Invest in Brazil has always been a option for foreign investors.
Many foreign companies invest in Brazil and look at market opportunities with a medium-term vision. The data of recent years clearly show that foreign companies believe in Brazil. Despite the severe economic crisis that hit the country in 2015-2016, the number of outside companies that decided to open a subsidiary or invest in Brazil has increased. Foreign direct investments (IED) confirmed and announced that since 2003, coming from China, USA, France, Italy and Japan, totaled approximately US $ 260 billion, with the greatest historical value occurring in the accumulated 2019, up to the 3rd quarter.
On the qualitative level, the foreign companies have figured out how to invest money in Brazil and have now taken a leading role in the market in strategic sectors for the Brazilian. According to IED The US direct investments in Brazil since 2003 concentrated in the industrial sector, although it also stands out in the financial services sector, telecommunications, and electricity.
Why invest in Brazil? Here are the five good reasons you can’t ignore!
- He is a leader in The Mercosur (South American Market). Brazil is a global power, ranked among the top 10 economies in the world and is the largest in Latin America.
- It is a global destination for investment. It is a country open to foreign direct investment and continues to attract international and innovative companies, thanks to profitable opportunities supported by regulations of protection to corporate ownership.
- It is a market of over 200 million inhabitants. Brazil has now become the eighth largest economy in the world, offering countless opportunities for businesses, many of which are still unexplored. It is the largest domestic consumer market in the world, with strong domestic demand for services, goods and agricultural products.
- It has a diversified economy that is not based on a limited number of sectors, but rather on a wide range of economic sectors. The industrial sector is very competitive throughout Latin America that boasts among the largest aerospace, automotive, oil, petrochemical, mining, chemical and capital goods industries, medical equipment, and finally technology.
- It recently concluded negotiations for an EU-Mercosur free trade agreement that opens up further favourable prospects and an increase in bilateral trade and investment flows.
Now that you know why to invest in Brazil discover bellow all the steps to reduce risk and maximize results in a complex market like Brazil. Learn how to invest in Brazil through a structured approach and enter this market at its best.
A market assessment allows you to have a holistic view of the niche, helping to understand the quantitative and qualitative aspects that allow for better decision-making. Therefore, before entering the market of your interest, predict demand, analyze the value chain, risks and costs, check the availability of resources, check barriers to entry and competition.
Market choice and access method
Based on the market assessment, you have to perform the internal analysis to see if your company uses methods such as SWOT analysis, to look for the best access method, which can be either through acquisition, joint venture, merger, or more.
Preparation for entry into the Brazilian market and subsequent implementation
If your investment preferences are about acquisitions, identify your target profile, prioritizing goals through the long list, shortlist, and classification. After this phase, it is necessary to carry out preliminary due diligence, a detailed evaluation, contract negotiation and a tax structure.
For Greenfield, the first step is to develop the business plan, select the location and product, build a financial model, an operational plan, an incentive of the tax structure and, finally, the preparation of a roadmap to follow. You must implement the business plan first, then planning and operational design, procurement, acquisition or construction of the real estate, staffing, planning and launching control, and finally the creation of the site.
If you have decided Invest in Brazil, remember to have the support of a qualified partner who can help you on how to invest money in Brazil and make your investments successful.
Have you ever wondered “how to invest in Brazil?”. GM Venture offers full support to companies that want to invest in Brazilian territory.
Complex and ever-changing laws create numerous challenges for foreign investors who want to do business in Brazil. That’s why a local expert like GM Venture can help you efficiently manage your tax and accounting consulting activities. You need to have a reliable partner to mitigate the risks that may appear at any stage of the company’s establishment process.
Since 2006 GM Venture, a consulting and management company operates in Brazil with a business model that facilitates the local operations of subsidiaries of foreign companies based on Brazilian soil.
The right assistance not to miss business opportunities in Brazil
Never before have foreign companies, especially small and medium enterprise (SME), so been attracted to the Brazilian market and its opportunities. Political uncertainty does not seem to affect the growth pressures that the South American country’s economy is experiencing. Thanks to the innovative business model, GM Venture takes care of the financial, administrative and accounting management of subsidiaries in Brazil, offering a one-stop-shop for foreign parent companies and thus facilitating total control of local operations.
What kind of market does Brazil offer for accounting and tax advice?
Brazil is a particular market and different from the global one, it is, therefore, essential to know all the useful information on how to invest in Brazil.
Accounting and tax consulting activities can be managed internally if the company is large. On the contrary, all small and medium-sized companies will have to rely on an external BPO (business processing outsourcing) as a consultancy company. It is essential to remember that in Brazil the role of the chartered accountant works differently. However, there are contadores in the Brazilian market, similar to the chartered accountant, but to a large extent, few experts in international issues. To explain the complexity of the accounting processes in Brazil, just think that within the so-called Big Four, two of these KPMG and PWC decided not to deal with tax and accounting consulting activities as they do in the rest of the world. According to the last world bank report, Brazil is ranked the worst country since it has the largest tax-accounting work hours.
What is GM Venture’s business model?
GM Venture was created in 2006 to help foreign companies interested in Brazil. Instead, the first projects made us realize that our role was crucial to ensure proper management to companies that want to do business in Brazil.
So, the business model has quickly turned into what is now our usual job, namely the outsourced CFO: we manage all the foreign companies’ activities that they do not consider “core business”. Besides, we are taking up the position of a legal representative who in Brazil necessarily must be employed by a resident. In a sense, we keep and process all the cash flows and report them with easy-to-read tools to the foreign entrepreneur who invests in Brazil.
Is the topic of accounting advice managed by GM Venture?
We work with three BPO companies that we have selected over time. They have different DNA and different sizes. We have particularly intensified over the years however the work with the company called Premium, the result of a spin-off by manager Jose Brito, who for years was responsible for PWC. In May 2018 we decided to acquire a significant share to integrate even more our activities with theirs. A good collaboration was born and at the same time a good synergy. The theme of accounting remains a crucial point for companies investing in Brazil.
How many people work in Sao Paulo?
The team consists of about thirty people and each maintains its offices even we do weekly staff meetings. GM Venture’s business model is expected to have substantial staff within the client companies.
What growth perspective does GM Venture offer for foreign companies in Brazil?
Italy offers the “product”, Brazil offers the market. Many companies when entering the Latin American market must first understand how to invest in Brazil. The important thing is to document yourself first and not along the way.
As for business opportunities in Brazil, the country offers many sectors that are interesting to invest and, for example:
- Pharmaceuticals or, agribusiness, and home automation;
- Traditional companies such as cosmetics, which is worth 40 billion dollars, or real estate;
- The appliance industry, where Brazil alone accounts for 50% of all of South America;
- The renewable energy sector, where the market is growing in two lines.
Even on digital marketing, you can do good business, since Brazil is in third place, after the USA and China, as the number of users on the social networks Facebook, Instagram and YouTube.