How to Do Business in Brazil
November 30, 2017
The Giant of Latin America
Brazil is the largest and most populous country in South America, with the eighth biggest economy in the world. It’s a member of the G20, one of the four “BRIC” countries deemed to be a dominant economy by 2050, and recently hosted the 2016 Summer Olympics.
Roman Catholic and Protestant are the top two beliefs in Brazil (64.6% and 22.2% respectively), symbolically represented by the colossal Christ the Redeemer statue erected in the city of Rio de Janeiro, and this should be kept in mind during business conversations to avoid insulting Brazilian clients.
Brazil is the only Portuguese-speaking country in the Western Hemisphere, compared to its neighboring Spanish-speaking countries, and most Brazilians speak little to no English.
The country’s bountiful natural resources, including brazilwood, minerals and agriculture, make it a premium international supply partner for many global businesses. In fact, Brazil’s name is shortened from Terra do Brasil, which translates to “land of brazilwood.”
Ecommerce in Brazil has grown by over 20% over the last three years, and with approximately $14 billion USD promised in infrastructure including road, air, ports, airports and municipal water treatment, the time for small and medium-sized businesses to export to Brazil is now.
Developing strong personal relationships is key to successful negotiations in Brazil. As a result, engaging small-talk, cultural appreciation and stylish dressing are vital to sealing any business negotiations in Brazil.
Southeastern Brazil (composed of states Espírito Santo, Minas Gerais, Rio de Janeiro and São Paulo) is the nation’s wealthiest region, raking in approximately 60% of Brazil’s total GDP. This region also leads Brazil in population, industries, vehicles, hospitals and more. When researching Brazilian suppliers, it’s recommended to make this region your first stop.
Sao Paulo, Brazil is one of the top 10 largest metropolitan areas in the world with a population of approximately 21,519,000 in 2017 and is known as the “Brazilian locomotive” that drives Brazil’s economy. The pre-19th century capital of Brazil, Rio de Janeiro must be included as a major business hub too. It successfully attracts global oil, fishing, farming and industrial industries among others. Besides these two megacities, there are some other less-known locations in Brazil that provide prime investment and hidden trade opportunities.
Campinas, in the state of Sao Paulo, has the third largest international airport in the state. With Campinas’ air transportation and infrastructure, the city has seen enormous growth in foreign businesses including IT businesses, universities and research centers. Most notably is Campinas’ development of the Brazilian Pró-Álcool Program, an industry focused on using ethanol as a combustible for motor vehicles. Brazil is internationally recognized as a global leader in using bioethanol as an alternative to fossil fuels and Campinas seems like the top spot for investment opportunities in the bio-energy sector. In the state of Santa Catarina, Joinville boasts one of the highest standards of living in Brazil and hosts many of Brazil’s largest software companies such as Microvix and SoftExpert, and foreign corporations like Whirlpool, BMW and Wetzel.
The Brazilian real (plural reais) is the official currency of Brazil and is governed by the Central Bank of Brazil. As of 2016, it is the 19th most globally-traded currency by value. Brazil tends to have a rather weak currency which is something small businesses can take advantage of. Brazil could be an ideal supplier for US businesses that wish to purchase goods at a lower price than what they can find domestically and with Veem’s simple platform, these transactions are cost-effective and hassle-free.
Portuguese is Brazil’s official language, unlike many of the country’s Spanish-speaking neighbors. If you want to do business in Brazil, you’ll want to hire an interpreter or translator because many Brazilians don’t speak English, especially outside of Brazil’s major cities.
|New Year's Day||January 1||Nationwide|
|Carnaval||The three days prior Ash Wednesday||Nationwide|
|Ash Wednesday||Wednesday before Good Friday.||Nationwide|
|Good Friday||Friday before Easter Sunday||Nationwide|
|Tiradentes Day||April 21||Nationwide|
|Labor Day||May 1||Nationwide|
|Independence Day||September 7||Nationwide|
|Lady of Aparecida Day||October 12||Nationwide|
|Civil Servants Day||October 28||Government and banks only|
|All Souls' Day||All Souls' Day||Nationwide|
|Republic Day||November 15||Nationwide|
|Black Awareness Day||November 11||Not Observed Nationwide|
|Christmas Day||December 25||Nationwide|
Traveling to Brazil
It’s recommended that a visitor who wants to travel to Brazil should first research whether or not their country needs a visa in order to visit there, and which type of visa they will require based on their needs.
A Brazilian tourist visa is meant for those who wish to visit for tourism or sightseeing, and has a maximum duration of 90 days (180 days if you go to the Policia Federal and ask for an extension). To obtain a tourist visa, you must have:
- A valid passport
- A completed Brazilian visa application form online or in person
- Proof of travel itinerary including hotel reservations and flight bookings
- Proof of your flight ticket and financial stability (formal bank statement indicating finances for the last six months and you must have at least $100 USD per day in for staying in Brazil)
A Brazilian business visa is issued for those who are traveling to Brazil for negotiations or business meetings, and has the same maximum duration of 90 days (with potential extension) as the tourist visa. To obtain a business visa, you must have:
- A valid passport
- A 3.5 x 4.5cm sized photo for self-identification ( must be recent with a white background)
- A completed Brazilian visa application form online or in person
- A formal letter from either the Brazilian business representative or from your domestic employer, stating the purpose of the trip and how long the individual plans to stay in Brazil.
Both visas cost $160 USD and there is a departure fee of $40 USD as well when you leave Brazil. It’s important to apply for either visa a month in advance to give sufficient time for processing.
Brazil doesn’t typically issue visas at border crossings, but the Iguazu Falls tri-border (Argentina, Brazil and Paraguay) area is an exception. Obtaining a visa here requires submitting an online application and bringing documentation and photo identification to the Brazilian Consulate in Puerto Iguazu.
If you wish to stay longer in Brazil, you can get married, have kids or purchase an investor visa for $150,000 BRL or $45,449.05 USD.
As with all nations, individuals visiting Brazil must hold a passport that doesn’t expire for at least six months after arrival.
Finding accessible wifi in Brazil is harder than it sounds. Rio de Janeiro and Sao Paulo are the only states with a Starbucks, and many restaurants don’t have stable internet. As an international exporter to Brazil, your best bet may be to either work from your hotel in Brazil, make friends with a local business and use their wifi, or get access to the wifi at a nearby Brazilian school or research center.
At 23 hours and 12 minutes a week, Brazilians ranks 1st in spending the most time on the internet at home. The Brazilian government approved a law in June 2005 which provided incentives to improve the competitiveness in the computer market, causing a surge in computer sales.
Brazil is leading the world in spending time on the internet at home, but there is still plenty of work to be done in meeting the standards of countries like the United States. This leaves ample business opportunity for tech-savvy international exporters to help get Brazil up to speed through supplying them with the necessary technology.
Brazil has become the world’s fourth largest cell phone market and Latin America’s top mobile internet market with users of all ages; a sign of their fast-growing economic development. This growth, despite a 2016 economic stutter, demonstrates the emergence of Brazil’s economy and provides opportunity for international suppliers to export goods to Brazil.
The area code in Brazil is +55, meaning each phone number in Brazil must have “55” before it. For reference, the United States and Canada have the area code +1.
If you are in Brazil and need to set up your phone, SIM cards are sold at newspaper kiosks (ask a local where the nearest banca de jornais is). It’s important to get the appropriate-sized SIM card for your phone as some are not compatible. Registering a SIM card in Brazil requires your passport number.
Major Trade Shows and Events
Considering how personal relationships are valued in Brazil’s business culture, major trade shows are a way for you to meet potential Brazilian suppliers, but can also be the ideal location to network with industries and organizations to secure a strong presence in Brazil.
Here is a list of the major trade shows and events coming to Brazil:
|Congresso Abes||Sao Paulo||Every Two Years||Environmental Sanitation.|
|Aerospace Meetings Brazil||Sao Jose dos Campos||Every Two Years||Aerospace industry meetings.|
|Gift Fair Brazil||Sao Paulo||Yearly||Giftware and housewares shows.|
|Rio Content Market||Rio de Janeiro||Yearly||Multi-platform audiovisual content.|
|World Travel Market Latin America||Sao Paulo||Yearly||Presenting destinations and industry sectors to Latin American.|
|Fespa Brasil||Sao Paulo||Yearly||Wide-format print industry.|
Brazil is a diverse nation and its business culture is the same. With Sao Paulo being Brazil’s most internationally-recognized business city, the culture tends to be more Western than other Brazilian cities. An important rule of thumb: the further north you go in Brazil, the more conservative the business culture tends to be.
Brazilian business culture is much more informal and intimate than the United States, with a greater emphasis on the personal relationship made between buyer and seller. Physical contact and close proximity are both common traits of conversing in Brazil, and shouldn’t be taken as being impolite or brash.
Physical appearance and status is especially important in Brazil. Staying at a first-class hotel, wearing an expensive watch and driving a luxurious car all go a long way in impressing Brazilian clients.
Brazilians prefer face-to-face meetings with potential trade partners as opposed to video conferences and emails, as a strong personal relationship is essential to successful business in Brazil.
Learning about Brazilian culture is highly suggested as a potential conversation topic, as Brazilians tend to be very patriotic.
In addition, agreeing on areas where Brazil beats the United States, such as in food or sports, helps in building your client relationship.
An engaging conversation with Brazilian business partners can have more of an impact on a deal than what is formally presented to them. Food, art, sports and family are great topics of discussion, while politics and religion should be strictly avoided.
Here is a list of things you should and shouldn’t do if you want to successfully negotiate in Brazil:
- Give a gift when you first meet with a potential client from Brazil, however ensure it is of little material value so it isn’t mistaken for a bribe.
- Greet your Brazilian business clients. Men commonly shake hands during first meetings while women tend to air kiss once on each cheek, like they do in most European business cultures. These greetings differ based on location: for example, in the state of Rio de Janeiro and Bahia, women greet one another with two air kisses starting on the right cheek, while in every other Brazilian state, it’s only one air kiss on the right cheek.
- Exchange business cards during meetings. It’s also a good idea to have some of your cards translated to Brazilian Portuguese.
- Share personal information with prospective Brazilian business partners. Opening up to them can drastically improve your relationship and lead to a positive outcome in future business negotiations.
- Don’t rush business negotiations, especially during lunch, which is considered an integral part of Brazilian culture.
- Don’t reject a cup of coffee in Brazil; it’s akin to denying the Brazilian culture and comparative to rejecting a game of golf in the US.
- Don’t be late to meetings in Brazil, however don’t be surprised if your Brazilian counterparts don’t show up on time. Brazilians are known to be habitually late, but this shouldn’t be taken as rude.
- Don’t use the “OK” sign, as it is similar to giving the middle finger in Brazil.
- Don’t shy away from physical contact with Brazilian business contacts, as it is as much a part of Brazilian culture as coffee and brazilwood. A tap on the shoulder or even a hug is commonplace and can be even used to build on your personal relationship.
Patience is key when negotiating in Brazil. Any sign of rushing conversation to “get down to business” is seen as being rude.
The typical Brazilian business meeting will be noisy and crowded with plenty of interruptions and animated dialogue, as most businesses in Brazil invite as many people as possible to share insights. Frequent interruptions are commonplace in Brazilian culture, however, and should be taken as a passionate response to the discussion at hand, and not as impolite or unprofessional.
Regulations, Permits and Tariffs
Importing goods to Brazil requires foreign exporters to register with the Brazilian government’s computerized system SISCOMEX, otherwise the goods are abandoned. All goods exported to Brazil, regardless of whether or not they have import taxes, are inspected by customs upon entry. The designated importer must provide the names and addresses of the importer and exporter, as well as a description, price and origin of the goods.
Brazilian Business Advisories
There are potential dangers involved with doing business in Brazil, known by the locals as Custo Brasil or the Brazil Cost. Street violence is a common occurrence in Brazil, as it’s still a developing nation. It’s important that international visitors do not advertise wealth and that they consult local advice on where it’s safe to venture. There are ways that an international exporter can avoid these issues and reap profits in South America’s largest nation.
Brazil’s bureaucracy is notorious for being very corrupt and very slow. Operation Car Wash was launched in 2014, investigating allegations that some of Brazil’s biggest construction firms overcharged Petrobras, Brazil’s state-oil company, for building contracts. The Workers’ Party was also accused of paying off politicians and buying votes for their political campaign. Among those charged was Luiz Inacio Lula da Silva – Brazil’s former president. The two predecessors of da Silva – Michel Temer and Dilma Rousseff respectively – have been accused of corruption since then, with the latter being impeached in 2016. Both Brazilian presidents deny all allegations of fraud. Even when the bureaucracy is legitimate, starting a business in Brazil could take 13 procedures and 119 business days while construction permits can take up to 17 procedures and 469 business days to be authorized.
There is currently an anti-corruption law in Brazil called the “Clean Companies Act” however it isn’t consistently enforced. According to the Act, giving gifts is illegal during business transactions and negotiations, which further emphasizes the importance of presenting an inexpensive gift that can’t be mistaken for a bribe during first meetings.
With corruption playing such an active role in Brazilian business culture, bypassing Brazilian banks when transferring payments to your suppliers in Brazil. With the ability to track payment progress and an innovative user-focused platform for global wire transfers, you can safely send global wire transfers to your Brazilian partners. In addition to using Veem, those who wish to do international business in Brazil should ensure that they have strict and visible anti-corruption policies in place. This will promote societal goodwill among the Brazilian locals, vital to Brazil’s business culture, and will avoid unneeded negative attention.
Export and import barriers can make international transactions tedious at times. One example of this can be seen with Brazilian exports, which can potentially take up to 13 days to leave Brazil.
Imports in Brazil are usually handled with letters of credit or collections through established banks with international agreements. If not, US exporters may choose to deal with an open account, or on a cash-in-advance basis if there is a strong relationship with a Brazilian buyer. Generally, Brazilian buyers want an open account or cash up front, so it’s recommended that US exporters have export-import bank insurance or a guarantee to ensure payment.
The main difficulty with international global payments with Brazil lies in the country’s bureaucracy. This has been such an ongoing issue that Brazil actually had a Ministry of Debureaucratization from 1979 to 1986 in an effort to fix this problem. The Government of Brazil is the nation’s largest buyer of goods and services, and navigating Brazil’s government procurement procedure for international businesses is no easy feat. Brazil is not a member of the World Trade Organization’s Government Procurement Agreement, and prefers to give government contracts to domestic businesses. A way to combat this lies in the heart of Brazilian culture: building strong relationships with Brazilian individuals and having a significant in-country presence.
The Key to Successful Business in Brazil
Personal relationship, personal relationship, personal relationship. It’s important to present a product that is worth Brazilian investment, however, the bond you make is just as significant. Like a fine wine, good things take time; treat your prospective Brazilian suppliers as friends and family and they will respond favorably in business negotiations.
Brazil hosts ample opportunity for trade with its recent surge in internet and mobile phone users, as well as the promised investment in infrastructure and technology. It’s crucial that international exporters are well aware of the Brazilian political and social environment, including the corruption and bureaucracy that could ensue. Steps can be taken to mitigate any damage to your business, including using Veem as a secure method of B2B payment transactions. You should also register your intellectual property rights before entering the Brazilian market so that your patents and technology remain protected. And of course, you need to ensure you’re building connections with Brazilian locals to ease procedural processes and expand your market audience.
Here is a list of resources that can provide more information on doing business in Brazil:
The World Factbook on Brazil
Brazilian Culture, Customs, Business Practices and Etiquette
US Department of Commerce’s Comprehensive Guide to Brazil
Brazil Global Statistics via the World Bank
The Brazil Business Blog
Doing Business in Brazil via Export.gov