Debt Collection in Brazil: How Foreign Companies Recover Commercial Debts

Your Brazilian buyer took delivery and stopped paying. Or a Brazilian partner owes freight, demurrage or service fees and has gone silent. Recovering commercial debts in Brazil is entirely feasible for foreign companies — but the route you choose at the start determines how fast (and whether) you get paid.

Can a foreign company sue a Brazilian debtor in Brazil?

Yes. A foreign company does not need a Brazilian subsidiary to collect a debt in Brazil. It can send a formal extrajudicial demand, protest unpaid trade instruments, and file suit before Brazilian courts through local counsel, granting a power of attorney. In most commercial cases, suing directly in Brazil is faster than litigating abroad and then trying to enforce the foreign decision here.

What are the collection routes in Brazil?

Route	What it is	When it makes sense
Extrajudicial demand	Formal notice by counsel, with a payment deadline	First step in almost every case — many debts settle here
Protest (protesto)	Public registration of the unpaid debt against the debtor	Fast, inexpensive, hits the debtor’s credit standing
Court collection action	Lawsuit to obtain or enforce payment	When the debtor doesn’t settle; documents define the type of action
Enforcement of foreign judgment / award	Recognition of a decision issued abroad	When you already litigated or arbitrated outside Brazil

Does a foreign judgment work in Brazil?

Not automatically. A foreign court judgment must first be recognized by the Brazilian Superior Court of Justice (STJ) before it can be enforced against assets in Brazil. The same applies to foreign arbitral awards — Brazil is a party to the New York Convention, and Brazilian courts are generally arbitration-friendly, but the award still passes through STJ recognition. This adds time and cost, which is why, for a debt with a Brazilian debtor and Brazilian assets, filing directly in Brazil is often the better strategy.

How long do I have to collect?

As a general rule, claims for debts arising from commercial dealings are subject to a five-year limitation period under the Brazilian Civil Code, though shorter or different periods apply to specific claims (transport, insurance and others have their own rules). Two practical warnings: the clock is usually counted from the date the debt became due, and waiting until the deadline is close dramatically reduces leverage — solvent debtors negotiate; debtors near insolvency don’t.

What documents do I need?

The stronger the paper trail, the faster the recovery. Ideally: the contract or purchase order, invoices, bills of lading or delivery evidence, account statements, and the e-mail exchange acknowledging the debt. In Brazilian procedure, the nature of your documents defines the type of action available — some documents allow direct enforcement, skipping the discussion phase entirely. This is exactly what a Brazilian lawyer should assess before filing.

Frequently asked questions

Do I need to travel to Brazil? No. Collection is handled by power of attorney. Hearings, when they happen, increasingly admit remote participation.

Can I charge interest and currency correction? Yes. Brazilian courts apply monetary correction and statutory or contractual interest. Debts in foreign currency are converted under Brazilian rules at enforcement.

What if the debtor is insolvent or in judicial reorganization? Your claim must be filed in the insolvency proceeding within specific deadlines — acting quickly matters even more.

Have an unpaid debt with a Brazilian company? Talk to our team — we reply in English. Or write to contato@gentiladvogados.com.br.