here is an interesting article from Ricardo Geromel looking at some of the challenges in investing in Brazil. We have been aggressively doing business in Brazil for the past 3 years. However, Brazil is unlike other fast moving, developing countries. Brazil is steeped in tradition and culture and this new growth spurt will be challenging to the country’s infrastructure and traditional bureaucracy.
Ricardo writes, THIS” in the post title refers to SEBRAE. Where Sebrae is the mecca for reliable information about entrepreneurship in Brazil; from working visas for foreigners to schedules of entrepreneurs gatherings, Sebrae has all the official answers foreigner investors need. … But to say it’s slow would be a minor understatement.
Sebrae is The Brazilian Service of Support for Micro and Small Enterprises and serve as a hub for people interested in entrepreneurship in Brazil. It was founded in 1972 and counts on a network of 4.433 employees and 9.223 external consultants.
Brazil’s economy has been booming in the past few years. Quoting a Forbes writer, “Brazil has been adding 19 ‘millionaires’ per day since 2007 — and that statistic will likely be repeated over the next three years as Latin America’s economic super-power continues to deliver stellar GDP growth and consumption rates, according to bankers.” Brazil’s huge consumer market tempts many entrepreneurs, willing to open a company in “the country of the future.”
However, starting a new business in Brazil is anything but easy. Brazil ranks 127 out of 183 countries in the ranking Ease of Doing Business Index by the World Bank.
In Brazil, it takes up to 120 days to start a business and around 4 years to close it down mainly due to high levels of bureaucracy. By contrast, in the US, it takes only 6 days. Yes, you read it correctly, it takes 20 times longer in Brazil !
While in China it costs about 155$ to open a company and in Colombia 670$, in Brazil it costs 1125$ !
To read more please go to http://www.forbes.com/sites/ricardogeromel/2011/12/12/you-must-know-this-before-investing-in-brazil/
Regardless of understanding the rules of doing business in Brazil, which is the challenge in and of itself, there are a lot of cultural and/or hitting cost that you have to be aware of as well. No question, do we believe that the Brazil market is an incredible opportunity for everyone. However, you have to have long-term objectives and a great team on the ground.
