It’s a common thing in many countries. It’s, among other things, a liability issue.
If your “country #1” company does business in “country #2” then what laws apply to them?
In order to distinguish clear lines what “country #2” requires is a representative for the company to be in the country. If the company breaks “country #2”'s laws then the representative is liable for it.
Generally to be a representative you have to have a measurable stake in the transaction, you can’t just be a random Jimbo, so it usually falls to a law firm (or an entity that works with one), mainly because if you need people to help your company follow the law, then they should know the law.
If the company breaks the law, the firm has to deal with that, so it’s a risk for them.
In this case, X needed that representative, either they couldn’t or wouldn’t find one, therefore Brazil said “we can’t hold you accountable to our laws, so get out of our country.”
I’m super, MEGA, oversimplifying, and I’m no expert, but this is my best understanding.
Thanks, that definitely made it very simple to understand.
Still not 100% convinced on the applicability under various conditions[1], but I understand it from the Government POV. Kinda similar to the country-country hostage exchange we see in stories, which makes sure the other would have a reason not to renege on some agreement, even if they don’t have a reason for mutual trust.
and if I want to be, perhaps I should stop being lazy and go read the law ↩︎
