Taxation and Wealth Succession Abroad

In December 2023, Brazil's Federal Revenue Service enacted Law No. 14,754/2023, introducing significant changes to the taxation of financial investments held abroad. The new legislation brought uniformity to both the tax rate and the reporting frequency, directly affecting individuals who hold investments outside the country, whether directly or through companies they control abroad, as is the case with offshore companies, also known as Personal Investment Companies (PICs).

What Law 14,754/2023 Establishes

The main change introduced by this legislation was setting a rate of 15% on profits earned annually from investments abroad. A Provisional Measure currently going through Congress proposes adjusting this rate to 17.5%, which is still under debate.

In the case of offshore companies (PICs), taxation may vary according to the tax structure adopted by the company, particularly as regards how the financial assets held are accounted for. Depending on the strategy, greater tax efficiency can be achieved — a topic we will examine in depth in our article of 09/15/2025.

Wealth Succession Abroad: An Underexplored but Crucial Topic

One of the least discussed aspects of international investments — yet an extremely important one — is wealth succession abroad, particularly in the United States. Without proper planning, the transfer of assets can become costly and bureaucratic for the heirs.

Tax Residency and Taxation in the United States

For tax purposes, the US tax authorities classify investors as either tax residents or non-tax residents. This distinction is essential, as it directly affects how income and the succession of assets are treated.

In this situation, there are two critical points to observe:

(i) Taxation on Income

Certain income earned by non-resident individuals or legal entities is subject to a 30% withholding at source, where applicable. However, thanks to the principle of reciprocity between Brazil and the United States, federal tax paid in the United States may be used as a tax credit in Brazil and vice versa, provided it is duly documented and reported.

It is essential that the tax be withheld at source, since this withholding is the legal basis for the offset. Special attention should be paid to assets that do not generate withholding, such as some ETFs issued outside the United States — in these cases, the tax credit will not be available.

Brazil's Federal Revenue Service requires that these transactions be duly reported in the income tax return and taxed at the Brazilian rate in force (currently 15%, with a possible change to 17.5%).

(ii) US Estate Tax

Another important concern relates to assets with US situs, such as shares in US companies, REITs and certain ETFs. If the value of these assets exceeds USD 60,000, the non-resident individual investor becomes subject to US estate tax, at rates ranging from 18% to 40% on the amount exceeding that threshold.

This rule covers not only investments but also other assets located in the United States, such as real estate and vehicles.

For this reason, many investors choose to structure their investments through legal entities domiciled in other jurisdictions, as a way of protecting their wealth and their succession plans.

Offshore Companies: Flexibility and Protection for the Brazilian Investor

Regardless of portfolio size, using an offshore structure can be strategic for investors who:

• Want access to a global portfolio with no geographic limitations;
• Seek wealth and succession protection;
• Aim for greater international tax efficiency.

In this context, Personal Investment Companies (PICs) become efficient and secure vehicles, especially when structured with the support of specialized firms.

At Astride, for example, we offer complete offshore structuring solutions with the best cost-benefit ratio on the market, combining tax compliance, wealth protection and the optimization of international investments.