Frequently asked questions

Generally, a person may become a U.S. tax resident through U.S. citizenship, through a Green Card, or through the Substantial Presence Test. There are exceptions and specific rules that may change the outcome.

Generally, yes. Tax residency normally begins on the date of entry into the U.S. with the Green Card or, in certain situations, on the date the Green Card is issued.

The calculation does not simply depend on staying fewer than 183 days in the year. The Substantial Presence Test also takes into account days of presence in the two preceding years, using a specific formula.

Broadly speaking, you need at least 31 days of presence in the current year and 183 weighted days counting:

• all the days in the current year;
• 1/3 of the days in the prior year;
• 1/6 of the days in the second prior year.
  There are exceptions and special rules that may apply.

Yes. Both countries may consider a person a tax resident under their own rules. In that situation, mechanisms provided by treaty or by domestic law may be applied to determine the appropriate tax treatment.

Generally, U.S. tax residents are subject to tax on their worldwide income. This means income from Brazil and from other countries may need to be reported and taxed in the United States, though there are mechanisms that allow tax paid in one country to be credited in the other.

The Exit Tax is a form of taxation that may apply to certain individuals who cease to be U.S. tax residents, including certain long-term residents who give up their Green Card and individuals who renounce U.S. citizenship.

For purposes of the long-term resident rules, the relevant period is generally 8 of the last 15 tax years as a lawful permanent resident. The calculation has specific rules and should be analyzed on an individual basis.

No. Reaching the 8-year period does not by itself mean tax will be due. It is necessary to determine whether the individual is a covered expatriate and whether the other legal requirements are met.

For someone who falls under the covered expatriate rules, the tax may take worldwide assets into account and apply a mark-to-market mechanism, as if certain assets had been sold before expatriation.

Ideally, planning should begin before expatriation (we suggest starting after 6 years with the Green Card). For Green Card holders, it is especially important to review the situation a few years before completing the period that is relevant for the long-term resident rules.

Among the most common categories are:

• wages;
• income from services;
• interest;
• rents;
• dividends;
• profits from pass-through entities;
• capital gains.

No. Ordinary income is subject to the progressive income tax rates. Long-term capital gains, on the other hand, may be subject to the preferential rates of 0%, 15%, or 20%, depending on income and filing status.

Generally, it is the gain realized on the sale of an asset held for more than one year. The specific rules depend on the type of asset and the transaction.

No. Qualified dividends may receive treatment similar to long-term capital gains, while other dividends may be taxed as ordinary income.

The top federal marginal rate for individuals is currently 37%. The effective rate depends on taxable income, filing status, deductions, and other factors.

Yes. Certain taxpayers may be subject to the Net Investment Income Tax (NIIT) of 3.8% on investment income and other passive income.

It is a fixed deduction that reduces the taxpayer's taxable income without the need to list deductible expenses individually.

They are deductible expenses that the taxpayer lists individually on the return, provided they meet the legal requirements and are properly documented.

It depends on the situation. Generally, you compare the amount of the Standard Deduction with the total itemized deductions available in order to determine which option is more advantageous.

In certain circumstances, yes. Property tax may be part of the deduction for state and local taxes (SALT), subject to the applicable limits.

In certain situations, yes. The law sets limits tied to the amount of the debt and the type of property.

Certain medical expenses may be deductible as itemized deductions, but there are requirements and a threshold tied to adjusted gross income.

Certain contributions to qualified organizations may produce a tax benefit, subject to the limits and requirements of current law.

Possibly. Even when an account generates no tax, it may be subject to reporting obligations such as the FBAR and/or Form 8938, depending on the balance and the circumstances.

Simply holding money in a bank account normally does not generate income tax. However, interest and other income produced by the account may be taxable.

Generally, yes. For a U.S. tax resident, interest received from foreign investments normally has to be included on the U.S. return and is generally treated as ordinary income.

In many cases, yes, through the Foreign Tax Credit, provided the applicable requirements and limitations are met.

Not necessarily. The decision depends on the taxpayer's financial and wealth objectives. That said, the tax and reporting consequences should be evaluated.

PFIC stands for Passive Foreign Investment Company. It is a U.S. tax classification that applies to certain foreign companies whose income or assets are predominantly passive.

Many Brazilian investment funds may be classified as PFICs for U.S. tax purposes. The analysis has to be done on a case-by-case basis.

The default regime may result in unfavorable taxation, including special rules for gains and certain distributions, plus an interest charge on deferred tax.

Generally, each investment that qualifies as a PFIC may require a separate Form 8621, depending on the situation.

It is possible, but the decision should be made after weighing the tax and compliance impact. In some cases, keeping the investment may create a disproportionate tax and administrative burden.

There is no universal answer. Depending on the situation, restructuring before U.S. tax residency begins may be advantageous, but the Brazilian and U.S. tax impact should be analyzed before any sale.

Not necessarily. The U.S. treatment does not automatically follow from how the product is classified under Brazilian law.

Yes. Depending on its structure, on the underlying assets, and on how the investment is treated for U.S. tax purposes, there may be U.S. tax.

Yes. If the VGBL invests in foreign funds that meet the PFIC criteria, issues related to that regime may arise.

Depending on the structure and the amounts involved, there may be filing and reporting obligations. The analysis should be done on an individual basis.

Not necessarily. Redeeming it may have tax consequences in Brazil and should be weighed against the available alternatives.

In many cases, yes. An ownership interest in a foreign company may create reporting obligations to the IRS, even when no tax is immediately due.

No. The company remains organized in Brazil. What changes is the tax treatment your ownership interest may receive in the United States.

It is a foreign corporation controlled by certain U.S. shareholders, under the criteria of U.S. law. CFCs may be subject to specific taxation and reporting rules.

Yes. Depending on the structure and on the application of rules such as Subpart F and GILTI, certain income of a controlled foreign corporation may be included in U.S. taxable income before it is distributed.

Depending on the structure, forms such as Form 5471, Form 8865, or Form 8858 may be required, among others.

In some cases, it may be advantageous. The analysis should take place before U.S. tax residency begins, taking into account the corporate structure, ownership, activity, accumulated earnings, and the owner's objectives.

If the foreign property is rented out or sold, yes. Rental income is taxed as ordinary income, and expenses related to the property may be deducted.

Generally, yes. U.S. tax residents must report their worldwide income, including rental income from property located in Brazil.

Certain expenses connected to producing the rental income may be deductible under U.S. rules. Depreciation may also be relevant.

In many cases, a Foreign Tax Credit may be available, subject to the applicable rules and limitations.

The gain may be subject to U.S. tax. The gain calculated for U.S. purposes may differ from the Brazilian calculation, particularly because of the currency rules, tax basis, and depreciation.

In certain cases it may be a pre-immigration planning alternative, stepping the assets up to fair market value for U.S. purposes. Any restructuring should take into account taxation in both countries, succession, asset protection, and ongoing maintenance costs.

It is the U.S. federal tax on the transfer of assets at death.

It is the federal tax on certain transfers of assets made during life.

Not necessarily. For this tax, the concept of domicile is what matters, and it is different from the concept of tax residency used for income tax.

Domicile is a question of facts and circumstances, involving factors such as intent to remain, family, residence, economic interests, and immigration status.

Yes. Individuals domiciled in the United States may be subject to the Estate Tax on their worldwide assets.

Generally, a non-domiciled individual is subject to U.S. Estate Tax on certain assets treated as situated in the United States if the total exceeds $60,000.

Because certain U.S. assets may become subject to the Estate Tax, and the exemption available to a non-domiciled individual may be significantly smaller than the one available to a U.S. citizen or domiciliary.

Yes, and for significant wealth this may be one of the most important moments to review the ownership structure. Gifts, asset restructuring, corporate structures, and other strategies may be considered depending on the case.

Not necessarily everything, in the sense that not every asset carries the same reporting obligation, but U.S. tax residents are subject to tax on their worldwide income and may have a number of information reporting obligations regarding foreign assets.

Not necessarily. There are Foreign Tax Credit mechanisms and other rules meant to reduce double taxation, but they have limitations and do not work the same way for every type of income.

There is no single answer. The decision should take into account Brazilian tax, U.S. tax, PFIC exposure, currency, liquidity, succession, and wealth objectives.

In some cases, it may be advantageous. In others, the move may create unnecessary tax or costs. The ideal is to run the analysis before the move, while more planning alternatives are still available.

One of the most common mistakes is treating the move as purely an immigration matter. A change of residence can completely transform the tax treatment of investments, companies, real estate, previdência (Brazilian retirement products), and family wealth.

Before the move. The larger and more diversified the wealth, the more important it is to run the analysis well in advance.

An offshore can make it easier to organize and manage international investments, to plan the succession of assets, and to centralize assets held abroad.

For individuals who are neither U.S. citizens nor U.S. residents, certain U.S. assets held directly by the individual may be subject to estate tax when they exceed US$60,000, with progressive rates of up to 40%. Depending on the structure and the assets involved, the offshore may reduce that exposure.

The offshore may also provide greater continuity in the management of the estate and make succession easier. Its benefits, however, depend on the investor's profile, the maintenance costs, and the tax consequences in Brazil and abroad.

Astride chose the British Virgin Islands and the Bahamas because of its experience in those jurisdictions, the stability of their legal systems, the wide international use of their corporate structures, and the availability of specialized providers.

The choice between the two depends on each investor's objectives, assets, and needs.

Yes. The annual fee includes the registered agent's fees and the government charges required to keep the company active in the BVI.

Maintenance includes:

• registered agent and government fees;
• the company's bookkeeping;
• support with Form W-8BEN-E;
• one annual corporate act for capital contributions or reductions;
• support with the tax calculation in Brazil;
• a template for the DIRPF (the Brazilian individual income tax return) and, where applicable, for the Capitais Brasileiros no Exterior (CBE) return (the Brazilian Central Bank's declaration of Brazilian capital held abroad) in relation to reporting the offshore;
• an annual activity report and a review of any economic substance obligation.

Extraordinary services or more complex structures may give rise to additional costs, which will be disclosed in advance.

Yes. The annual maintenance fee for your company at Astride is fixed, regardless of the capital invested.

Yes. The offshore can be transferred so that another provider takes over its accounting and maintenance. You simply need to contact Astride and request the transfer, which may involve documents, approvals, and additional costs depending on the jurisdiction and the new provider.

Moving to the BVI can be done through a redomiciliation, provided that the current jurisdiction and the BVI allow the company to continue.

The process involves reviewing the corporate documents, approving the transfer, settling any outstanding obligations, and registering the company in the new jurisdiction. If redomiciliation is not permitted, it may be necessary to incorporate a new company and transfer the assets.

The timeline and the costs vary according to the jurisdiction and the company's situation. Astride can review the case and act as an intermediary with the local professionals.

Properly closing the offshore must be done through a formal liquidation or dissolution, following the rules of the jurisdiction where it was incorporated.

Before closing, it is necessary to liquidate or transfer the assets, settle obligations, close bank accounts, prepare the corporate documents, and assess the tax effects in Brazil and abroad. The process may require engaging a local liquidator and may generate additional costs.

Failing to pay the annual fees does not immediately close the company and may result in penalties, loss of good standing, and outstanding obligations. Astride can provide guidance and act as an intermediary in the formal closing process.

Tax rules may change both in the BVI and in Brazil. If a change makes the structure less efficient, alternatives may be considered, such as adapting the company, changing the tax regime, reorganizing the investments, or transferring the offshore to another jurisdiction.

Astride monitors legislative changes and can advise on the adjustments needed in light of each investor's situation.

Yes. Astride uses standard corporate documents, but it can arrange for tailored clauses to be drafted by a lawyer qualified in the offshore company's jurisdiction. In that case, there will be an additional cost for engaging that professional.

The offshore company has incorporation documents equivalent to the contrato social (the constitutional document of a Brazilian company), which are available on Astride's platform.

As a rule, it is not necessary to define a specific corporate purpose, since the company may carry out different lawful activities. However, regulated activities may require authorization or a license, and the structures maintained by Astride are intended mainly for financial and real estate investments.

The company must also report its activities annually to the authorities of the jurisdiction where it was incorporated. Astride handles this reporting and checks whether the economic substance rules apply.

If the director passes away, a new director must be appointed in accordance with the company's constitutional documents and the rules of the jurisdiction where it was incorporated. Generally, the remaining shareholders formalize the appointment through a resolution and update the necessary corporate records.

Economic substance is the set of requirements that demonstrates that a company carries out activities consistent with its structure and its presence in the jurisdiction where it was incorporated.

In the British Virgin Islands (BVI), companies must report information about their activities on an annual basis. The actual economic substance requirements depend on the activity carried out and on how it is classified under local law.

Yes. It is possible to create layers of companies, with one offshore company being a shareholder in another company that directly holds the investments.

However, this structure does not by itself avoid taxation in Brazil. Indirectly controlled entities are also subject to the rules of Law No. 14,754/2023, and their profits may be taxed annually at a rate of 15%.

Using layers may be useful for corporate, succession, or risk-segregation reasons, but it increases the costs and obligations of the structure. For that reason, it should be analyzed on an individual basis.

Yes. An offshore company may be a shareholder in a holding (a Brazilian holding company) in Brazil, and a Brazilian holding may also hold an interest in an offshore company. Each structure has different tax, corporate, and regulatory effects.

When the offshore company invests in a Brazilian company, it is treated as a foreign investor, even if its shareholders are Brazilians residing in the country. In that case, it will be necessary to comply with the registration, corporate, and reporting obligations applicable to foreign capital.

Astride can help assess which structure is most appropriate and support its implementation.

For offshores acquired on or after January 1, 2024, the election of the transparent regime must be made on the first Declaração de Ajuste Anual (the Brazilian annual income tax return) filed after the acquisition.

For companies already held on December 31, 2023, the deadline for making the election ended with the filing of the return for calendar year 2023, in 2024.

The election is irrevocable for as long as the taxpayer holds the company. If there is more than one shareholder who is a tax resident in Brazil, all of them must adopt the same regime.

Until 2023, as a rule, an individual resident in Brazil was taxed on the profits of a foreign company only when those profits were made available. Law No. 14,754/2023 introduced an anti-deferral rule as of 01/01/2024.

Under that rule, the profits of the controlled entities covered by the Law are determined in the financial statements and taxed annually at a rate of 15%, regardless of whether they are distributed to the shareholder.

As a rule, no. In controlled entities subject to Law No. 14,754/2023, profits are taxed annually at a rate of 15%, through the Declaração de Ajuste Anual (the Brazilian annual income tax return), even if they remain reinvested in the company.

Certain transactions, such as a capital reduction with an exchange rate gain, may require the tax to be determined and paid in the month following the transaction.

No. Coupons from bonds classified as financial investments abroad are, as a rule, taxed at a rate of 15% in the Declaração de Ajuste Anual (the Brazilian annual income tax return), with no monthly DARF (the Brazilian federal tax payment slip) payment.

If the bonds are held by an opaque offshore, the income will be part of the company's accounting result and will be taken into account when its profits are determined annually.

For opaque companies

In controlled entities subject to annual taxation, the 15% tax on the profit determined in the financial statements is calculated in the Declaração de Ajuste Anual (the Brazilian annual income tax return) and paid within the filing deadline.

In a capital reduction, any exchange rate gain on the interest will be taxed as a capital gain, payable by the last business day of the month following the transaction and at rates from 15% to 22.5%.

Profits accumulated through December 31, 2023 are taxed at a rate of 15% when they are actually made available to the shareholder, and are determined in the Declaração de Ajuste Anual.

For transparent companies

Income from financial investments, such as interest, dividends, and realized gains, is determined in the Declaração de Ajuste Anual and, as a rule, taxed at a rate of 15%. Unrealized gains are not taxed.

Other assets, such as real estate and equity interests, may follow different rules and deadlines, depending on the nature of the asset.

Astride may provide an estimate based on the company's results and on the transactions carried out during the year.

Yes. Each co-owner who is a Brazilian tax resident must report their interest in the offshore according to their corporate and economic rights, at the corresponding acquisition cost.

The JTWROS clause does not remove this obligation. Under the opaque regime, what is reported is the interest in the company; under the transparent regime, each co-owner reports their share of the underlying assets and rights. The split must follow the corporate documents and the amounts actually contributed by each holder.

As a rule, you should use the closing sell rate for the dollar published by the Banco Central (Brazil's central bank) on the date of the taxable event.

For opaque companies, capital contributions are converted at the sell rate on the date of each contribution or asset transfer. For transparent companies, the rate applicable on the acquisition date of each investment must be preserved.

In the capital reduction of an opaque company, the amount received must also be converted at the closing sell rate on the date of the transaction.

The buy rate is used in specific situations, such as converting tax paid abroad, using the payment date.

No. Tax withheld in the United States is not treated as a deductible expense, but it may be used as a credit to offset the tax due in Brazil.

In an opaque offshore, foreign tax levied on income included in the company's results may be credited against the Brazilian tax due on that company's total profit, subject to that limit. Any excess may not be used in other years, by another offshore, or against personal income.

In a transparent offshore, the credit is limited to the Brazilian tax due on the income of the corresponding ETF.

Only expenses that are necessary and directly related to the company's activities may be taken into account in determining its results, provided they are properly documented.

Supporting documentation:
The shareholders must keep documents showing the business nature of the expenses, such as contracts, invoices, statements, calendars, emails, and meeting minutes.

Personal spending:
Personal expenses of the shareholder or of their dependents, such as leisure travel, are not deductible and must be recorded according to their nature, generally as a distribution of profits or a capital reduction, with the corresponding tax effects.

Accounting responsibility:
The accountant makes the entries based on the information and documents provided by the shareholders, who are responsible for their accuracy.

The amounts sent to the company are recorded as capital contributions, taking into account the date and the exchange rate of each transaction. You may make several contributions over the course of the year, and Astride will consolidate them into a single annual corporate act, called a “Resolution”.

This service is included in Astride's maintenance fees.

The most common ways of taking funds out of a foreign company are the distribution of profits and the capital reduction. The classification depends on the company's balance sheet position, on the source of the funds, and on how the transaction is formalized at the corporate level.

A distribution of profits uses the company's accumulated results. In controlled entities subject to annual taxation, profits already taxed at a rate of 15% are not taxed again when they are distributed. Profits from before 2024 or subject to another regime may be taxed when they are made available to the shareholder.

A capital reduction represents the return of part of the capital contributed. Any exchange rate gain on the interest may be taxed as a capital gain, with rates from 15% to 22.5%.

Astride can review the company's balance sheet position and advise on the proper way to formalize the withdrawal.

A capital reduction is limited to the company's available share capital and must comply with its corporate documents, its financial situation, and the rules of the jurisdiction where it was incorporated.

Before the transaction, it is necessary to check whether there are accumulated profits, whether the company will remain solvent, and whether the withdrawal can properly be characterized as a return of capital.

Any exchange rate gain on the interest will be taxed as a capital gain, with rates from 15% to 22.5%. Astride can review the balance sheet and indicate the amount available for the reduction.

No. The company's bank or investment account does not have to be held in the country where the offshore was incorporated. It may be maintained in the United States or in another jurisdiction, depending on availability and on the financial institution's rules.

Yes. Astride is currently integrated with all U.S. banks and brokerages.

The investments are managed by the investor or by a professional engaged and licensed for that role.

Astride does not make investment decisions and does not move the company's assets. Its role is limited to incorporating and maintaining the offshore, to accounting, and to corporate and tax support.

The account is opened by the bank or the brokerage in the company's name, with documentary support from Astride.

Once the company has been incorporated and the bank or investment account has been approved, the assets may be transferred from the individual's account to the company's account, in accordance with the financial institution's procedures.

Astride incorporates the company in less than 24 hours after the registration of the holder and of the joint tenants has been approved. Approval of the account by the bank takes 2 to 3 days on average, but the timeline may vary. The transfer must also observe the tax treatment applicable to the regime chosen.

Not necessarily. If the rules of the stock plan and of the custodian institution allow it, the shares may be transferred and contributed to the offshore's capital without having to be sold.

Under the opaque regime, the contribution must be made at market value, and any gain may be taxed in Brazil. Under the transparent regime, as a rule, the assets may be contributed at their acquisition cost. The choice of regime should be analyzed according to the characteristics of the stock plan and the investor's tax situation.

Joint tenants may only move funds or make withdrawals from the offshore's investment account if they are also appointed as directors of the company. This position resembles that of a shareholder of the company who, although a beneficiary of a future succession of assets, is not authorized to operate the business's accounts the way a director who works and signs for that company's day-to-day affairs does. Generally, the shareholder who also serves as a director is the owner of the money.

Yes, provided the withdrawal is properly formalized and recorded in the accounts, generally as a distribution of profits or a capital reduction, with the corresponding tax effects.

The company may carry out other lawful activities, in accordance with its corporate documents and with the rules of the jurisdiction where it was incorporated. However, the structures maintained by Astride are intended for financial investments and for the acquisition of real estate.

Carrying out other activities must be analyzed in advance and may require corporate amendments, licenses, additional services, or the engagement of other professionals.

The succession process depends on the structure adopted, on the corporate documents, and on the laws applicable in Brazil and in the country where the offshore company was incorporated.

Instruments such as JTWROS, Transfer on Death (TOD), a trust, and a will may make the transfer of the shares easier and reduce the need for proceedings abroad. Their effects, however, are not necessarily automatic and do not eliminate any succession and tax obligations in Brazil.

Astride can help you choose and implement the most appropriate strategy.

The will records how the owner wishes their assets to be distributed after death. It guides succession but, as a rule, it does not eliminate the need for an inventário (the Brazilian probate proceeding) or an equivalent procedure in the jurisdictions involved.

JTWROS (Joint Tenants with Right of Survivorship) is a form of joint ownership. Each joint tenant holds an undivided interest in the shares and, on the death of one of them, their interest is transferred to the survivors, in accordance with the corporate documents and the applicable law. This structure may avoid an inventário over the shares abroad, but it does not necessarily eliminate succession and tax obligations in Brazil. The automatic transfer occurs on death, and not when a shareholder simply withdraws.

The trust allows the settlor to establish rules for the management and distribution of the assets by the trustee to the beneficiaries. It offers greater flexibility to define beneficiaries, percentages, conditions, and the timing of distributions.

Astride offers trust structures and can help define the distribution rules according to the investor's objectives and what the chosen jurisdiction allows. The best option should be analyzed on an individual basis, taking into account the legal, tax, and succession aspects in Brazil and abroad.

JTWROS (Joint Tenants with Right of Survivorship) is a form of joint ownership with a right of survivorship. Each joint tenant holds an undivided interest in the company's shares and, on the death of one of them, their interest is transferred to the surviving joint tenants, in accordance with the corporate documents and the applicable law.

This structure may avoid an inventário (the Brazilian probate proceeding) over the shares abroad, but it does not necessarily eliminate succession and tax obligations in Brazil. Each joint tenant who is a Brazilian tax resident must assess the obligation to report their interest in light of their corporate and economic rights and the amounts actually contributed.

A JTWROS has joint tenants, not beneficiaries. In general, there is no single legal limit on the number of joint tenants, but there may be restrictions in the corporate documents, in the company's jurisdiction, or at the financial institution.

Yes. It is possible to add or remove JTWROS joint tenants and to change the company's directors, provided that the corporate documents, the rules of the jurisdiction, and the requirements of the financial institution are observed.

In general, the change requires the agreement of the joint tenants and may produce tax or succession effects, especially where an interest is transferred without consideration. The transaction should be analyzed and formalized in advance.

JTWROS is a form of joint ownership used to make succession easier. Each joint tenant holds an undivided interest in the offshore company's shares and, in the event of death, the deceased's interest is transferred to the surviving joint tenants, in accordance with the corporate documents and the applicable law.

JTWROS does not mean that each shareholder individually owns 100% of the shares, nor does it necessarily eliminate succession and tax obligations in Brazil.

If one of the JTWROS joint tenants is a U.S. tax resident, their interest in the offshore company may give rise to tax obligations and specific filings with the IRS, including filings related to the ownership of a foreign company.

Adding or transferring shares may also produce tax effects in the United States. A trust does not automatically eliminate these obligations and may give rise to additional reporting.

For this reason, the structure should be analyzed before the joint tenant is added. Astride can support this planning.

If there is no joint tenant or other succession instrument, the offshore company's shares may become subject to a recognition or succession proceeding in the country where the company was incorporated.

The heirs may need to produce documents from the Brazilian inventário (the Brazilian probate proceeding), sworn translations, and other supporting evidence required by the foreign jurisdiction. The process can be lengthy and generate additional costs.

The procedures vary according to the corporate documents and the applicable law, which is why it is advisable to define a succession strategy in advance.

A will is a document that sets out how assets are to be distributed after death. It makes succession easier but, as a rule, it does not avoid the inventário (the Brazilian probate proceeding) or an equivalent procedure, which will follow the laws of the jurisdiction where the asset is located.

A trust is a legal structure used to manage and transfer assets according to rules defined by the settlor. The assets are managed by the trustee for the benefit of the persons named and, in general, may be transferred without an inventário (the Brazilian probate proceeding) abroad.

The main figures are:

• Settlor: the person who establishes the trust and is responsible for defining its rules;
• Trustee: responsible for managing the assets in accordance with the trust document;
• Beneficiaries: the persons named to receive the assets or the income from them;
• Protector: an optional figure who may oversee certain acts of the trustee.

The protector and the trustee perform different functions. Depending on the jurisdiction and the rules of the trust, engaging a professional trustee may be required.

In Brazil, the assets remain attributed to the settlor until they are distributed to the beneficiaries or until the settlor's death, whichever occurs first. The transfer will be treated as a gift or as an inheritance, as the case may be.

No, the Protector/trustee cannot be a U.S. resident. They may only be a beneficiary of the trust.

It is important to assess the exposure to U.S. estate tax. For people who are neither U.S. citizens nor U.S. residents, certain assets located in the country may be subject to estate tax when their value exceeds US$60,000, at a progressive rate that can reach 40%.

Whether it applies depends on the type of asset and on the structure used. Astride can help with the analysis and with succession planning.

The best structure depends on the purpose of the property, on how it is acquired, on the financing, and on the investor's succession and tax planning.

When a person who is neither a citizen nor a resident of the United States acquires a U.S. property directly, or holds it through an LLC that is disregarded for tax purposes, there may be exposure to U.S. estate tax, at a rate that can reach 40%.

One structure used to reduce that exposure is an offshore company (PIC) as the owner of a U.S. company that holds the property. However, this structure does not automatically eliminate all taxes and may create additional costs and obligations in the United States and in Brazil.

If the property has already been acquired, restructuring may involve transferring the property or the equity interests. Depending on the case, the application of non-recognition of gain rules and obtaining a certificate to reduce or waive the withholding required under FIRPTA may be considered. These procedures depend on how the transaction is characterized and are not automatic.

The Brazilian tax regime applicable to the offshore company must also be analyzed. On a transfer of assets to an opaque offshore company, they may need to be valued at market value, with any gain taxed under the applicable rules. Under the transparent regime, in certain situations, the acquisition cost may be preserved.

Astride can help throughout this process, analyzing the current structure and supporting the planning to determine the most appropriate alternative, taking into account the legal, tax, and succession aspects involved.

Yes. The income may be used to buy real estate in the United States. Astride can help define the most appropriate structure for the acquisition, taking into account the tax, succession, and wealth planning effects in Brazil and in the United States.

It is possible, but it is not advisable to hold financial and real estate assets in the same LLC Partnership. That combination may increase the U.S. tax exposure of the financial investments, in addition to mixing activities with different risks and tax treatments.

Generally, it is recommended to use separate structures for financial assets and for real estate assets.