What is a Merchant of Record, and how does it let you sell in Brazil without a local entity?
A Merchant of Record (MoR) is the company that is legally the seller on a transaction: it sells to your customer under its own name, issues the invoice, and takes on collecting and remitting the taxes for that sale. When you use a Merchant of Record to sell in Brazil, you reach Brazilian customers with local billing, a compliant Nota Fiscal and payment in reais, and the local tax and invoicing obligations sit with the MoR instead of forcing you to open a Brazilian entity.
In one line: the MoR becomes the seller of record in Brazil so you can earn revenue there in weeks, keeping your price and margin, without incorporating.
Why this matters before you write your first Brazilian invoice
Selling into Brazil directly usually means one of two slow, expensive paths: set up a local entity (months of incorporation, then ongoing accounting, payroll and tax filings whether or not sales ramp), or sell cross-border and quietly absorb tax exposure, withholding and a buyer who cannot recover the tax embedded in your deal. Both cost you time, cash and competitiveness before you close anything. A Merchant of Record removes that blockage: you start selling compliantly, and the burden of local tax calculation, collection, invoicing and remittance moves to a single accountable partner.
What the Merchant of Record carries, and what stays with you
Handled by the Merchant of Record | Kept by you |
Being the legal seller of record on the Brazilian transaction | Ownership of the customer relationship |
Local billing and the compliant Nota Fiscal | Your product, your brand and your roadmap |
Tax calculation, collection and remittance in Brazil | Your list price and your full margin |
Payment collection in reais and payout to you | Commercial terms and pricing decisions |
You do not hand off your customer or your pricing power. The MoR operates only the local billing, tax and invoicing layer underneath your sale.
Why Brazil specifically makes this urgent now
Brazil is running the largest indirect-tax overhaul in a generation. Constitutional Amendment 132/2023, regulated by Complementary Law 214/2025, introduces two new taxes on consumption, CBS (federal) and IBS (state and municipal), that apply to imported digital services such as SaaS, cloud and AI. The transition runs from a 2026 pilot, with PIS and COFINS phased out from 2027, to full effect by 2033. Crucially, your Brazilian buyer can only recover the tax credit on the purchase when the transaction is documented through a compliant local seller. Sell direct from abroad and that credit is often lost, which raises your customer's real cost of buying from you. Sell through a Merchant of Record and the purchase generates the input credits your buyer can claim.
Who this is for
If you run a SaaS, cloud, AI or digital-services company selling into Brazil or planning to, and you are a founder, CFO, revenue leader or general counsel weighing how to enter without a subsidiary, a Merchant of Record is the fastest compliant route to revenue. It is most valuable when speed to market, a clean compliance position and a competitive landed cost for your Brazilian buyer all matter at once.
FAQ
What is a Merchant of Record in simple terms?
It is the business that legally sells to your customer on your behalf, issues the invoice, and handles tax collection and remittance for that sale, so you do not carry the local billing and tax obligations yourself.
Can I sell in Brazil without opening a local entity?
Yes. With WTM as your Merchant of Record you sell under local billing, issue a compliant Nota Fiscal and get paid in reais without incorporating, so you reach revenue in weeks instead of quarters.
Does using a Merchant of Record mean I lose control of pricing or my customer?
No. You keep the commercial relationship, set your own prices and protect your full margin. The MoR runs only the local billing, tax and Nota Fiscal layer.
How does a Merchant of Record affect Brazil's tax reform (CBS and IBS)?
A compliant local sale lets your Brazilian buyer recover the CBS and IBS credits that direct cross-border sales usually do not generate, protecting your competitiveness as the reform phases in through 2033.
Informational content based on current legislation (EC 132/2023, LC 214/2025). Not tax advice. Talk to WTM about selling into Brazil without a local entity.
