CMS Expert Guide for taking security in Brazil

Yes.

Yes.

No, guarantees are only regulated as financial services when issued by a Peruvian regulated financial institution.

Yes, but see comments in Q4

Yes, subject to the restrictions set forth in Q4.

Yes, subject to the restrictions set forth in Q4.

Financial assistance

Under Peruvian law, companies are prohibited from granting securities (including guarantees) in connection with the acquisition of their own equity interests. This rule encompasses both indirect and indirect acquisitions of equity interest.

Transfer pricing rules

Transfer pricing rules will apply in the case of transactions between related parties.

Besides the agreement being set forth in writing, the are no other legal formalities to be complied with. It is advisable:

• if the guarantee is being granted by a natural personal, such person is married and such marriage is not governed by separate property rules, to have the grantor’s spouse execute the agreement; otherwise, only the assets solely owned by the grantor (if any) would be eligible for collection in an enforcement event
• to have the guarantee documented in a public deed to avoid questionings regarding the execution of the agreement
• to complement the guarantee with an aval by the grantor to any promissory note or similar instrument issued by the guaranteed obligor.

Yes, but the guarantee may not be enforced until such obligation becomes due and liquidated.

Yes, but the guarantee/security may also be drafted to secure the obligations arising from the main obligation being declared void, such as restitution obligations or cost and expenses incurred in connection with the transaction, in each case provided that the obligations become liquid.

Yes. However, trusts are subject to a maximum legal term of 30 years.

Yes. However, please find some practical considerations below:

Immovable property

In the case of mortgages over immovable property (including real estate, ships and concessions) and pledges over partnership interests (other than shares), security shall be documented in a public deed which shall be registered with the Peruvian Public Registry. 

In case of pledges over partnership interests, in order for them to be enforceable before third parties, pledges shall also be registered with the Sistema Informativo de Garantías Mobiliarias – SIGM); more information on this item is given below. To achieve such registration, the secured creditor (or security agent) shall need to produce and file the following documentation for registration: 

• powers of attorney (POA) in favour of a representative able to physically execute the public deed in Peru; such POA shall be translated by an official translator if drafted in a language other than Spanish (alternatively, they can be executed in double column) and apostilled
• an incumbency certificate regarding the authority of the person or corporate organ to grant the POA set forth in the item directly above; such certificate shall be translated by an official translator if drafted in a language other than Spanish (alternatively, they can be executed in double column) and apostilled
• a recent certificate of good standing (or analogous document) produced by a competent public authority (or an authorised corporate official if no such authority exists), which shall be translated by an official translator if drafted in a language other than Spanish (the “Register Documentation”).

Movable property

With respect to security granted over movable property, although registration (i.e. publication in the SIGM) is not required for validity, it is necessary for enforceability against third parties. Under Peruvian law, only the secured party is authorised to publish security in the SIGM. In order to create the account needed for such purposes, POA must be granted in favour of a local representative and registered with the Public Registry. For registration, the Register Documentation will be required.

Although trusts may be created by private deeds, trustees usually require them to be documented in public deeds and registered. For both actions, in addition to POA granted to a representative able to physically execute the public deed in Peru, the Register Documentation will be required.

Yes, agent structures are market standard in Peru. 

However, there is a risk that such structures may be challenged under Peruvian law, as the role of a security agent is not formally recognised.

Accordingly, we recommend including provisions in the transaction documents expressly stating that the secured creditors have granted POA to the agent, authorising it to act as their representative and to hold and enforce the relevant security on their behalf. The documents including such provisions do not need to be governed by Peruvian law.

Although parallel or abstract debt structures are theoretically possible, to our knowledge they are not used in the Peruvian market.

If security was granted directly to the assigning creditor, the security documents would need to be assigned to the assignee following the same formalities applicable to the creation of the security, including registration when required for validity or enforceability before third parties. The documents can allow such assignment to take place without the consent of the securing party. However, in any case, the assignment must be notified to the debtor in order to be enforceable against it.

If security was granted to a security agent for the benefit of the assigning creditor, provided that the security document sets forth that the secured parties include their assignees, no further actions would be required in connection with such document. As set forth in Q10 above, we recommend including provisions in the assignment documents (if not already included in the transaction documents) expressly stating that the assignee grants POA to the agent, authorising it to act as their representative and to hold and enforce the relevant security on their behalf.

Peruvian law allows for the definition of guaranteed/secured obligations to be broadly construed to cover any changes thereof (including amounts, identity of the secured debtors or novation). If construed in that way, no amendments would be required. However, in order to minimise any risk, it is generally advisable to execute amendments to the relevant security agreements in order to update the guaranteed/secured obligations and register them following the same formalities applicable to the creation or enforceability before third parties of the security. An undertaking by the securing party to enter into such amendments, and file and comply with all required registrations, may be included in the security documents.

Mortgages and pledges require a maximum amount of the secured obligations to be set forth. If, as a consequence of changes to the secured obligations, such maximum amount is below the value of the secured obligations or otherwise insufficient, an amendment complying with the formalities applicable to the creation of the security and, to the extent required for the validity of the security or its enforceability before third parties, registration would be required. An undertaking by the securing party to enter into such amendments, and file and comply with all required registrations, may be included in the security documents. Notwithstanding the foregoing, it is market practice to draft the maximum amount of the secured obligations so that it will be automatically increased should the aforementioned situation take place, but such automatic increases (even if duly registered at the creation of the security) may be challenged.

Yes, securities created over assets physically located in Peru at the time of creation of the security must be governed by Peruvian law. However, assets located in Peru may be transferred to trusts governed by foreign law provided that, for Peruvian law, such transfer will be deemed a transfer of property to the trust (or the relevant trust party, as applicable under the law governing the trust) and not a trust assignment. 

Intangible assets governed by Peruvian law (e.g. receivables) may be subject to foreign law securities. However, any pledge created under Peruvian law over such assets will automatically have a higher seniority. 

Yes, under Peruvian law Peruvian courts have exclusive jurisdiction over claims relating to assets located in Peru (rights in rem).

Moreover, disputes concerning mortgages may not be validly submitted to arbitration to the extent the dispute involves in rem rights.

No.

1 year prior to the commencement of the insolvency proceeding by the grantor of the security or notification of the start of the proceeding to such party. 

Yes, multiple security interests may be created in a single instrument if the instrument satisfies the formalities applicable to every type of collateral. In practice, separate instruments are often used because real estate, movable assets, receivables, shares, quotas, IP and accounts have different registration, tax, notarisation and enforcement mechanics.

Brazil has no English-law floating charge. Similar economic results may be achieved for specific asset pools through fiduciary assignment of receivables, security over bank accounts, security over rotating inventory or omnibus security documents, but each asset class must still be identifiable and perfected under the applicable rules.

Yes, security may be granted to secure liabilities of a holding company, shareholder, subsidiary or other affiliate, including non-Brazilian group debt. Brazilian law does not generally prohibit upstream, downstream or lateral security. The same considerations described in Q3 and Q4 apply: corporate authority, approvals, directors’ duties, related-party rules, transfer pricing, tax, solvency and potential insolvency avoidance risk. Recitals and corporate approvals should expressly record the direct or indirect benefit to the security provider.

No, not generally. A personal guarantee does not need notarisation. For in rem security over real estate, a public deed is generally required for the creation or transfer of real rights over real estate above the statutory threshold, unless a specific statute gives a private instrument the effect of a public deed, as is common for fiduciary alienation of real estate and certain credit instruments. Notarial recognition of signatures is often requested by registries and counterparties for private instruments, although it is not always a condition of validity.

Yes, for most security interests. Registration or an equivalent publicity act is required for creation, priority or effectiveness against third parties.

For share pledges and fiduciary transfers over shares of a Brazilian corporation, perfection generally requires both RTD registration and annotation in the company’s Share Registry Book or, for book-entry shares, in the records of the relevant financial institution/custodian. These steps are not merely evidentiary; without the proper annotation/registration, the creditor may not have an enforceable in rem right against third parties.

For bank account credit rights and receivables, RTD registration and written notice to the debtor of the credit right (the account bank or account debtor) are normally required or advisable. Real estate security must be registered with the competent RER. Quotas, IP, vehicles, aircraft, vessels and financial assets have asset-specific perfection routes. There is generally no periodic renewal requirement for properly registered Brazilian security, but amendments should be registered if the secured obligations, parties, collateral or maturity change.

Documents may be executed in a foreign language as a matter of contract, but documents submitted to Brazilian courts, notaries, public registries or authorities must be in Portuguese or accompanied by a sworn translation into Portuguese. Public deeds are executed in Portuguese, although bilingual instruments and translator participation may be used. For cross-border transactions, bilingual Portuguese-English security documents are common, particularly where registration in Brazil is required.

Other perfection steps depend on the collateral. These may include notification to debtors of assigned receivables, acknowledgement or control arrangements with account banks, notation in share or quota records, custodian or B3 entries (Brasil, Bolsa, Balcão – primary stock exchange located in São Paulo), INPI recordal, insurance loss-payee endorsements, warehouse acknowledgements, lessor consents, corporate approvals, spousal consents, POA, apostilles and sworn translations.

Notifications:

Yes, in most cases registration protects the secured creditor by making the security effective against third parties and establishing priority. However, registration does not always physically prevent subsequent dealings. For example, an RTD-registered fiduciary assignment over an ordinary operating bank account may be valid and perfected, but without account bank control, the debtor may continue to withdraw funds before enforcement. Creditors should combine registration with contractual covenants, possession or control mechanisms, custodian blocks, account control or escrow arrangements, notices, insurance, monitoring and periodic searches.

Priority is generally determined by the time and place of perfection, usually the date and time of pre-notation, registration, annotation, possession, notice or book/custodian entry in the relevant registry or system. A properly perfected security interest generally prevails over later or unperfected interests, subject to specific statutory priorities.

For pledges, Brazilian law recognises first-ranking and junior-ranking security. Priority among competing pledges over the same collateral is generally determined by the order of registration or other applicable perfection step. For fiduciary transfer/assignment, the first perfected fiduciary creditor generally has ownership or restitution rights rather than a mere priority claim; concurrent fiduciary transfers over the same asset are generally not possible, although parties sometimes use conditional structures that become effective only after release of the prior fiduciary security.

In insolvency, pledge creditors generally rank as secured creditors up to the value of the collateral, subject to the statutory order of claims, including certain labour, tax and estate expenses. Fiduciary creditors are generally outside the judicial reorganisation effects and may seek restitution in bankruptcy, but enforcement can still be affected by court orders, stay-period practice and arguments that the collateral is essential to the debtor’s business.

Establishment of security and level of security regulation is generally:

Medium complexity

Brazil offers well-established security instruments and relatively clear rules for real estate fiduciary security, mortgages, pledges, receivables and equity security. However, there is no single collateral registry; registration costs and timing vary by state and asset class; notarial and sworn-translation formalities can be cumbersome; and enforcement efficiency differs significantly by collateral type. Encumbrances are generally checkable, but searches must be performed asset by asset and registry by registry.

Yes, generally. Brazilian law recognises electronic signatures. Qualified ICP-Brasil signatures have the highest statutory evidentiary value, and private parties may also agree to other electronic signature methods. In practice, however, documents that must be registered or presented to Brazilian public registries, notaries or authorities should be signed with ICP-Brasil certificates or through an accepted official electronic notarial/registry platform. Registrars may reject non-ICP electronic signatures even if they are valid between the parties.

Documents requiring public deeds or notarial acts may, in many cases, be executed electronically through the Brazilian e-notary infrastructure. Acceptance varies by registry, type of title and state. For cross-border security packages, wet-ink signatures with notarisation/apostille and sworn translation, or ICP-Brasil signatures by Brazilian attorneys-in-fact, remain common.

There is no single public register of all guarantees or encumbrances. Many registries are publicly accessible online, including RER certificate platforms, RTD electronic platforms, Boards of Trade, INPI and certain notarial systems, although access, coverage, fees and search functionality vary. Some systems, such as custodian or B3 entries for securities and certain financial assets, are not fully public and require participant or issuer cooperation. Extracts and certificates can often be obtained electronically, but asset-specific checks remain necessary.

Generally, any interested party may apply for registration, including the creditor, security provider, security agent, assignee, attorney-in-fact or notary, subject to the rules of the relevant registry. In practice, the secured creditor or its counsel often coordinates the filing to control timing and priority. For shares and book-entry assets, the issuer, registrar, custodian or depositary may need to make the relevant entries based on the parties’ instructions.

The required documents depend on the type of collateral and registry. Brazilian registries usually require the registrable title itself, evidence of authority and identification of the parties, and may require supporting corporate, tax, real estate, sworn translation, apostille/legalisation and POA documents. Electronic filing is increasingly available but not uniform for all registries and asset classes. Security instruments should include sufficient details of the secured obligations, including debtor, creditor/security agent, principal amount or maximum secured amount, maturity, interest and collateral description.

Timing and costs vary materially by state, registry, collateral type, secured amount and document value. The estimates below are indicative only and should be confirmed locally at the time of closing.

Quick to medium. 

Online real estate, corporate, IP and certain RTD searches may be obtained within a few hours to 5 business days. More complete due diligence, including title-chain, lawsuits, tax, environmental and asset-specific searches, may take 1-3 weeks.

Costs are generally low for simple certificates, often approximately EUR 5-100 per certificate or extract, but a full due diligence package can be materially higher depending on scope and number of assets.

Medium. 

For a typical Brazilian security package over shares and bank account credit rights, annotation in the company’s share registry can often be completed on the execution date if management cooperates; notification to the account bank may take approximately 1-3 business days; and RTD registration commonly takes approximately 7-10 business days after a complete filing. Real estate registrations commonly take approximately 5-15 business days, but requirements, objections and state practices may extend timing.

Costs range from low to high.

RTD and corporate filings may be approximately EUR 50-2,000 per document or filing in ordinary cases, but value-based fees may be higher. For large transactions, RTD fees may be subject to state caps; in São Paulo, the cap is commonly described as approximately EUR 4,200, subject to annual adjustment and confirmation at filing. Real estate notarial and registry fees are value-based under state fee tables and may exceed EUR 5,000 for high-value collateral.

Signature notarisation is usually quick and low cost, often completed on the same day at a nominal per signature fee. A public deed for real estate or other security usually takes several business days once all documents are available. Notarial fees are set by state fee tables and may be fixed, value-based or a combination of both. For high-value real estate transactions, fees can be medium to high and may exceed EUR 5,000 depending on the state and collateral value.

Other perfection costs may include sworn translations, apostilles or legalisations, courier costs, registry searches, custodian or B3 fees, INPI fees, bank account control or escrow account fees, insurance endorsements, title regularisation and legal fees. Sworn translation costs for a limited foreign security package may be modest but can increase materially depending on volume. Taxes may also be relevant, including IOF (Imposto sobre Operações Financeiras) on credit/foreign exchange transactions and, upon enforcement or title consolidation over real estate, possible ITBI (Imposto sobre Transmissão de Bens Imóveis – municipal tax levied on any paid “inter-vivos”, or between living people, transfer of real estate ownership or real estate rights) and other transfer or registration costs. There is no general stamp duty on security documents comparable to some common-law jurisdictions.

Yes, non-payment of a due and payable secured debt is the principal enforcement trigger, subject to any applicable notice, cure period, acceleration requirement and statutory procedure.

Yes, if the breach is an event of default under the principal obligation agreement and results in the secured debt becoming due and payable or otherwise permits enforcement under the security documents. Pure non-payment is the clearest basis for enforcement.

Yes, if the breach is an event of default under the security agreement or applicable law, such as unauthorised disposal, failure to insure, deterioration of collateral, failure to provide information, breach of negative pledge or loss of priority. The security documents should expressly provide that such breach permits acceleration and enforcement.

Yes, usually, but enforcement may be affected by insolvency law. Bankruptcy generally accelerates obligations and brings enforcement within the insolvency framework. Judicial reorganisation may stay individual enforcement against the debtor and certain assets, subject to exceptions for fiduciary creditors and specific limitations on removal of essential capital goods. Guarantees granted by non-debtor third parties may remain enforceable, subject to court orders and case law.

Other grounds may include acceleration, cross-default, illegality, deterioration or loss of collateral, unauthorised sale or encumbrance, commencement of enforcement by another creditor, attachment by third parties, cessation of business, liquidation, merger without consent, or any other event expressly agreed in the finance documents.

There is no universal mandatory cure period for all security. Contractual cure periods apply unless overridden by statute. Specific statutory procedures include, for example, 15 days for purging default in real estate fiduciary alienation and in the extrajudicial mortgage procedure introduced by Law No. 14,711/2023. Movable fiduciary alienation requires evidence of default and may involve protest, notice and search-and-seizure procedures. Share pledge/fiduciary transfer and bank account security enforcement should follow the notice, default certification, valuation and sale or sweep mechanics agreed in the security documents, subject to mandatory rules. Judicial enforcement follows the Civil Procedure Code and may involve debtor summons, attachment and auction stages

Yes, for certain types of security. Out-of-court enforcement is available for real estate fiduciary alienation, fiduciary assignment of receivables and bank account rights, certain movable fiduciary arrangements, financial collateral and, following Law No. 14,711/2023, mortgages through an extrajudicial procedure, subject to statutory requirements.

Traditional pledges and some asset classes may still require judicial enforcement or a court-supervised auction unless a valid contractual sale mechanism and applicable law permit otherwise. For shares, a pledge may be enforced judicially or extrajudicially if the security agreement properly provides for out-of-court sale; fiduciary transfer generally supports out-of-court sale more readily. Additional instruments such as account control agreements, escrow agreements, custodian agreements, POA, transfer forms, notices and registry applications are often required or recommended to make out-of-court enforcement workable.

Available methods vary by collateral and instrument. Brazilian law generally prohibits a creditor from simply appropriating collateral upon default, except through fiduciary-title structures or post-default arrangements permitted by law. Auction and sale procedures are common, and surplus proceeds must generally be returned to the debtor or other entitled parties.

Generally no for ordinary pledge or mortgage, because Brazilian law prohibits pactum commissorium, i.e. contractual appropriation of collateral by the creditor upon default. The collateral agreement may not simply provide that the creditor keeps the shares or other collateral automatically if the debt is not paid.

Yes in a qualified sense for fiduciary alienation or fiduciary assignment, where title or ownership rights have been transferred to the fiduciary creditor on a defeasible basis. Even then, enforcement normally requires sale or application of proceeds in accordance with the law and the contract, with any surplus returned to the security provider. After default, the debtor may separately agree to dation in payment (dacao em pagamento) or a similar settlement.

Yes, sale by public auction is the standard route for real estate fiduciary alienation and the extrajudicial mortgage procedure. Movable fiduciary collateral may be sold after possession and consolidation in accordance with the applicable statute. Shares may be sold judicially or, if properly agreed, extrajudicially by private sale or auction; listed shares or book-entry securities may be sold through the relevant market, custodian or depositary mechanisms. Pledged assets are often sold through judicial auction, although private sale mechanisms may be agreed where legally permissible and practically enforceable.

Value is generally determined by statutory auction rules, contractual valuation provisions, independent appraisals or market price. A sale at an unfair or manifestly inadequate price may be challenged by the debtor or other creditors. Surplus proceeds should be returned to the debtor or applied according to the agreed priority waterfall.

No exact equivalent. Brazilian law does not have a general notarial writ procedure equivalent to some civil-law jurisdictions. However, public deeds, private instruments signed by the debtor and witnesses, credit instruments and certain securities may constitute extrajudicial enforcement titles, allowing the creditor to file a judicial execution action without a full merits phase. Protest before a notary may be used to evidence default and support enforcement procedures.

Other methods include direct collection of fiduciarily assigned receivables, application of cash in controlled or escrow accounts, contractual set-off, enforcement through custodians or B3 for securities and financial assets, search-and-seizure for movable fiduciary collateral, and registry-led foreclosure for real estate fiduciary alienation and mortgages. For ordinary operating bank accounts without a control or escrow agreement, practical enforcement may require judicial relief because the account bank is not contractually bound to follow the secured party’s instructions.

Yes. POA, conditional transfer documents, account control agreements, escrow arrangements, custodian instructions, blank transfer forms, voting proxies and notices are commonly used to facilitate enforcement. They are not a substitute for mandatory registration or statutory foreclosure steps, and Brazilian courts may scrutinise irrevocable POA if used to bypass mandatory debtor protections. For Brazilian companies, the constitutional documents should be checked because POA may be subject to duration limits and may need periodic renewal.

Creditors should be aware of Brazil’s fragmented registry system, state-by-state notary and registry fees, the absence of a single floating charge, the limited recognition of trusts, formal sworn-translation and apostille/legalisation requirements for foreign documents, and potentially lengthy judicial enforcement if the collateral is contested. Security over ordinary operating bank accounts may be valid and perfected but weak in practical terms unless a controlled or escrow account is implemented. Fiduciary transfer of shares may be attractive from an insolvency perspective but involves legal debate in some foreign/non-financial creditor structures.

Insolvency stays, essential asset arguments, environmental and tax liabilities, labour claims, rural land restrictions, corporate approvals, public registry objections and bank set-off rights can materially affect timing and recovery. Practical access to movable collateral can also be difficult if the debtor resists.

The answer depends heavily on the collateral and the enforcement structure. Enforcement of cash, receivables and bank account rights is generally more creditor-friendly and can be quick if a true control or escrow mechanism is in place; without bank cooperation, it may become contested and slower. Fiduciary collateral is generally more creditor-friendly than traditional pledge collateral, although insolvency courts may still impose temporary limitations where assets are considered essential to the debtor’s business.

Real estate fiduciary alienation and the new extrajudicial mortgage procedure are creditor-friendly compared with ordinary litigation, but strict statutory steps must be followed. Traditional pledges, disputed collateral, shares requiring valuation/sale, and judicial enforcement are more balanced or debtor-friendly and may be lengthy. Overall, enforcement in Brazil is fairly easy for well-structured fiduciary security, receivables and controlled cash collateral, but complicated and potentially long for contested assets, insolvency situations or poorly perfected security.

No major pending legislative change has been identified as of May 2026 that would fundamentally replace the current guarantee and security framework. However, the framework has recently changed significantly through Law No. 14,711/2023 (the Legal Framework for Guarantees) and Law No. 14,382/2022 (electronic public registries/SERP (Sistema Eletrônico de Registros Públicos), and implementation by registries, courts, the Central Bank, the National Monetary Council and notarial authorities continues to develop. Market practice and registry requirements should therefore be checked at the time of each transaction.