Financial & Professional Services

An Expert's View about Banking, Finance and Insurance in Brazil

Posted on: 18 Feb 2012

Brazil is currently a relatively open market for financial services, with still a few exception areas such as legal services.

Financial & Professional Services in Brazil Brazil has vast natural resources, a rising middle class, an increasing consumption pattern backed by Governmental policies and a developed industrial base. Further to that, Brazil is a stable democracy with a booming economy. Market overview As the largest single economy in the region, the state of the Brazilian economy and the value of its currency have great influence on other economies in the region. The Stock Exchange in São Paulo (Bovespa) is by far and away the most important in Latin America. If British financial services companies can succeed in Brazil, it will have far reaching consequences for their success in the rest of the region. Brazil is currently a relatively open market for financial services, with still a few exception areas such as legal services. As an emerging market, fluctuations in the fortunes of the economy frequently occur. The principal factor affecting conditions in the near future are the challenges to continue to promote sustainable growth in a period of continued global economic slowdown and unstable market conditions. Key opportunities Insurance & Reinsurance The steady rise of the middle class along with increased incomes levels has led to more demand for different lines of insurance products including home, automotive, life and causality. Places formerly seen as marginalised, like the outskirts in Rio and/or the poor communities in Sao Paulo, are now being regarded as a very fertile ground for business. Also the opening of the reinsurance market and gradual dissolution of the state monopoly has created a space for experienced multinational companies to fill the current void. Public Private Partnerships (PPP) In Latin America alone, it is estimated that in the next 5 years US$70 billion will be needed in infrastructure development. More than two thirds is expected to be channelled to Brazilian backed regional projects like the Transoceanic Road linking Brazil and Peru. The role of PPPs in Brazil has greatly increased in importance given the need to detach financial mechanisms from the development bank BNDES as a means not to impact the country’s fiscal sustainability. The upcoming 2014 World Cup and 2016 Olympic Games will present PPP business opportunities. Carbon Market The developing carbon market in Brazil is providing opportunities for British expertise to cash in on the growing demand, as joint-ventures, and consulting partnerships can be of mutual benefit to both parties. The newly established (December 2011) BVRio has been created to enable trading of environmental commodities through an exchange . Venture Capital/Private Equity Venture capital/private equity has shown tremendous opportunity for direct investment from abroad. As the number of business opportunities arises in Brazil, so has the need for funding. As a f undamental instrument in the development of emerging markets, PE/VC has been of huge importance to the Brazilian economy. Legal Service Sector The legal services sector in Brazil is considerably more protectionist when compared to the UK’s. The Federal Bar Association in Brazil (OAB Federal) enacted a Resolution in 2000 which restricts the entrance and operations of foreign law firms (British included). However, there are still some profitable opportunities for British business in the Brazilian legal services sector. English law is still reasonably used in Brazil, particularly in relation to international trade and insurance/ reinsurance contracts. Latest export opportunities – Financial & Professional Services Latest export opportunities - Brazil Getting into the market It is important to take a medium to long term view, as success in Brazil requires commitment and patience. Many global players are present in the country and some sort of local presence is preferred. Even so there are niche areas of expertise where there is significant scope for operating remotely from the UK, requiring only periodical visits to the market. The market is moderately liberal and there are opportunities for investment by commercial banks through purchase/joint-venture with existing Brazilian banks. Other service providers may find that local association or partnership, where permitted, is the best way to approach the market, particularly to benefit from the market knowledge and network already established. Some form of local presence is vital to doing business in Brazil, and strongly recommended. More about doing business in Brazil Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Daniel Mangabeira, British Consulate-General São Paulo, Brazil. +55 (11) 3094-2740 or email: ξ Frank Ehrenfried, British Consulate-General São Paulo, Brazil. +55 (11) 3094-1885 or email: Contact your local international trade team Major Events Lord Mayor Visit Brazil Date: 23-30 October, 2012 TBC Location: (Sao Paulo, Rio, Recife) TheCityUK Brazil`s Working Group Date: Every two months Location: London UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events – Financial & Professional Services Latest events – Brazil Useful links More about OMIS and other UKTI services for exporters
Posted: 18 February 2012

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