TSA Pre-Signing Review
Price the Brazilian TSA before you sign.
We scope succession risk and the labour calendar into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
A TSA carve-out in Brazil turns on employer succession under the CLT, a payroll built on FGTS deposits and INSS social security, and personal data duties under the LGPD. The work sits inside the broader carve-out advisory plan, and in Brazil inherited labour liabilities and the 13th salary set the cost base more than the technology does. A buyer that ignores succession inherits claims it never priced.
Brazilian labour law applies the principle of employer succession. When a business or an establishment changes hands, the acquiring entity steps into the employment relationships and assumes the labour obligations, including those that arose before the transfer. A change of ownership does not break the continuity of the employment contracts or reset accrued rights.
Succession means inherited exposure. Brazil has an active labour court system, and claims for unpaid overtime, misclassification, and other entitlements can surface years after the work was performed. A buyer reviews pending and potential labour claims carefully because the successor can be answerable for them.
Accrued entitlements transfer with the employees. Vacation with the constitutional one third bonus, the 13th salary, and FGTS balances represent real liabilities on the Newco balance sheet that the buyer quantifies during diligence rather than discovering after close.
The practical step is a thorough labour diligence covering headcount, tenure, pending claims, and any history of informal arrangements, so Newco prices the succession risk before it commits to a Day One date.
Brazilian payroll combines income tax withholding with social security contributions to the INSS and monthly deposits to each employee FGTS account, a severance linked fund. Newco registers as an employer, sets up these contributions, and confirms it can run the first payroll without interruption.
The 13th salary is a mandatory extra month of pay split across the year, and vacation carries a constitutional bonus of one third of salary. These statutory amounts mean the fully loaded annual cost of an employee sits well above twelve months of base salary, which the buyer models accurately.
Reporting runs through eSocial, the unified digital system for labour, social security, and tax information. Newco must be able to transmit the required events from the first pay cycle, so the buyer confirms the eSocial setup is part of the cutover plan rather than an afterthought.
Because the registrations, FGTS setup, and eSocial configuration take coordination, many buyers run a short seller payroll TSA to bridge the gap, held to cost-plus or fixed-fee with audit rights and a firm exit date, then cut over at a clean month boundary.
Brazil organises much of its workforce by category through unions, and collective bargaining agreements set conditions that apply to whole classes of employees. These agreements commonly establish wage floors, benefits, and an annual base date for salary adjustment that binds Newco regardless of the individual contract.
For a carve-out, the union position defines part of the cost base. The buyer maps the applicable agreements for each employee category, the timing of the next base date negotiation, and any benefits the agreement mandates, then models the true cost rather than the headline pay.
The annual base date matters for planning because it can trigger a wage adjustment shortly after close. A buyer that misses it can be surprised by an increase it did not budget, so the labour calendar belongs in the diligence model.
Getting the union and entitlement picture right protects Newco from inheriting obligations and a negotiation calendar it never modelled into the transaction.
Brazil governs personal data through the LGPD, supervised by the national data protection authority, the ANPD. The law sets out lawful bases for processing, data subject rights, security expectations, and rules on international transfers of personal data. During the TSA the seller processes Newco personal data in shared systems, so a compliant arrangement is essential.
The LGPD requires a clear allocation of controller and processor roles. A carve-out defines the seller processor role during the TSA with security duties and a deletion duty at exit, and confirms a lawful basis supports the continued processing.
Cross-border support is common because shared services often run from outside Brazil. The buyer confirms that any international transfer of personal data meets the LGPD conditions and that accountability for the data is clear in the agreement.
A documented security baseline and a clear record of how Newco data is separated double as the evidence trail the ANPD would expect if a question arises after exit.
The Brazilian TSA scope typically covers payroll, IT and identity, finance, and facilities, each with a clear description, a service-level expectation, and a price held to cost-plus or fixed-fee. The buyer insists on line item pricing because seller cost allocations can bury group overhead that does not belong to Newco.
Cutover is sequenced and gated. Payroll cuts at a month boundary once INSS, FGTS, and eSocial are confirmed, IT after a tested migration, finance at a period close. Each step has a reconciliation gate and a rollback path so a single failure does not spread across the separation.
Cost discipline depends on doing the work before signing. The buyer benchmarks seller charges, removes unjustified mark-up, and sets exit fees that decline across the term. Where the Brazilian business sits inside a regional group, the buyer watches for a TSA that bundles services delivered to other markets.
A disciplined Brazilian separation leaves Newco running its own payroll, FGTS, and eSocial reporting, on its own systems and data estate, with the seller dependency closed on agreed terms. That outcome starts with a pre-signing review that scoped the TSA before leverage shifted to the seller.
Under the CLT, when a business changes hands the acquirer steps into the employment relationships and assumes labour obligations, including those that arose before the transfer. Accrued rights and pending labour claims can follow the business, so the buyer reviews them carefully during diligence.
The 13th salary adds an extra month of pay, vacation carries a constitutional one third bonus, and employers contribute to INSS social security and deposit monthly to each employee FGTS account. The fully loaded annual cost sits well above twelve months of base salary.
eSocial is the unified digital system for labour, social security, and tax reporting. Newco must transmit required events from the first pay cycle, so the buyer makes the eSocial setup part of the cutover plan rather than an afterthought.
The LGPD requires a lawful basis, a clear controller and processor split, and conditions on international transfers. The buyer defines the seller processor role during the TSA with security duties and a deletion duty at exit, and confirms cross-border transfers meet the law.
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We scope succession risk and the labour calendar into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
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