Law No. 7,102 of 20th June, 1983 (Law No. 7,102/83), which regulates private security services in Brazil, established, in article 11, that the rendering of private security services are prohibited to foreigners.

However, on 14th December 2016, a decision issued by the 1st Section of the STJ, the court established that Brazilian companies having foreign capital are not banned from conducting their activities in the domestic market.

In Justice Herman Benjamin’s opinion, article 11 of Law No. 7,102/83 only prohibits companies incorporated abroad to do business in private security in Brazil. Companies incorporated under Brazilian laws, with registered offices in Brazil, are considered to be Brazilian companies, it being irrelevant if their capital is held or controlled by foreigners.

In practice, almost all companies investing in Brazil establish their respective Brazilian subsidiaries in compliance with Law 7,102/83. Therefore, we have a green light for the inflow of foreign capital for the operation of private security services.