Accountancy in Brazil

Brazil is a developing country with great commerce and investments opportunities, and is considered one of the largest economies in the world. It covers more than 8.5 million square km and has a population that reached 207 million  in 2016.

Country overview

Brazil is a constitutional federal presidential republic, adopted in 1889. The Brazilian State is organized into three branches: the Executive, the Legislative and the Judiciary. The Head of the Executive Branch (who accumulates the functions of head of State and head of Government) is the President of the Republic.

Brazil has two official language Portuguese and the LIBRAS “Brazilian Sign Language”. For the business community, English and Spanish are the most used foreign languages.

The Brazilian population is diversified, formed by five large groups: the natives of Brazil, the Portuguese colonists, the Africans, and immigrants from Asia and Middle East in the beginning of the 19th century.

The monetary unit is the Real (R$) which is divided into hundred units called centavos. Trading in other currencies is not permitted.

Economic overview

Brazil is one of the BRICS nations – together with Russia, India, China and South Africa. Over the past few years, it has made progress in its efforts to raise millions out of poverty.

Brazil currently has a strong and solid economy. It is a major producer and exporter of various types of goods, mainly minerals, and agricultural and manufactured commodities. The areas of agriculture, industry and services are well developed and expanding. With a GDP in the range of USD 1.8 trillion (2016) its economy places at ninth largest in the world.

There has been discovered a major offshore oil reserve, which can put the country into the top league of oil-exporting nations. The development of these offshore fields is making it possible to end many years of dependence on foreign producers. Iron is another of Brazil’s natural resources, highly prized by major manufacturing nations, including China.

The World Bank has admired the country for progress in reducing social and economic inequality, despite the extensive gap between rich and poor. However, social conditions are still severe in big cities like Rio de Janeiro and Sao Paulo, where a third of the population lives in favelas, or slums.

Brazil has a fast-growing agricultural industry, producing more than 110 million tons of grain and being one of the biggest exporters of beef and chicken in the world.

The diverse industrial sector accounts for more than 45% of GDP, with high technology in some sectors, enabling it to export to the various parts of the world.

Exports comprise both industrial products (60%) and basic products (29%). Brazil exports globally, with Asia (China), the USA, and the European Union as the main markets, followed by Latin America.

The South-eastern region contributes 58% to total production, with the state of Sao Paulo being accountable for a third of the country’s GDP. Such regional economic concentration has been progressively reduced with increased investments in the Northern and Northeastern regions, and the growth of agribusiness in the CentralWestern regions as stimulated by the expansion of agricultural frontiers within the economy of Brazil.

The Brazilian economy is mixed and broad based, including listed companies, foreignowned companies, semi-state companies, state monopolies, joint ventures, family enterprises and small businesses operating in various formats. There are also financial markets and an active stock market.

The Sao Paulo Stock Exchange (BM&F Bovespa) has become one of the three largest in the world in Market cap. Several Brazilian companies have raised billions of dollars in recent IPOs, and have been included among the world’s top fundraising operations.

The financial institutions in Brazil are considered the most sophisticated in the world while the largest Brazilian banks are included among the most solid globally.

The postal system is compared with the postal systems in Europe and private courier services are widely available both locally and internationally. Telecommunications are controlled by private sector but supervised by the National Telecommunications Regulatory agency (ANATEL).

Long Term strategies and investments (including pre-salt oil exploration opportunities) are now top of the Government Agenda. Brazil is now a potential economic powerhouse.

Transport infrastructure

Despite the high cost and shortcomings of roads, road transportation has been leading the transport matrix in Brazil and, over the years, has played an important role in contributing to the nation’s economic and social development. In 2014 there were 1.7 million kilometres of roads, of which only approximately 12% were paved.

There has been significant investment in the modernization of the railroad network with the Brazilian National Privatization Program. However, road transport still dominates for both long distance and intercity traffic.

The air transport infrastructure is well developed and most airline companies are in private hands. Public transportation still represents significant problems in major centres. Limited subway systems are now functioning in Sao Paulo and Rio de Janeiro, but many companies provide bus services for their employees.


Latest version updated 20th December 2017

Country Breakdown

207.7

Million

Population

R$

Brazilian Real

Currency

$ 1.8

Trillion

GDP

8.5

Million

km2