A recent decision by Brazil’s Superior Court of Justice – the Superior Tribunal de Justiça (STJ), the country’s highest court for non-constitutional matters – highlights an issue that goes well beyond procedural law: the importance of clearly defining representation powers when structuring a foreign company’s presence in Brazil.

The case involved an attempt to serve Hyundai Corporation, a Korean company, through a Brazilian company operating under the Hyundai brand. The lower courts upheld the service based on the perceived connection between the entities. The STJ disagreed.

According to the Superior Court, the use of a shared brand, the existence of a distribution arrangement, or even membership in the same corporate group does not, in itself, establish authority to represent a foreign company in legal proceedings. In the absence of evidence of such authority, service of process must be effected through the appropriate channels of international judicial cooperation – typically by letter rogatory (carta rogatória). The Court therefore declared null and void the procedural acts carried out after the defective service.

Importantly, the decision does not mean that a foreign company may never be served through a Brazilian entity. Brazilian law expressly contemplates situations in which foreign companies operate in Brazil through branches, agencies, or duly appointed representatives. What the STJ rejected was the assumption that representation powers can be inferred solely from commercial or corporate ties.

For foreign investors and multinational groups, the decision is a useful reminder that corporate structure and legal representation are not the same thing.

Many international businesses operate in Brazil through distributors, commercial partners, subsidiaries, or other affiliated entities. While these arrangements may support the commercial operation, they do not automatically determine who is authorized to act on behalf of the foreign company, receive service of process, or represent it before Brazilian authorities and courts.

From a practical perspective, defining representation powers clearly from the outset is not merely a corporate formality – it is an element of legal certainty and risk management. If left unaddressed, this issue may lead to procedural invalidity, litigation delays, and uncertainty in regulatory interactions. If properly addressed, it strengthens predictability and governance across cross-border operations.

When advising foreign clients entering or expanding their presence in Brazil, these issues deserve attention from the structuring phase – long before any dispute arises.