WELCOME toFundaçãoGetulioVargasProfa. Isabela Baleeiro CuradoOffice of International Programs Directoroip@fgv.brOFFICE OF INTERNATIONAL PROGRAMSSince 2001, offers short term programs to partner schools andcompanies about Doing Business in Brazil.o One or two day lectureso Doing Business in Brazil (1 our 2 weeks)o Custom made programs (in Brazil or abroad)V0.1 – April 26, 20102019Brazil is the largest and most populous country in South America, as well as the 5th largest country in the worldStable political environment▪ One of the biggest democracies in the world (100 million voters)▪ Civil law jurisdiction▪ Fragmented national multiparty system with 35 parties in Congress▪ Newly elected President BolsonaroDiverse▪ 26 states + Federal Distric▪ 5 Regions▪ 7 Biomas▪ ImigrationBRAZILGeneral facts▪ ~210 M people across 26 states and one Federal District▪ 51% Women, 49% Men▪ Capital is Brasilia; other large cities include São Paulo and Rio de Janeiro▪ Predominantly Catholic (65%) and Protestant (22%), with the latter gaining ground in recent years due to New PentecostalsCultural aspects▪ Personal relations are extremely important▪ Risk-averse culture, conflict avoidance▪ High level of bureaucracy and ‘red tape’▪ Material class differences and income inequality (Bolsa Familia)▪ Culture is different region by region (South, SE, North, NE, and Center West)Economic growth is tepid, plagued by a challenging environment both at home and abroad. but there are many investment opportunities. The biggest challenge is to face institutional issuesBrazil Cost - Complex regulation, high labor costs, & shortage of skilled professionals▪ Labor costs are higher than other Latin American countries▪ Bureaucracy and complexity to establish local business▪ Different regulations at Federal, State and Municipal levels▪ Specific and complex financial, taxes, labor policies▪ Only 3.4% of Brazil's 200 million residents speak fluent English▪ High unemployment rate at 13% Fierce competition▪ MNCs are already well-established in the country▪ Regional and local players with strong brand awareness and client relationshipsBRAZILRobust economy▪ World’s 9th largest economy (US$ 2.1 trillion GDP)▪ 40 million people added to the middle class in the past 10 years; half of the population is currently in middle class▪ Major oil & gas reserves▪ One of the largest iron deposits In the world▪ One of world's biggest producers of soybeans, coffee, oranges, and sugar cane5 Regions26 states + Federal DistrictBrazilian Companies characteristics, by sector* Around half are SME* 70% of industrial production is in theSE region (52% in SP State)* Almost 90% are micro enterprises* Familybusinesses* Small familyfarming, predominantly in the NE* Agribusiness, big properties in theCenter EastEasiness of Doing BusinessBRAZIL ComplexityInstitutions,Laws, taxsystem, relationshipsDiversityculture, income, educationOpportunityTransportation, Infrastructure, tecnology, agribusiness, marketBrasilia82,6% treated48,6%208.847.528 (2018)76- 3.6%(2016)1,1% (2018)20162 trillion (US, 2017)76%est 201818,0%6%70%(2015)885,2%1,7 devicesAgriculture Historical and current development• Military regime: import substitution industrialization• Price control and export quota• Received international food aid until the 1980s Stable political & fiscal environment Open policy & investment Huge increase in productivitySME x BIG CompaniesSME in Brazil• 99% of total enterprises• 25% of GDP• ~60% % of formal jobs, 40% of wages• Responsible for 84% of new jobs in the last 6 years•BIG Companies• 1% of total enterprises• 366 companies listed (2011)• Public Policies to create Big Brazilian Multinationals• BNDES influence• From 2005 to 2012, BNDES disbursed more than R$ 12 billions in internationalization projects for different sectors.Brazil Business EnvironmentProfa Isabela Baleeiro Curado200920132016Source: Word Bank, 2017PopulationDensity, 2010 UnemploymentIlliteracyThe “new” middle class75% real increase(2002-2014)
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