Newsletter | Brazil opens up for foreign companies to Brazil in public procurements bids!
Since February 11, 2020, foreign companies intending to participate in public procurement bids in Brazil will find a more welcoming environment. With the enactment of Normative Ruling No 10/2020 (“IN 10”) by the Secretariat of Privatization of the Ministry of Economy, registration of foreign companies as suppliers of the Federal Government became simpler.
Registration in the “SICAF” system is a condition for participating in public procurement bids under the electronic trading system proceedings, as well as in the RDC, a specific procedure usually adopted for major infrastructure projects, such as the construction of prisons and hospitals. It may also allow for the execution of certain agreements with governmental entities, which are eligible for a waiver of formal public procurement proceedings, such as strategic partnerships, and the provision of unique services or high-tech goods.
Until the enactment of IN 10, a foreign company willing to participate in any of those proceedings at national level should have a local branch in Brazil. In addition to being potentially time-consuming, such a formality required the company to incur costs before knowing the result of the bid. For that reason, in most cases foreign players used to back down from their initial interest, even in face of a project that could be otherwise attractive.
According to IN 10, from now on foreign companies will only need to appoint an attorney-in-fact in Brazil, with powers to represent the supplier in administrative and judicial matters, including the power to receive service of process. In addition, the company will only need to present sworn translations of the documents required by the public auction notice in case it wins the bid, and not upfront, as it used to be. In order to be admitted in the bid and place a proposal a free translation of the referred documents will suffice.
These simplifications are part of a bigger effort to attract foreign investors to the country. Reducing costs for foreign companies to participate in public procurements shows that Brazil is committed to improve the business environment, welcoming new investors and increase the level of competition in the country.
For further information, contact:
Sérgio Varella Bruna
Henrique Lago da Silveira
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