On May 2, 2017, Normative Instruction No. 40 (“IN 40”), issued by the Department of Integration and Company Registration (“DREI”), was published, amending Article 2 of Normative Instruction No. 34 (“IN 34”), also issued by DREI, which required non-resident investors to grant a power of attorney, with special powers, to a legal representative in Brazil, for an indefinite term.
Pursuant to this new IN 40, it is no longer mandatory that non-resident investors grant a power of attorney to a legal representative in Brazil for an indefinite term, as such undefined validity period was causing a certain discomfort to several investors.
However, non-resident investors still have a legal obligation to maintain duly appointed representatives in Brazil, while they hold any equity interest in Brazilian companies and cooperatives, based on powers of attorney granted to them as provided by the applicable legislation, with powers to, among other things, receive service of process in connection with lawsuits brought against them in Brazil.
Nevertheless, in the specific case of corporations, the power-of-attorney for the representation of the shareholders at General Meetings should have been granted less than a year before, pursuant to Paragraph 1 of Article 126 of Law No. 6,404/1976.