Find out below the pros and challenges if you open a business in Brazil as a foreigner. For information about the incorporation process, i.e., what you have to do to register a business in this country, you can read our dedicated article here.
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Advantages for foreign investors in Brazil
Brazil is an important recipient of foreign direct investment (as detailed below) and the country offers ample opportunities for those who decide to start a business in Brazil as a foreigner. We briefly list some of these below:
- A large domestic market with a population of more than 212 million people;
- Available raw materials for manufacturing;
- A convenient location that allows access to other South American countries and to Central and North America;
- Government promotion of key business sectors such as renewable energy, oil and gas, life sciences, automobiles, and others;
- Several investment incentives: research and development activities can qualify for tax relief and direct assistance. Subsidized financing is available and the exporters can access tax refunds, depending on the types of goods they export.
Challenges to take into account for foreign investors in Brazil
According to the World Bank’s Ease of Doing Business Index 2020, Brazil scored well in several categories for setting up a business. One notable example is that the country does not impose a minimum paid-in capital for creating a company.
Starting a business in São Paulo will involve around 11 procedures, according to the Ease of Doing Business Index.
Another consideration is in the case of foreign companies interested in expanding in the country. They can open a branch in Brazil, however, special approval for this purpose will have to be obtained.
In addition to the general registration requirements, business owners will also have to see that their company functions with valid licenses, such as the one for doing business in the financial sector.
Obtaining special permits and licenses, while it may seem like a hurdle in the process of setting up a business, can be fully assisted with the help of our local team in Brazil.
Foreign direct investment inflow in Brazil
According to the World Investment Report 2024, published by the United Nations, Brazil is one of the top countries in the world receiving foreign direct investment:
- In 2022 and 2023, the country was the 5th largest FDI recipient, surpassed by France, Hong Kong, Singapore, China, and the United States;
- Brazil’s FDI inflow in 2022 was of 73 billion dollars;
- In 2023, the country’s foreign direct investment inflow was of 66 billion dollars.
Some of the most notable investing countries in Brazil are the United States, the Netherlands, Spain, France, the UK and Japan.
Among the most sought-after investment sectors we can mention financial services, commerce, or the extraction of oil and natural gas.
Special considerations for doing business in Brazil as a foreigner
Foreign investors who are ready to open a business in Brazil should know that all the documents they will have to prepare for this purpose have to be drawn up in Portuguese. English is not as widely spoken in Brazil as in other countries, however, it is used in the business sector.
Brazil offers an investor’s visa, however this is issued for making qualifying real estate investments. Those who want to start a business in Brazil as a foreigner will have to apply for a visa and residence permit that will allow them to remain in the country for the duration of the business-related procedures.
Contact us if you want to know more about how to open a business in Brazil as a foreigner. Our team can answer your questions.