Background To Business in Brazil


Over the past few years, Brazil has moved from a country with great promise 'some time in the future' to being seen as one of the hottest investment opportunities in the world.  A more stable political system and currency, coupled withe vast mineral wealth of the country make Brazil a 'must' for all companies with truly global ambitions.

With a population of 194 million, Brazil represents the fifth largest market opportunity in the world — after China, India, Indonesia and the USA. It is also the fifth largest country in the world by geographic size. An IMF (International Monetary Fund) report indicates that Brazil leads all other South American countries in terms of infrastructure and technological development. Combine these facts with the stabilising economic and political landscape — (the twin nightmares of corruption and hyper-inflation ravaged the country for decades) — and it is easy to see why Brazil attracts a higher percentageof total global foreign direct investment year on year.

However, anybody wishing to do business with Brazil and the Brazilians should be aware of the various cultural and structural barriers which might confront them. Probably the most pervasive barrier encountered by the unwary traveller would be the 'Custo Basil' or the 'Brazil Cost'. This term refers to the very real extra costs of doing business in Brazil — corruption, governmental inefficiency, legal and bureaucratic complications, excessive taxation, poor infrastructure, inflation etc. Although this 'costa' is difficult to define and has lessened in recent years, it remains real and the cause of great frustration for international business people.

Due to this 'Custo Brasil', it is important to work closely with local lawyers and accountants. Many people have found the services of local middlemen (despachante) extremely useful in overcoming many of the unfathomable local complexities.

So, as with many countries, the opportunites are there and they are real but it essential to understand the local business landscape if you are to reap the rewards - rgardless of whether your sector is banking and finance, computing or pharmaceuticals, local knowledge is vital.