Investment Opportunities in Brazil
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By Brazil
Brazil has signed bilateral agreements for the protection of foreign investment with 14 countries, but 7 of them have not been ratified by the Congress.
To see the list of countries, click here.
To see the conventions, click here.
- International Controversies Registered By UNCTAD
- There has not been any major controversy over the last few years.
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International Chamber of Commerce in Rio
- Member of the Multilateral Investment Guarantee Agency
Country Comparison For the Protection of Investors
|Brazil||Latin America & Caribbean||United States||Germany|
|Index of Transaction Transparency*||6.0||4.1||7.0||5.0|
|Index of Manager’s Responsibility**||7.0||5.3||9.0||5.0|
|Index of Shareholders’ Power***||3.0||6.0||9.0||5.0|
|Index of Investor Protection****||5.3||5.1||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
- The investment regime in Brazil is a liberal regime which allows foreign investors to have a majority share in the creation of their company.
- Obligation to Declare
- The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up. All inflows of capital must be declared to the Central Bank.
- Competent Organization For the Declaration
Central Bank of Brazil
- Requests For Specific Authorizations
- Foreign investment is restricted and requires special authorization in the nuclear, health, land ownership, fishing, post office, telegraphs, aviation, aeronautics and media sectors.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
- There are plenty of offices to rent.
- The Possibility of Buying Land and Industrial and Commercial Buildings
- There are no restrictions on foreigners buying land and commercial buildings, except at the borders of the country.
- Risk of Expropriation
- Risks of expropriation are very low today. Compensation is provided for in case of expropriation, especially for foreigners.
- Forms of Aid
- The government encourages foreign investment in the form of tax exemption, aid, etc.
- Privileged Domains
- Companies which export more than 80% of their production in IT and communication are exempted from certain taxes (COFINS and PIS) on their exports. This regime has been extended to all exporting companies, but for three years only. There are, in addition, many public aids for SMEs that export.
- Privileged Geographical Zones
- Tax reductions are granted to companies who set up in economically disadvantaged regions such as the North, Nordeste and the Amazonian regions (Manaus in particular).
- Free Zones
- There are 8 free zones in Brazil but only that of Manaus, Zona Franca de Manaus, has managed to attract foreign investment and seen real economic development.
- Organizations Which Finance
The National Investment Bank (BNDES)
The Instituto de Desenvolvimento de Minas Gerais (INDI).
- The Key Sectors of the National Economy
Agriculture (sugar cane, coffee, oranges, soya, bananas, walnuts, cashew nuts, corn, pineapple and pepper), beef, poultry, tobacco leaves; mineral ores, iron and aluminum.
The country is asserting itself more and more in the textile, aeronautics, pharmacy, automobile, iron and steel industry and chemical industry sectors.
- High Potential Sectors
- Raw materials, agriculture, agri-food industry, IT (hardware and software), energy, petroleum, gas, franchises, insurance, iron, steel, medical equipment, pharmaceutical products, mining sector, pollution control equipment, ports and airports, aeronautical industry, railways, telecommunications infrastructures and tourism.
- Privatization Programs
- Tenders, Projects and Public Procurement
Tenders Info, Tenders in Brazil
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- Electricity and energy in general, but the trend is towards the opening up of natural monopolies to the private sector, subject to the supervision of a public regulation organization.
- Sectors in Decline
- The sectors most affected by Asian competition, especially textiles.
Finding Assistance For Further Information
- Investment Aid Agency
Agency for the promotion of investment in Brazil
- Other Useful Resources
Central Bank of Brazil
- Doing Business Guides
The Lexmundi guide « Doing Business » on Brazil
The Deloitte "International Tax and Business Guide" on Brazil
Brazil Commercial Guide 2010 - Buy USA
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