As the largest economy in Latin America and the ninth-largest economy worldwide, many foreign investors looking into the region are considering doing business in Brazil.
Brazil has experienced some economic hardship in recent years, though the country is pulling itself together to attract greater numbers of foreign investment. The country experienced a reduction in demand for Brazil’s commodity-based exports.
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Brazil is nevertheless positive about the future. The government intends to reduce its intervention in local markets, eliminate corruption, open the country to foreign participation and reduce unnecessary layers of bureaucracy. Additionally, President Jair Messias Bolsonaro has expressed his desire to improve commercial relationships with their northern neighbour, and global superpower, the US.
For these reasons, among others, international business is now looking firmly at Brazil as an appealing investment destination.
Key benefits of doing business in Brazil
1. Large consumer market
2. International trade access to the rest of the Americas
3. Desirable geographic conditions
4. Brazil Business Culture: Openness to foreign investment
5. Great infrastructure for doing business
There are 175 maritime and river ports in the country, 32 of which are public. There is therefore an extensive network of land and maritime logistics support for businesses moving goods across the country and internationally.
Brazil is optimally set up as a key trading hub for South America.
Market opportunities for doing business in Brazil
Brazil’s diverse market presents investors with a raft of appealing commercial opportunities. While the Brazilian business environment has its complexities, partnering with a local group will ensure that you are able to successfully navigate these complexities and experience success in the market.
As mentioned, Brazil has traditionally been a global leader in agriculture, and this is still true today. Commercial opportunities are available to companies who have access to new technologies, equipment, and services, and who can assist to modernize and make the agricultural sector more efficient. This type of investment is true for other national sectors, including the energy sector, mobile application development, and financial technology, all of which are growing at an astounding rate.
Mining in Brazil
The Brazilian mining sector is often overlooked for those sectors in other high-performing economies such as Chile and Peru. However, it has a lot to offer foreign investors. Its relative size, and certain bureaucratic formalities that create a somewhat ‘natural barrier to entry’ for competitors, generates potential for commercial success that may be easier to achieve in other more saturated markets.
Mining experts in regions such as Canada, the US, and Australia should look to bring their METS (mining equipment, technology, and services) companies to Brazil to fill a market need for technological sophistication in one of the world’s largest producers of certain metals. With the new government seemingly ‘pro-mining’, barriers to entry will likely be managed or diminished over time, making the market more accessible for foreign mining companies.
Key steps to incorporate a business in Brazil
Once you have identified a market opportunity, you may wish to formally incorporate a business in Brazil. With the right specialist support, the process to incorporate a business in Brazil is relatively straightforward. The basic steps to setup a business include:
- Obtain tax ID numbers for shareholders
- Draft the company bylaws and register the business
- Open a company bank account
- Register the company share capital with the Central Bank of Brazil
Additionally, all companies in Brazil must meet some minimum corporate compliance requirements in order to remain compliant with the local authorities. These compliance requirements include:
- Appointment of a Local Director
- Appointment of Legal Representatives for the company shareholders
- Registration of a fiscal address within Brazil
- Preparation and presentation of monthly tax declarations with the national tax authority.
To successfully incorporate a business in Brazil, you will need to engage with a local legal expert that can successfully guide you through this process and connect with all relevant government authorities. This will ensure you can do business in Brazil with minimal delay, and in full compliance with local law.
Biz Latin Hub supports foreign investors doing business in Brazil
Brazil is fast becoming one of the most desired Latin America economies for doing business. With the new government set to shake up the business environment and create more favourable conditions for foreign business, all eyes are firmly planted in Brazil.
To expand your business to Brazil, you’ll need a corporate law specialist on your team to ensure you can incorporate, register with tax authorities and begin operations in full compliane with Brazilian law.
Get in touch with Biz Latin Hub for specialist support. Our team has ample experience in assisting companies of all sizes to develop their operations through providing a range of customizable market entry and back-office services. Contact a member of our team today here at Biz Latin Hub for support.
Latin America offers a great environment for foreign mining companies looking to expand their operations. Check out the video below for more information on doing business in Brazil.
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