On May 16, 2025, the Bill of Law No. 2,338/2025 (“Bill”) was submitted to the House of Representatives, seeking to amend the foreign exchange law and create the so-called “International Banking Units” (“IBUs”).
In short, the Bill aims to lay down the statutory basis for Brazilian banking institutions to create IBUs as an international business hub that can operate entirely in the Brazilian territory and take advantage of a series of legal flexibilities.
Below, we share our view of the main innovations proposed by the Bill:
1. Introduction
The international competitiveness of the Brazilian financial sector has always been impacted by legal restrictions.
For example, it was the case of the former Circular No. 24, of February 25, 1966, issued by the Central Bank of Brazil (“Circular 24”), which established that “financial institutions are expressly forbidden, in any form, to apply or promote the placement abroad of funds collected in the country”. While it was in force, a range of business models had to adapt, especially in the context of trade finance transactions. Despite more flexible interpretations and specific regulatory exceptions1, Circular 24 still imposed additional costs on several transactions (such as financing importers abroad of Brazilian products).
As a result, several Brazilian institutions established subsidiaries, branches, or offices abroad to carry out certain types of transactions.
With the reform introduced by Law No. 14,286, of December 29, 2021 (“Foreign Exchange and International Capital Law”) and its regulations, Circular 24 was revoked, and it can be said that the financial sector now has substantially greater flexibility.
However, the opening of a foreign currency account in Brazil remains restricted to specific cases expressly provided for in the foreign exchange regulations and payment in foreign currency remains linked to certain legally established situations.
It is in this context that the Bill seeks to establish the IBU.
2. Overview of the IBU
Initially, the Bill defines an IBU as simply a “structure” and not a legal entity.
Furthermore, a IBU can have an office in Brazil and, therefore, employees hired and working locally. According to the Bill’s justification: “Another intended aspect is to allow Brazilian institutions to carry out international financial transactions directly from Brazilian territory, discouraging the opening of branches abroad, incentivizing their activities to take place on national territory and the engagement of Brazilians for these activities.” (emphasis added)
The Bill also provides that the Federal Executive Branch will regulate the tax and accounting rules applicable to institutions authorized to create IBUs. Accordingly, creating a IBU will also involve the segregation of treasury activities, customer service, accounting and records and compliance with tax obligations.
3. Eligible Institutions
According to the Bill, IBUs can only be created by:
- banking institutions authorized to operate by the Central Bank of Brazil; and
- that are qualified as systemically important, the definition of which includes:
- size greater than or equal to 10% of Brazil’s Gross Domestic Product (Produto Interno Bruto or PIB); or
- which executes material international activities that require full compliance with prudential regulations, in compliance with regulations of the National Monetary Council (“Conselho Monetário Nacional” or “CMN”)2.
4. Admitted Activities
In the Bill, fundraising is exempt from reserve requirements (recolhimento compulsório) and contribution to the Brazilian deposit insurance mechanism, the Credits Guarantee Fund (Fundo Garantidor de Créditos or FGC). In fact, an IBU will even be able to raise funds in foreign currency by opening an accounts in Brazil for its clients.
Its transactions are broadly defined by the Bill and will depend on details in CMN regulations. In any case, examples of loans, financing and guarantees are included, even in the case of companies based in Brazil wishing to carry out international financial transactions.
The local office of an IBU will also be able to lead international interbank relations and enter into partnerships with international and multilateral banks to raise funds and attract investment, as may be regulated by the CMN.
Separately, the Bill innovates by expressly allowing the use of virtual assets for foreign exchange transactions and any other financial transactions within the scope of IBUs.
Given the wide range of permitted activities, it is important to assess whether there will still be reasons for eligible institutions to maintain their current branches abroad if the Bill is approved and published as law.
5. Compliance
The Bill also requires the CMN to regulate, with regard to IBUs, the application of Law No. 9,613, of March 3, 1998 (which provides for the crime of money laundering, among other issues), and Law No. 13,506, of November 13, 2017 (which regulates the punitive administrative proceeding of the Central Bank of Brazil, among other issues).
The underlying rationale is to prevent IBUs from becoming points of weakness within conglomerates with respect to compliance with the law and regulations.
6. Tax Aspects
Finally, the Bill proposes an exemption from income tax and tax on financial transactions (IOF) in the case of financial transactions with non-residents that are carried out by IBUs, encouraging the use of such structures in financing foreign investors.
7. Legislative Process
The Bill is still under consideration in the National Congress, subject to review and voting by the House of Representatives and the Senate. In this context, the proposal may be improved by means of technical interactions with the Congress and the production of qualified legal inputs.
Our Government Relations team closely monitors legislative developments, mapping important regulatory risks and opportunities. We engage in critical analysis of a bill’s text and the development of technical contributions, always aligned with institutional interests and the regulatory environment of the financial sector.
Cescon Barrieu teams are at your disposal for clarifications and guidance regarding the issues highlighted in this bulletin.
1. For example, the exception then provided for in Article 2 of CMN Resolution No. 4,033, of November 30, 2011 (now revoked): “Article 2 Banks authorized to operate in the foreign exchange market with regulatory capital (patrimônio de referência or PR), greater than R$5,000,000,000.00 (five billion reais) may use funds raised on the foreign market to extend credit abroad to Brazilian companies, subsidiaries of Brazilian companies and foreign companies whose shareholder with the largest voting capital is, directly or indirectly, an individual or legal entity domiciled in Brazil, as well as to acquire, on the primary market, securities issued by or under the responsibility of such companies.”
2. The definition of systemically important is in the line with that adopted for Segment 1 (S1) under CMN Resolution No. 4,533 of January 30, 2017 (which regulates the prudential segmentation).
