Federal Government facilitates access to foreign participation in FINTECHS 28 jun 2023

Federal Government facilitates access to foreign participation in FINTECHS


Credit Fintechs, a niche of startups that uses technology in order to offer financial products and services in a most effective and accessible manner, had its activities regulated by the National Monetary Council (Conselho Monetário Nacional) through Resolution No. 4,656 (“Resolution No. 4,656”) and Resolution No. 4,657, both dated as of April 26th, 2018.

Such new regulation allows the participation of Fintechs in niches once restricted, in particular offering credits to its clients without the intermediation of a bank (the authorization for these companies to operate before the new regulation was restricted to acting as banking correspondents in the credit market).

Still in regards to the new regulation, credit fintechs may be structured as two different financial institutions: (i) Direct Credit Companies (“SCD”), which can carry out operations with their own resources and (ii) Peer-to-Peer Lending Company (“SEP”), focused on financial intermediation (peer-to-peer lending).

SCD and SEP are classified as financial institutions in accordance with Resolution 4,656 and, consequently, shall comply with the regulation applicable to such entities as members of the National Financial System (“NFS”), including the prohibition of increasing the percentage of corporate interest of individuals or legal entities resident or domiciled abroad in the corporate capital of financial institutions headquartered in Brazil, in accordance with article 52 of the Constitutional Temporary Provisions Act (Ato das Disposições Constitucionais Transitórias).

2-DECREE No. 9,544

On this  last October 30th, the President of the Republic, Michel Temer, published the Decree No. 9,544 (“Decree No. 9,544”), in which it was declared as being of interest to the Brazilian government the participation of foreign investors in credit fintechs. Therefore, an exception was made to credit fintechs headquartered in Brazil to the constitutional restriction that requires specific presidential authorization for foreign capital investment to be made in such financial institutions (as long as they are authorized by the Central Bank to operate in the NFS).

From now on, credit fintechs will be able to obtain capital of up to one hundred percent (100%) with foreign investors inflow as long as they have a permission from the Central Bank of Brazil (“Bacen”) to operate within the NFS, which will simplify the authorization process for any SEPs and SDCs that have foreign capital and intend to operate in the Brazilian market.

With the Decree No. 9,544, the authorization process will become faster and should bring more resources to the sector, confirming the Brazilian government’s interest to encourage the market.


Roberto Vianna do R. Barros
T: +55 11 3077-3513
E: rbarros@cmalaw.com

Jorge Barbieri Gallo
T: +55 11 3077-3576
E: jorge.gallo@cmalaw.com