Contact Us

Please fill in the form below and we will be
in touch shortly:


These Best Credit Practices in Brazil Will Keep You from Falling Downhill

Octávio Aronis
January 15, 2018

I’m often asked by many overseas creditors about where to start when establishing a business relationship with a customer in Brazil. My answer is that it often depends on whether you are going to grant credit, and if so, how much.

If you’re going to provide credit for only a few hundred dollars on each order, then it’s probably safe to say that investing any significant amount of money in your credit research is probably not worth the cost per sale. However, as the amount of credit being granted increases, the amount of research, due diligence, time and money required will increase as well. 

Here is my list of best credit practices for your review. 

Obtaining a credit report from one of the local credit information bureaus is a quick first step. As all the major international credit reporting companies are providing their services in Brazil by partnering with one or more local credit information companies, usually what they can provide in English is what has been provided to them in Portuguese. However, bear in mind that the financial and legal information that is provided has not necessarily been confirmed. 

When looking at the credit report, in addition to the financial and payment data that is provided, we need to take a careful look to see if there are any pending or settled law suits and judgments respectively. Certainly any lawsuits related to unpaid accounts would be a red flag. In order to verify the nature or basis for lawsuits or judgments, a look through the legal public registry can give additional details regarding underlying claims to more accurately understand the reasons they were initiated.  Please note that each Brazilian state has its own registry (only in Portuguese) and for your reference, the one related to São Paulo is  

Onsite visits can divulge a great detail of information that is not in a credit report. I recently received an inquiry for an onsite visit from a creditor in Europe who is in negotiations with a Brazilian that would like to purchase approximately one million dollars in equipment. Due to the large amount of credit that will be extended, I have been asked to make the initial onsite visit. During my visit I will be able to: 

  • speak directly with the owners and executive management and get a feel for their honesty and forthrightness
  • evaluate the internal and external physical condition of the company
  • observe the general atmosphere and activity level of the employees
  • visit the local court and inquire about claims, suits, or judgments against the potential customer
  • visit local trade suppliers that have been previously provided to verify credit limits and payment history

Moreover, when making an onsite visit, the psychological benefit can’t be overstated. When the creditor’s representative, especially one that is an attorney, makes the onsite visit, the potential customer may feel much more inclined to be above board with information and to resolve any disputes that may arise in good faith. 

Doing background checks on the owners is highly recommended. Just as you would research extensively about the customer’s company itself, you never know what red flags could be lurking in the background of the owners or executive management. During my career I have come across owners who not only had several bankruptcies and other civil suits in their past, but criminal felonies as well. In the end, the credit worthiness of any company is ultimately based upon the character of its ownership. 

Speaking with the customer’s corporate counsel is key. When doing an onsite visit or talking with a creditor’s customer on the phone, I will often ask if I can speak with their corporate counsel as part of our research and due diligence. Talking directly with the customer’s corporate counsel often allows for the free exchange of information and sets the stage for two attorneys representing their clients to work together in an ethical framework. Should the customer do something that could be interpreted as not in line with the contract, having direct communication to their corporate counsel can often resolve the dispute or issue. 

Making sure your documentation is legally enforceable in Brazil. I can’t begin to tell you how many times I receive contracts, purchase orders, invoices, and other documentation with terms and conditions that do not comport to the Brazilian civil code. Always make sure that your important contractual, ordering and billing documentation is in proper legal form and enforceable. Even if your contracts are not in Portuguese, as long as the terms and conditions are enforceable, then with the help of a certified translation, you can begin the process of leveraging your legal rights. 

Recap, summarize and confirm decisions in writing. With the increase in the use of televideo conferencing such as Skype, many decisions between parties are made but are not later verified in writing. When claims are submitted to our office, in which amounts or other issues are being disputed, I’ve been told that it was "verbally agreed to.” As you can imagine, verbal decisions or agreements that are not subsequently confirmed in writing with the customer do not strengthen the collection potential of a claim. 

Never rest on your credit laurels by a customer who pays timely. The world over, we all can be easily drawn in to our customer who pays timely and appears to be in good financial shape. However, your Brazilian customer’s financial stability today is not a guarantee as to how they will be tomorrow. Taking out quarterly credit reports, asking for annual audited financial statements (if this is possible) and keeping your eyes and ears open through several channels are very important in order to avoid any non-payment surprises. 

I hope the above gives you a concise best practice credit framework for doing business in Brazil. Your thoughts, comments, and questions are most welcome. 

Please contact Octávio Aronis at

This article has been edited by Steven Gan of Stellar Risk Management Services, Inc. 


More Media
    4 de Setembro de 2019
    Positive record

    A Law has been published making adherence to the positive register automatic

    Supplementary Law 166/19 was published in the DOU of this Tuesday, 9th April.

  • Celia Korn / Octavio Aronis
    31 de Janeiro de 2019
    A Good Translation Helps Minimize Collection Issues

  • Octavio Aronis
    14 de Novembro de 2018
    Keeping the Global Collection Assembly Line Moving

    A strong export economy is like a very dynamic manufacturing assembly line, in which thousands of parts are required to complete the final product. And among all the parts assembled, the one lubricating factor to keep the line from coming to a complete halt is having sufficient cash flow.  As an international collection attorney, I often feel a sense of pride in knowing that our collection services contribute to keeping the global cash flow moving.

  • By Octávio Aronis, Attorney
    14 de Agosto de 2018
    Conciliation and Mediation in Brazil and Latin America

    As you know, trade wars and tariff negotiations are presently consuming the international business community. For good or bad reasons, the United States has caused countries, including Brazil, to levy and retaliate against its new imposition of tariffs on a variety of goods and materials.

  • Ben Cohen
    14 de Junho de 2018
    Repulsive Antisemite - Convicted by UK Judge for Jew-Hating YouTube Videos

    Amateur musician Alison Chabloz performing a song that insults survivors of the Holocaust. Photo: Screenshot.




  • Octávio Aronis
    6 de Agosto de 2018
    Collections Best Practices:

    Doing Business in Brazil


  • Octávio Aronis
    18 de Abril de 2018
    Creating Harmony Between a Forwarding Agency and a Collection Law Firm

    Productive collaboration between agencies and law firms is essential for a strong collection industry and client satisfaction, and is not something that should be taken for granted. There are steps both parties can take when considering how to best contribute to this relationship, which will help to ensure an effective and harmonious partnership.

  • 13 de Dezembro de 2017
    Country Risk Report: Ecuador

    Ecuador is located in western South America, bordering the Pacific Ocean at the Equator, between Colombia and Peru. It's land area is 276,841 sq. km., which is about the size of Colorado, and includes the Galapagos Islands.

  • 13 de Dezembro de 2017
    Taking a Mulligan into Credit

    Jackie Mulligan, North American Credit Operations Manager at Procter and Gamble (P&G), initially aspired to be a business educator, but as it turned out, she ended up taking a position in credit operations at Procter & Gamble.

  • Octávio Aronis
    15 de Dezembro de 2017
    The Impact of Exchange Rates in Long Term Foreign Settlements

    In my daily work, one of the challenges I must navigate is the negotiation of long-term payment settlements for clients outside of Brazil.

© Copyright 2019 Aronis Advogados -
Rua Afonso Braz, 579, 12º andar - conj. 125 - 04511-011 - Vila Nova Conceição - São Paulo - SP - Brasil
Acesse nosso perfil no Linkedin
Ftech Soluções em Internet