations for Multinational Groups

Companies conducting intercompany financing transactions between Brazil and the United States should evaluate each loan agreement under the applicable rules of both jurisdictions.

Although both countries apply the arm’s length principle, the requirements for demonstrating that an interest rate is consistent with market conditions are not identical. A benchmark study prepared solely to satisfy IRS requirements may not fully comply with Brazilian regulations, just as documentation prepared for Brazil may not satisfy all U.S. requirements.

A comprehensive analysis involves more than selecting an interest rate. It should also assess the borrower’s creditworthiness, the transaction’s terms, the existence of collateral, the financing period, and the economic evidence supporting the agreed-upon pricing.

How Drummond Can Help

Drummond’s Transfer Pricing team advises multinational groups on structuring and documenting intercompany financial transactions, including:

Establishing interest rates that comply with the arm’s length principle;
Preparing benchmark studies for financial transactions;
Reviewing intercompany loan agreements, cash pooling arrangements, and guarantees;
Preparing Transfer Pricing documentation to comply with both Brazilian and U.S. regulations; and
Providing support during audits, tax examinations, and reviews of related-party transactions.

If your company engages in intercompany financing or is considering reviewing its Transfer Pricing policy for financial transactions, our team is available to evaluate your current structure and develop a solution aligned with the requirements of each jurisdiction.

Written by Adriana Lemos, Transfer Pricing & Cross-Border Strategy.

8 MIN

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The United States can be a natural market for Brazilian entrepreneurs seeking scale, access to capital, suppliers, and new customers. However, for those planning to relocate to launch, acquire, or operate a business in the U.S., immigration strategy must go hand in hand with business strategy. When available, the E-2 Treaty Investor Visa can be […]

/ By Marcos Ferreira

In simple terms, the E-2 Visa allows a national of a treaty country to enter the United States to develop and direct a business in which they have invested—or are actively investing—a substantial amount of capital. It is not a green card, but rather a practical option for founders, operators, franchise buyers, and business owners who want to actively manage a U.S. operation.

The First Step: Confirm Eligibility Through Nationality

For Brazilian nationals, the first consideration is nationality. Brazil is not an E-2 treaty country, meaning that a Brazilian passport alone is generally not sufficient. However, many Brazilians hold dual citizenship with treaty countries such as Italy, Portugal, Paraguay, or Argentina. In these cases, an E-2 strategy may be viable, provided the rest of the structure is properly established.

Dual citizenship must be clearly documented. Having ancestry, living abroad, or having a citizenship application in progress is not enough. The applicant must already be a national of a treaty country and hold a valid passport, along with any supporting civil documents when required. For Portuguese nationals, eligibility for the E-1 and E-2 visa categories was introduced relatively recently and became available to qualified applicants beginning on April 23, 2024.

Next: Structure the Business Correctly

Once nationality has been established, attention turns to the ownership structure. The U.S. company must also possess the nationality of the treaty country. In practice, at least 50% of the business must be owned by nationals of that treaty country. This requires careful planning from the outset, particularly when there are co-founders, investors, or future fundraising rounds.

Ownership dilution should be addressed before raising capital—not afterward. A founder who initially owns 80% or 90% of the company may appear well positioned for an E-2 Visa, but an investment round that reduces ownership below 50% could significantly complicate eligibility. Shareholder agreements, voting rights, board control, veto rights, and governance provisions should all be designed with the immigration strategy in mind.

Additional care is required when founders hold passports from different treaty countries. The company’s nationality, the principal applicant, and any future E-2 employee strategy should all be evaluated together before equity is issued.

What the Consulate Wants to See

Once nationality and ownership have been addressed, the focus shifts to the business itself. The consular officer will evaluate whether the investment is credible, whether the business is real, whether it has the potential to create jobs, and whether there is a realistic likelihood of success. Simply transferring money to the United States is not enough. The investment must be substantial, irrevocably committed, placed at risk, and tied to a legitimate commercial enterprise.

The investment amount should tell a business story—not simply represent a number. An investment of $100,000 may be substantial for a service-based business but insufficient for manufacturing, hospitality, logistics, or retail operations. The objective is to demonstrate that the investment is proportional to the business plan, has already been committed, and will fund tangible business needs such as equipment, inventory, lease payments, licenses, payroll, technology, marketing, or the acquisition of an existing business.

Job creation also plays an important role. Unlike the EB-5 Immigrant Investor Program, the E-2 Visa does not require a fixed number of jobs. However, the business cannot exist solely to support the investor and their family. Hiring plans, payroll records, job descriptions, organizational charts, and evidence of current employees help demonstrate that the enterprise is more than a marginal business.

The third pillar is commercial viability. A strong case presents a genuine, operating business supported by customer contracts, letters of intent, purchase orders, invoices, bank statements, lease agreements, supplier relationships, evidence of market demand, a well-developed business plan, and financial projections grounded in reality. The more operational traction the business can demonstrate, the stronger the application tends to be.

For this reason, early-stage startups require additional preparation. A pre-revenue company may still qualify, but it has more to prove. Before the visa interview, founders should ideally have already formed the U.S. company, opened a business bank account, validated customers and business partners, secured operating premises when necessary, established supplier relationships, and documented a realistic hiring plan.

Startups Require Additional Preparation

All preparatory business activities must comply with the founder’s immigration status. Permissible temporary business activities may include attending meetings, negotiating contracts, participating in conferences, and conducting market research. However, founders should not actively work in the United States or directly manage the business before obtaining the appropriate work authorization.

Another Option: Acquiring an Existing Business

For some investors, purchasing an existing business may present a stronger E-2 strategy than launching a new venture from scratch. An acquisition may provide immediate access to customers, revenue, employees, contracts, equipment, licenses, operating history, and market reputation—all of which help demonstrate from day one that the enterprise is legitimate.

This evidentiary advantage is significant. Established businesses typically have tax returns, financial statements, payroll records, W-2s, 1099s, profit and loss statements, and other documentation demonstrating ongoing operations. Rather than relying solely on projections, investors can present historical performance while explaining how their management will expand the business.

An acquisition also strengthens the employment narrative. If the business already has employees, the investor can demonstrate both job preservation and future hiring plans. This can be particularly advantageous for restaurants, franchises, distribution companies, medical practices, service businesses, manufacturing companies, and other operations with an existing workforce.

Managing the Closing Process

The primary challenge in acquisition cases is timing. Sellers want certainty, while buyers may be reluctant to release the full purchase price before visa approval. In these situations, an escrow arrangement can be an effective solution, allowing funds to remain committed while being released once the E-2 condition has been satisfied.

The escrow agreement must be carefully structured. Generally, the relevant condition should be E-2 approval to avoid making the investment appear overly contingent. The purchase agreement, escrow agreement, source of funds documentation, closing conditions, and visa application should all present a consistent narrative.

The purchase agreement itself should also support the immigration strategy. It should address what happens if the E-2 Visa is denied, how long the seller will wait before terminating the transaction, which documents will be provided for the visa application, whether employees will remain after closing, and how operational transition will occur. Due diligence should extend well beyond the purchase price to include revenue, employees, leases, licenses, franchise agreements, liabilities, litigation, customer concentration, tax issues, and the business’s ability to support the overall E-2 narrative.

What If the Goal Is to Expand an Existing Brazilian Business?

When the strategy involves expanding an existing Brazilian company into the United States, the E-2 application should clearly demonstrate that the U.S. operation represents a genuine expansion rather than a shell company. The application should explain the company’s history in Brazil, the U.S. market opportunity, the relationship between the Brazilian and U.S. operations, the planned U.S. investment, the founder’s role, and projected revenue and hiring. Existing customers, channel partners, and tangible business progress should all be prominently documented.

Conclusion: Plan Before You Apply

The strongest E-2 cases are built well before the application is submitted. With proper planning, founders can structure the company correctly, preserve treaty-country nationality, avoid ownership dilution issues, document the lawful source of investment funds, validate U.S. customers, prepare a realistic hiring plan, and determine whether a startup, franchise, or acquisition best supports their long-term objectives.

The E-2 Visa can be an exceptionally powerful option for Brazilian entrepreneurs who hold citizenship in an eligible treaty country such as Italy, Portugal, Paraguay, or Argentina. However, approval is not based solely on possessing the appropriate nationality or transferring money into the United States. A successful application must clearly and convincingly demonstrate treaty nationality, ownership and control, a substantial and committed investment, a real and non-marginal enterprise, and the applicant’s ability to develop and direct the business.

For Brazilian founders, the most effective E-2 strategy combines immigration planning with sound business planning. The case should reflect the same fundamentals that make any company attractive to investors: capital, customers, talent, execution, and growth. When these elements are aligned before filing, the E-2 Visa can become an effective bridge for bringing a Brazilian business into the U.S. market.

Written by Chris Costa, Senior Immigration Attorney at Drummond Advisors

2 MIN

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The acquisition of the Brazilian company, a specialist in surface treatments for fasteners, strengthens the Group’s international position in advanced anti-corrosion protection technologies. Milan, June 30, 2026 – Primat Curtis has announced the acquisition of Realtec, a Brazilian company specializing in surface treatments for fasteners and recognized for its expertise in zinc flake coating technologies […]

/ By Drummond Advisors

The acquisition of the Brazilian company, a specialist in surface treatments for fasteners, strengthens the Group’s international position in advanced anti-corrosion protection technologies.

Milan, June 30, 2026 – Primat Curtis has announced the acquisition of Realtec, a Brazilian company specializing in surface treatments for fasteners and recognized for its expertise in zinc flake coating technologies (bulk and electrostatic) as well as PTFE spray coating solutions.

The transaction marks another strategic step in strengthening the Group’s international footprint in an increasingly global marketplace. With Realtec’s two manufacturing facilities located in the Brazilian states of São Paulo and Minas Gerais, Primat Curtis will be able to provide customers with an even stronger local presence and enhanced service capabilities across the automotive, oil and gas, and heavy machinery industries.

Through this acquisition, Primat Curtis continues to execute its growth strategy focused on international expansion and strengthening its industrial capabilities by integrating technological expertise and process know-how in a market where quality, reliability, and sustainability are becoming increasingly important competitive advantages.

The Primat Group, which operates manufacturing facilities in the Italian regions of Lombardy, Piedmont, Emilia-Romagna, and Friuli Venezia Giulia, is controlled by HAT SGR and Tendercapital Alternative Funds PLC – CFSE Tendercapital Alternative IV Fund. The Group is a leading provider of advanced technological services for the treatment of fasteners—including bolts, nuts, and other components—primarily serving the automotive industry.

The acquisition of Realtec is part of an international consolidation and expansion strategy launched in 2023 with the acquisition of a 65% stake in the U.S.-based Curtis Metal Finishing and a 97.5% stake in Italy’s Vi.Pi.Effe Pen. These transactions established the world’s largest provider of technological services for fastener treatment, with operations across North America, Brazil, and Europe and annual revenues of approximately €130 million.

The Group is led by Global CEO Jeff Wilson, formerly CEO of Curtis Metal Finishing prior to its acquisition by Primat. Wilson led the acquisition of Realtec with the support of CFO Luca Cassiani.

Transaction Advisors

Primat Curtis was advised on all legal aspects of the transaction by GA-Alliance and GA-Alliance Brazil (Drummond Advisors), which worked as a single, fully integrated legal team across Italy and Brazil.

The transaction structuring and negotiation of the definitive agreements were led by partners Marco Bertini and Pedro Drummond, with support from Counsel Filomena Zonno.

The Brazilian legal work was led by Mariana Belisario and Mariana Tavares on the legal due diligence; Daniel Reines and Julia Soares on the labor due diligence; and Allan Bachtold on the tax due diligence.

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MIAMI, Fla. — Drummond Advisors is pleased to welcome BlueMax and its clients as part of its continued commitment to supporting businesses operating between Latin America and the United States. The move expands the firm’s ability to deliver accounting, tax, financial, and back-office solutions through a broader network of expertise, technology-enabled services, and operational support. […]

/ By Marcos Ferreira

MIAMI, Fla. — Drummond Advisors is pleased to welcome BlueMax and its clients as part of its continued commitment to supporting businesses operating between Latin America and the United States.

The move expands the firm’s ability to deliver accounting, tax, financial, and back-office solutions through a broader network of expertise, technology-enabled services, and operational support. Clients will benefit from enhanced capabilities while continuing to receive the personalized service and trusted guidance that have long defined both organizations.

As companies expand across borders, managing financial operations, regulatory compliance, reporting requirements, and administrative functions becomes increasingly complex. To address these challenges, the firm continues to invest in specialized talent, operational infrastructure, and innovative technologies designed to simplify operations and support sustainable growth.

Together, the organizations further strengthen their ability to support entrepreneurs, growing businesses, and international companies seeking efficient, scalable solutions to establish, operate, and expand in the U.S. market.

“For years, our focus has been on helping businesses navigate growth opportunities with practical, high-quality solutions,” said Martin Dell’Oca, Co-Founder of BlueMax. “We are excited about the opportunities this next chapter creates for clients, who will now benefit from expanded resources, broader expertise, and a stronger support structure for their U.S. operations.”

Federico Fanlo Quintar, Co-Founder of BlueMax, added: “Businesses today need partners who understand both the strategic and operational aspects of growth. By combining experience, technology, and a client-centered approach, we are creating an even stronger foundation to support companies as they expand internationally.”

The expanded platform enhances the client experience through multidisciplinary expertise, streamlined processes, and a broader portfolio of services designed to help organizations navigate increasingly complex business environments.

“As businesses grow across borders, they need more than individual service providers—they need a connected ecosystem capable of supporting every stage of their journey,” said Bruno Drummond, CEO of Drummond Advisors. “Welcoming BlueMax and its clients strengthens our ability to deliver integrated solutions that combine expertise, technology, and operational excellence, helping businesses grow with confidence, efficiency, and long-term success.”

The initiative also reinforces the organization’s growing presence throughout Latin America, a region that continues to play a critical role in its long-term strategy of supporting companies entering, operating, and expanding within the United States.

The addition of BlueMax marks another step in the firm’s ongoing commitment to expanding its capabilities across the Americas and delivering integrated solutions that help businesses navigate growth in an increasingly complex global environment.

About Drummond Advisors

Drummond Advisors is a U.S.-based professional services firm providing legal, tax, accounting, immigration, advisory, and back-office solutions to companies and individuals operating across international markets.

Combining multidisciplinary expertise with technology-enabled solutions, the company helps entrepreneurs, businesses, and investors navigate complex regulatory environments, streamline operations, and support sustainable growth across the United States and international markets.

With a strong presence across the Americas, the firm delivers integrated services designed to support clients throughout every stage of their business journey, from market entry and expansion to ongoing operations and long-term growth.