With quick, direct access to trade in Brazilian Real, Moneycorp makes doing business in Brazil easier than ever before.
With the world’s tenth largest economy and a rapidly expanding labour force, Brazil presents boundless opportunities to those seeking to do business.
The UK has long enjoyed strong trade ties with Brazil, and these ties endure to this day. In the four quarters that led to the end of Q2 2022 (June 30, 2022), UK exported £3.5bn in goods and services to Brazil. This makes Brazil the UK's 30th biggest export market, accounting for 0.5% of total UK exports, and it represents an increase of £550m (18.4%) compared to the four quarters leading to the end of Q2 2021. The most significant goods exports between July 2021-June 2022 included mechanical power generators (£357.8m, or 15.9% of all UK goods exported to Brazil) and medicinal and pharmaceutical products (£191.2m, or 8.5% of all UK goods).
Brazil offers a solid business base and a modernised banking sector; many of the world’s largest investment banks have set up shop in the country. The largest economy in South America by some distance, Brazil is home to Santos, the largest port on the continent, and it serves as a gateway for business in neighbouring countries.
The country continues to make valuable contributions to the world. A land of opportunity, it has a promising future that offers potential for growth to local and foreign businesses.
The Brazilian economy continues to make strides following a pandemic-induced contraction of 3.9% in 2020: GDP grew by 4.6% recorded 2021, and it is projected to grow by 2.8% in 2022. There will surely be challenges ahead, but Brazil has shown impressive resilience, thanks in large part to a diversified economy that includes services, fintech, heavy and light industry and agriculture.
Indeed, with its extensive natural resources, burgeoning middle class and its huge domestic market (Brazil has a population of 214m, the sixth largest in the world), it has much to offer both local and foreign businesses looking to scale their operations and international investors.
When sending funds to Brazil, there are several financial institutions that are involved with the transaction. But with Moneycorp Banco de Cambio's direct access to Brazilian real (BRL), on the other hand, you can easily exchange currency and make smooth, seamless same-day payments.
Guide to business in Brazil for foreigners
Is Brazil a good country to do business in?
Brazil is a fantastic place to do business. It is home to the biggest consumer market in Latin America, thanks to its fast-growing middle class and large population, and it has much to offer by way of its abundant agricultural, mineral and energy reserves.
Brazil’s strategic geographic location gives it easy access to ten Latin American countries, and its membership of the Southern Common Market (MERCOSUR) bloc provides companies that have been incorporated in Brazil direct market access to other member states (Argentina, Paraguay and Uruguay).
What are the major industries in Brazil?
Many of the largest global automotive companies are present in Brazil, from BMW and General Motors to Mitsubishi and Volkswagen. In addition to automobile production, Brazil has been a major producer of textiles and clothing since the 1800s, and it is the only Latin American country listed among the top 15 global markets for fashion accessories.
Brazil is a giant in the mining and agricultural sectors, and its chemical industry is the world’s eighth largest, making up 10% of the country’s industrial GDP; Brazil’s abundance of oil, gas and rare earth minerals makes it the ideal destination for chemical conglomerates. Cement production, in addition to oil and petroleum processing, are also among the largest traditional industries in the country. Finally, Brazil produces 40% of the world’s coffee supply!
What are the emerging industries in Brazil?
Brazil’s healthcare and life sciences sectors are two of the most important emerging industries. Investment in these industries has almost doubled since the mid-2000s, with health spending expected to rise to 12.6% of GDP by 2040, up from 9.6% in 2019. The country’s healthcare market is now the largest in Latin America. Public investment in science and technology received a huge boost at the beginning of 2022 when the Ministry of Science, Technology and Innovation announced that It would have 6.9 billion reais ($1.27 billion) to spend in discretionary investments, a 110% increase from 2021.
Among the prominent markets within the healthcare industry are medical devices, biomaterials used to manufacture devices and prostheses, digital health such as wearables and health apps, organic and other health food, pharmaceutical retail, and electronic medical records.
The country’s emerging industries offer more reasons for prospective businessmen to consider doing business in Brazil.
How much does it cost to start a business in Brazil?
The costs involved in starting a business in Brazil have given rise to the “Brazil Cost” expression. Whilst it is not prohibitively expensive to start a business in Brazil, you should note that these costs include payments of more than R$2,000 for submitting paperwork and obtaining the relevant approvals from various government agencies. You would also be well advised to consider the expenses involved in paying tax and meeting the cost of property registrations and construction permits (if applicable) and tax.
If you register a subsidiary or local branch of your company, it will be liable for corporate taxes. There are more than 60 different taxes and levies on goods and services, and those taxes and levies vary between municipalities, states, and federal districts.
What are the challenges of doing business in Brazil?
Whilst Brazil is a vibrant marketplace with much to offer, it comes with its challenges, much like any other jurisdiction.
These include navigating the language barrier and negotiating Brazil’s complex legal and regulatory structures. Brazil’s taxes are fairly high, and its domestic tax code is complex, with tax disputes and municipal taxes that are levied on a cumulative, or cascading basis.
These factors result in increased operational costs for businesses relative to more developed economies.
What are the biggest opportunities for doing business in Brazil?
Following a series of business reforms that were passed in 2017-2018, Brazil has made real progress in recent years towards developing a friendlier business environment, which will make it easier for companies to export their goods and services to the country and invest in the country's economy.
One of the key advantages of doing business in Brazil is the country’s diversified industrial base, which offers huge opportunities for foreign businesses in agriculture, education, marine and maritime and oil and gas. Brazil’s booming science and technology sector is another exciting area of growth, with huge potential for research and development in areas such as biotechnology, agribusiness and energy.
What is the corporate tax rate in Brazil?
Corporate income tax is levied on the taxable profits of an entity at a rate of 15%. The combined nominal rate is 34%, however, once the 10% surtax imposed on annual income in excess of BRL 240,000 and the CSLL (Social Contribution on Net Profits) of 9% is levied on adjusted net income.
The CSLL for financial institutions is 20% (21% between April 28, 2022 - December 31, 2022), and it is 15% (16% between April 28, 2022 - December 31, 2022) for insurance companies and foreign exchange brokers.
What is the business etiquette in Brazil?
Presentation is very important in Brazil’s business culture: men are often expected to dress conservatively in dark suits, and women are best-advised to wear suits or dresses.
Handshakes are the most common greeting in Brazil amongst men, and it is customary to shake the hands of everyone present whilst maintaining steady eye contact. It is not uncommon for women to greet one another with light kisses on both cheeks; whilst this might seem like an invasion of personal space, it is a common practice in Brazil.
Initial meetings tend to follow a formal smile, but it is normal for meetings to begin with small talk, and the meetings that follow are often more relaxed in nature.