Brazil was the sixth largest destination for foreign investments in 2021
The economic crisis motivated by the pandemic, added to the political instability that is daily shown in the news, has lowered the expectations for foreign investment in Brazil. In a scenario of uncertainties, as the last two years were, it is normal – and even expected – that there is more caution from international investors, but the country has managed to overcome the discouraging perspectives.
Driven by the commodities boom, Brazil was the sixth largest destination for foreign investments in 2021, recovering its pre-pandemic position. Data published by the UN Conference on Trade and Development show that Brazil received $50 billion in inflows last year, against $28 billion a year earlier. The expectation is that the high price of commodities will stimulate multinationals to increase investments in the country by 2022. In May, the country had already contracted R$ 188 billion.
But what are the advantages of setting up a foreign company in Brazil? We will discuss some important points below:
– A significant consumer market
Brazil is the largest economy in Latin America and has one of the largest consumer markets in the world, with 215 million inhabitants. Therefore, the country offers many opportunities for those who know how to take advantage of them. Today, consumers have more access to information than ever before, and seek reliable data about brands to help them make purchasing decisions. They also demand specific products and services, so those who want to operate in the country can do so in a variety of ways.
– Natural resources / Geographical conditions
The Brazilian natural landscape is very varied, formed not only by the Amazon Forest, the largest in the world, but also by the other biomes, quite different from each other. It is not by chance that Brazil is one of the world’s largest exporters of commodities, very prominent in agribusiness. Companies that operate in this sector will find fertile ground to develop in the country, if they are interested.
– Easy access to Mercosul
Among the international agreements of which Brazil is part, Mercosul (Southern Common Market) stands out. It provides benefits such as free circulation of goods and services and integrated legislation, in order to make life easier for companies operating in member countries. Foreign companies that start operating in Brazil can benefit from these same advantages and have the chance to expand their business even further.
– Open to innovation
There are many reasons why Brazil has not yet emerged significantly in global trade, and one of them is the barrier to innovation. Investment in Science, Technology, and Innovation (ST&I) is low in the country today, limited to 1.2% of GDP. Most of our exports are commodities, therefore, they have lower added value. The private initiative has joined efforts to reverse this scenario. According to a survey by the National Confederation of Industries (CNI), 90% of innovation in Brazil is done with private investment.
To make sure you meet all the mandatory requirements for opening a company in Brazil, you must have the appropriate support. Pryor Global values the trust of its clients, applying internal compliance controls so that the administrator or legal representative always signs documents in accordance with what is established in the contractual relationship and in the articles of association/corporate act or power of attorney of the company.
One of the advantages of appointing an administrator or legal representative is to have documents signed quickly and securely, allowing the company to focus on other important matters, such as growth strategy and negotiations. We have already talked about this here.
For over 26 years, Pryor Global has been assisting foreign companies that want to operate in Brazil. We work in compliance with the complex Brazilian legislation and within the best legal practices. Count on the support of an experienced company that understands your business. Send a message right now.