Opening a company abroad is a project that cannot be improvised. In countries with certain particularities, such as Brazil, with a complex fiscal scenario and intricate political situation, understanding the aspects that end up impacting the success of a business is useful. If it is true that the country offers opportunities to those who know how to use them, it is equally true that it rewards those who overcome the challenges of opening their company here.
The scenario is optimistic: data from the Central Bank (BC) show that foreign investment in Brazil is the highest in 10 years. In total, US$ 90.6 billion were invested in the country in 2022, against US$ 46.4 billion in 2021, surpassing the expectations of the BC itself, which forecasted something around US$ 80 billion.
Beyond this optimistic scenario, what are the main aspects to be considered by a foreign investor before opening a company in Brazil?
1. Compliance with legislation
To set up in Brazil, a company must comply with the laws and regulations of the government and applicable regulatory bodies. Depending on the industry and the jurisdiction in which it operates, regulations vary widely. It is worth noting that multinational companies, which have a global presence, need to comply with the laws and regulations of the respective countries where they operate.
2. Tax scenario
It is difficult for foreigners who want to establish a business in Brazil to understand the tax system. There are so many taxes that a company must pay that Brazil was ranked 2nd in a ranking of the countries with the highest taxes. In addition to being numerous, taxes are levied in different spheres, which makes the scenario even more complex. However, without being up to date with tax payments and declarations, a company can suffer severe penalties.
3. Political and economic scenario
Political and economic decisions are crucial for the establishment of foreign companies in Brazil. Bilateral and multilateral agreements with other countries, trade negotiations of all kinds, and economic policies can influence the attraction of investment in the country. In addition, it is necessary to follow the government’s movements on a daily basis.
4. Market research
The success of a business in another country depends, to a great extent, on the market. In a territory of continental dimensions, such as Brazil, the demand for products and services has not been totally supplied. It is necessary to identify the target audience and understand their needs. When preparing a business plan, it is also necessary to analyze the activity of potential competitors. This will make it possible to establish your brand in the market and reinforce sales.
5. Infrastructure and work force
From a practical point of view, you need to set up the company somewhere. To do this, use the information previously gathered to choose locations that are commercially interesting for your business. In addition, it will be necessary to obtain the appropriate licenses for the type of activity that the company performs, in accordance with the regulations in force in the country.
Some tools and software store the data encrypted, so that the data is only accessible by using the software itself and a password.
It is also important that the company adopts a disk encryption solution on its devices, especially portable ones, as a way to prevent improper access to the data in case the devices are lost or stolen.
4) Have a plan in case of a data breach
No company would like to go through this, but it is recommended to have a security incident procedure so that you know exactly what to do in case of a data breach. This procedure must also include templates for immediate notification of your customers, suppliers, and authorities.
In addition to these tips, it is essential to comply with the guidelines of the GDPR, which was created to establish a strict framework for the treatment of personal data and sensitive personal data throughout the national territory.
Here at Pryor Global, our DPO outsourcing sector has a highly specialized team in digital security, which helps companies to be in compliance with GDPR.
Contact us and learn more about our services.
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