A Publication of WTVP

Brazil is known as a top destination for international investment. In fact, in 2001, Goldman Sachs branded Brazil, along with Russia, India and China, as a “BRIC country.”

The news propelled Brazil into the spotlight as one of the key emerging economies that will drive growth over the next century. Since then, Brazil has been a premier investment opportunity in Latin America and the region’s leader in foreign direct investment.

Over the last 20 years, the level of foreign investment in Brazil has made a clear statement to the business world about its attractiveness to multinational companies. With a population of 193 million, Brazil is the largest country in South America and the fifth largest worldwide. It is the world’s leading exporter of beef, chicken, orange juice, sugar and ethanol, and second in the world in soybeans and maize. It will host the Olympics in 2012 and the World Cup in 2014. The IPO of the state-owned oil giant Petrobras raised $70 billion, the world’s largest on record. Clearly, Brazil is a profitable harbor for international capital.

Although Brazil is well known as a great place to invest, it is also known as a complicated place to do business. Businesses considering operations in Brazil should consider a wide range of cultural issues and business practices, including:

Compliance, compliance, compliance. Dozens of ancillary obligations and strict regulations affecting almost all areas of business activity make Brazil a complex business environment. All statutory databases, transactions, documents, forms, etc. must be written in Portuguese and denominated in the local currency. The company’s managers and the accountants responsible for producing financial and tax information are required to use unique electronic signatures to file all tax returns on the tax authorities’ website. These are only a few examples of local compliance obligations, and none of these functions can be performed from outside the country.

Brazil is a challenging business environment that requires a posture of respect and understanding for the local culture and procedures. On the other hand, it is a booming market that can serve as a platform for the entire South American region. Our key recommendation is: plan ahead, plan during incorporation, plan during start-up and plan while the business is running. Of course, it is not easy, but with proper preparation and the recognition that local expertise is a must, success is just around the corner. iBi