DOING BUSINESS IN BRAZIL.

Doing business in Brazil is extremely exciting and full of opportunities. It’s a young country coming off a period of demographic bonus that the country did not make the best of so still underdeveloped in a lot of segments and desperate for investment. Most people in the professional segment are open to meetings and new ideas. You will always get offered a cup of coffee and a smile. Perhaps even a invitation for the weekend to discuss business. Generally Brazilians are very optimistic and open so people relations are easy. On the flip side of the coin structuring the business properly can be difficult and the ease of doing the actual business expensive.

But doing Business in Brazil has some important considerations:

• Business agreements must be properly structured to avoid early losses
• Company options and tax regimes are complex and affect viability of the project
• As much as everybody is friendly and will spend a lot of time talking local negotiations will involve the following rational:
• Can we do it our selves?
• How much risk will there be for our existing business?
• Can we learn this and then do it ourselves?
• Financials presented are often not real reflections of the business. These need to be properly audited.
• There are several great case studies to be looked at of doing business in Brazil by companies like KFC, Ford, Thyssen Krupp and Diesel.
• Solutions to the market need to be ´´tropicalized´´.
• Investment analysis needs to dig deep for ´´passivos´´ which are labour. environmental, tax or civil processes outstanding as these are often not clear or in the open.

The ease of doing business in Brazil needs to be considered analyzing the following:

• Its best to develop the market first
• Price points and volume predictions are relatively ease to establish
• Understanding the best tax regime
• A digital first then structural approach is best
• MPV works in Brazil
• Labour is relatively cheap but total cost is high and legal processes are common

If you are interested in doing business in Brazil AA Risk can help you go to the market and analyze your opportunities.