BDRs — foreign companies listed on B3

A BDR (Brazilian Depositary Receipt) is a certificate traded on B3, the Brazilian exchange, that represents shares of a company listed abroad. You buy and sell it in reais, through your ordinary Brazilian brokerage account — no money ever leaves the country. It is the simplest door into foreign equities for most Brazilians.

How a BDR works

A custodian institution holds the underlying foreign shares abroad and issues the depositary receipts here. Each BDR corresponds to a set ratio of the foreign share (it might be one BDR per share, or several BDRs per share). The local price tracks the foreign price translated by the exchange rate, so a BDR carries both the company's performance and currency movement.

Sponsored vs unsponsored

• Sponsored — the foreign company itself participates in the program and supports the listing. These come in levels:
  • Level I — typically traded over-the-counter or with lighter disclosure.
  • Level II — listed on the exchange with fuller disclosure.
  • Level III — associated with a public distribution / capital raising in Brazil, the most demanding in terms of registration.
• Unsponsored — created by a depositary institution without the foreign company's direct involvement. Much of the broad BDR universe a retail investor sees on B3 falls into programs set up this way.

Things to know before buying

• BDRs may pass through dividends from the underlying company, net of foreign withholding and fees.
• Eligibility and the rules for who can trade which BDRs have changed over time as the regulator broadened retail access — verify the current CVM rules before assuming a given BDR is available to you.
• Liquidity varies enormously: a few BDRs trade heavily, many barely trade at all, which widens spreads.

BDRs are the lowest-friction option, but they are not the only one — the next lessons cover buying truly abroad.