Foreign Direct Investment in Brazil

Overview by

FDI in Figures

Brazil is world’s number one destination of FDI flows in Latin America. After breaking its FDI record in 2008, the influx slowed down in 2009 due to the global economic crisis but it has resumed growth since. Brazil has become the 4th international investor among emerging countires and the 1st in Latin America. This country's appeal to international investors is due to different factors:
- A market of almost 200 million inhabitants;
- A booming economy;
- Easy access to raw materials; and
- A diversified economy, therefore one less vulnerable to global crises.


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.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 34,585 45,058 25,949
FDI Stock (million USD) 309,668 287,697 400,808
Performance Index*, Ranking on 141 Economies 101 90 87
Potential Index**, Ranking on 141 Economies 71 67 -
Number of Greenfield Investments*** 154 250 271
FDI Inwards (in % of GFCF****) 14.5 14.7 41.5
FDI Stock (in % of GDP) 22.7 17.6 25.5

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Brazil

Strong Points
Brazil has Universities that perform just as well as their counterparts in the OECD and a very big manpower reserve educated to all levels.  It also has extensive raw material resources. A number of sectors offer good business opportunities. The Brazilian economy is diversified and more and more manufactured goods are produced and exported. The potential of the Brazilian domestic market as well as the low cost of labor are elements which may attract foreign investors.
Weak Points
Despite being open to world trade, several administrative barriers cripple international trade. Valuing the real against the dollar automatically reduces the country's competitiveness against Asian competitors in some sectors. The Labor laws are very onerous, involving substantial costs to foreign companies and keeping a good part of the local business in the informal sector.
Government Measures to Motivate or Restrict FDI
The Brazilian government encourages and promotes FDI. Most of the barriers to foreign investor activity have been removed particularly on the stock market. A very large number of public companies have been privatized and many sectors deregulated over the last fifteen years.
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.

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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.
Find Investment Service Providers in Brazil on

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Investment Opportunities

Investment Aid Agency
Agency for the promotion of investment in Brazil
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Brazil
Comprasnet, Tenders
DgMarket, Tenders Worldwide
Other Useful Resources
Central Bank of Brazil

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