Brazil’s growing economy and large and diverse population make the country an attractive prospect for companies eyeing expansion into a new market. But the complex labor laws and tax regime mean compliance can be tricky and time-consuming.  

Many companies choose to hire local employees to support expansion goals. But hiring talent in Brazil still requires a legal entity. Setting up a limited liability company can take up to three months and cost up to US$45,000. However, turning to a Direct Employer of Record (EOR) is a quick and cost-effective way to hire in the country. 

What is a Direct Employer of Record  

A Direct EOR, like Elements Global Services, is a quick and cost-effective way of hiring and paying global employees. As a Direct EOR, we have entities in Brazil and more than 160 countries. We can hire employees under our local entity, acting as the legal employer on your behalf. As the legal employer, we can onboard and manage talent and take care of essential payroll and HR administration tasks. 

The direct approach eliminates the need for third-party vendors, reduces costs and increases speed to market. This is different from an indirect EOR, which does not have an entity in the country it provides services. An indirect EOR uses multiple vendors, slowing down the process, which becomes costly.  

What to Consider When Hiring in Brazil 

• Employment Contracts: Contracts in Brazil may be implied, verbal or in writing. The duration of the contract can be a fixed period, an indefinite period — most common in Brazil — or intermittent.  
• Working Hours: The standard workweek in Brazil is 44 hours, with eight hours per day for five days and four hours on the sixth day. Employees are entitled to a minimum of 11 hours of rest between two consecutive workdays and every employee is entitled to 24 straight hours of rest per week. Employers cannot require an employee to work on a Sunday, with few exceptions. 
• Wages: Most industries in Brazil have unions and respective collective agreements, which establish a minimum wage. This is in addition to federal and state wage requirements. If there is a conflict between wages in the three governing bodies, the higher salary typically prevails. 
• Taxes: Personal income tax is imposed on all residents of Brazil, while non-residents are taxed only on their Brazilian-sourced income. Employers are required to withhold individual income tax monthly. Additional tax is withheld for social security benefits. 
• Termination: Employers must provide between eight and 90 days of notice before termination, depending on how long the employee has worked for the company unless there is just cause. All terminations must be properly recorded, and a submission of termination must be sent to the labor authorities within one month.

The labor laws in Brazil favor employees, so contracts and documents need to adhere to local requirements. As a Direct EOR, we provide on-the-ground support. Local expertise means better market insights and direct communication means a compliant and streamlined hiring process. 

See for Yourself

Find out how Affygility Solutions hired talent in Brazil using Elements’ Direct EOR solution. Our expertise helped this toxicology services company tap into a new market quickly and compliantly.

About Elements Global Services
Elements Global Services is a global tech firm, focused on software built to go beyond country borders and simplify a company’s ability to expand their business, onboard employees, manage compliance and pay globally. Headquartered in Chicago, Elements offers customers 100% direct Employer of Record services in over 160 countries, powered by proprietary HR technology that simplifies everything from payroll, benefits and human capital management to HR outsourcing, local compliance and visa & mobility.