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In times of instability, Brazil is a safe haven for foreign investors

Brazil has offered the stability needed in times of uncertainty: good foreign relations, abundant natural resources, and fertile ground for good business

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Coronavirus pandemic, climate crisis, and now the conflict between Russia and Ukraine. The world is dealing with several serious and urgent problems at the same time. If, on the one hand, there is the fear of the unknown, on the other, there is the search for security. Making investments in times of instability, be it political or economic, is a challenge, but also a good opportunity for those who know how to correctly use it.

In particular, the war in Eastern Europe has directly impacted investors’ decision-making. The economic sanctions on Russia, the migration movement, and the rise in oil prices are just some of the many aspects one needs to consider before placing a bet on the international market.

In this context, Brazil appears under a positive aspect. In February this year, Direct Investment in the Country (IDP) totaled US$11.8 billion, according to the Central Bank (BC), an increase of 34% in relation to the same period last year. The amount is the result of the return of Brazilian investments abroad, the resources from equity participation, and the direct loans granted to branches of multinational companies in the country.

In the foreign investment ranking, Brazil has already regained the position it occupied before the pandemic. According to the Kearney Foreign Direct Investment Confidence Index, the country left the 24th position to 22nd, and its score rose from 1.64 to 1.71. The positive result in 2022 is directly related to the rise in the price of raw materials and the relaxation of measures to contain Covid-19.

According to an analysis carried out by XP Investimentos, Brazil is on the list of 25 countries that most attract foreign investors, alongside China, the United Arab Emirates, and Qatar. As the research does not consider the situation in Eastern Europe, analysts believe that the country can easily advance three positions in the ranking because it presents a positive context for investment in the face of the conflict.

Since the beginning of the war between Russia and Ukraine, foreign investors have been looking for safer investment opportunities. Brazil has offered the stability needed in times of uncertainty: good foreign relations, abundant natural resources, and fertile ground for good business.

Despite the positive scenario for investments, it is necessary to know the ins and outs of Brazil’s complex fiscal and tax system in order to operate in the country. For companies that want to establish their business in Brazil, depending on their size and area of operation, it is necessary to comply with specific regulations and seek the necessary registrations with the respective bodies for their correct operation.

Pryor Global has 26 years of experience in representing foreign companies in Brazil. Our team is composed of experienced specialists in the Brazilian regulatory environment, working within the best legal practices.

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