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Doing business in Brazil:

Brazil trade and export
guide
As of 11 April 2014
Contents
1.Brazil export overview
2.Challenges doing business in Brazil
3.Growth potential
4.UK and Brazil trade
5.Opportunities for UK businesses in Brazil
6.Start-up considerations
7.Legal considerations
8.Tax and customs considerations
9.Entry requirements
10.Contacts

Ing. Scott Christopher Schriener

UPAO Industrial Engineering

Brazil export overview

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Brazil is the fifth largest country in the world, with a population of approximately 190
million. Brazil is the worlds sixth largest economy and by far the largest in South
America.

It has one of the worlds most rapidly developing economies and a Gross Domestic
Product (GDP) per head that is greater than India and China.

400 of the worlds 500 largest companies operate in Brazil. These include many UK
companies, such as Rolls Royce, BG Group, Shell, BP, JCB, Rexam and Experian.

Brazil is one of four countries which make up the BRIC (Brazil, Russia, India and China)
economies. Goldman Sacs Bank reported that it has the potential to be one of the worlds
most dominant economies by 2050.

Strengths of the Brazilian market include:

strong industrial, business and consumer base

a sustained period of economic growth

European-oriented culture and business practices

political stability and a solid democracy

most of the worlds largest investment banks are headquartered in So Paulo

Challenges doing business in

Brazil
Brazil has an enormous potential for UK companies, but it will
take time, money and effort. Challenges include:
complex tax system with high taxes
long journeys between cities and states, where cultures can
vary significantly
a lot of importance is put on personal contact, you may need
to visit several times before securing a deal
ranked 76 in the Transparency Internationals corruption
perception index (CPI)
organised crime is a significant problem in some parts of
Brazil
Please show the students this web page and find Peru.
https://en.wikipedia.org/wiki/Corruption_Perceptions_Index

Growth potential; Economic

growth

Over the past decade, Brazil has shown solid economic stability. In
the past 10 years, more than 35 million Brazilians have been lifted
out of poverty into the emerging middle class. Brazil has seen an
average growth of 3.4% GDP over the last 4 years.

Brazils services sector accounts for more than two thirds of its
GDP, followed by industry and agriculture. The combined value of
these sectors represented US$ 2.5 billion GDP in 2013. They were
responsible for approximately 1.5% of global trade.

Brazil has identified the infrastructure as a priority sector for

economic development. This includes road and air transport,
cargo logistics and energy.

Latin America competition

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Brazil is the largest economy in Latin

America. It is a gateway for business in
neighboring countries.
The largest port in the continent is Santos,
in the State of So Paulo. It is the point of
access for most imports from Europe and
India.

Free Trade Agreements:

MERCOSUR
Mercosur is South Americas leading trade bloc. It is like the EU with tariff-free
trade between its member states. Mercosur encompasses Brazil, Argentina,
Uruguay, Paraguay and Venezuela and has a regional market of over 250 million
people.

Brazil trade
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* Primary exports
Transport equipment, iron ore, soybeans, footwear, coffee, automotive products
Primary export partners
China 12.49%, US 10.5%, Argentina 8.4%, Netherlands 5.39%, Germany 4.05%
Total Export Value: 199.7 billion US$

* Primary imports
Machinery, electrical and transport equipment, chemical products, oil, electronics
Primary import partners
US 16.12%, China 12.61%, Argentina 8.77%, Germany 7.65%, Japan 4.3%
Total Import Value: 187.7 billion US$

UK and Brazil trade

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The UK has a strong and historic trading relationship with Brazil,

going back over 200 years. It is the UKs largest trading partner
in Latin America with a bilateral trade in goods worth 5.1 billion.
This grew by 3.5% in 2013. Over the last 4 years, UK exports to
Brazil have grown by 20%, reaching 2.5 billion in 2013.
Top UK exports to Brazil include:

machinery
vehicles
pharmaceuticals
chemicals
plastics
beverages

Opportunities for businesses in

Brazil

Aerospace; The Brazilian Aerospace Industry is the largest in

the Southern Hemisphere. There are opportunities for
companies in the following areas:

Supply chain and partnerships

composites and metallic structures

automation technology

connectivity

maintenance, repair and operations

Automotive; Brazil is the seventh largest producer of vehicles

in the world. Brazilian manufacturers invested US$11.2 billion
in the market between 2010 and 2012. The automotive sector
also attracts massive overseas investments.

low carbon technologies

engineering services, such as software and consultancy

lightweight components and advanced materials

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Opportunities for businesses in

Brazil Cont..

Creative Industries; Boosting the creative industries

sector is a priority for the Brazilian government. Recent
studies showed that creative industries account for 16.4%
percent of Brazils GDP.

Opportunities in the sector are available for the following

sub-sectors:

architecture
music
film
computer games

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Opportunities for businesses in

Brazil Cont..

EDUCATION; Educational attainment is low in Brazil. It is

57th in the Organization for Economic Cooperation and
Developments ranking. The Brazilian government is
planning on investing 10% of GDP on education by 2020,
the highest rate of any country in the world.

There will be many opportunities for companies in:

English Language Teaching (ELT)

vocational education
higher education

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Opportunities for businesses in

Brazil Cont..
Energy; Brazil is the largest energy market in South America and has
the second largest oil reserves in Latin America. Petrobras plans to
invest US$220.6 billion by 2018. The International Oil Companies
(IOC) is investing an extra US$50 billion over the next two years.
Brazil is particularly interested in the UKs expertise in the following
areas:

bringing challenging oil and gas projects to completion

offshore equipment and services

pipeline and seabed surveys

inspection, repair and maintenance

Sports Infrastructure;

Brazil is hosting Rio 2016 Olympic and Paralympic Games.

Companies with experience in the 2012 Games have a unique

selling point in the Brazilian market.

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Opportunities for businesses in

Brazil Cont..

Airports, Rail and Ports; Improving Brazils infrastructure is critical

to maintaining the growth of the economy. Urban mobility is
another focus, responding to the demands of a growing
population.

There are opportunities for companies with technologies and

innovative products in either of these areas.

Start-up considerations
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The most common options for a company starting up in Brazil are:

branch
limited liability company
corporation
joint venture
direct or indirect investment
agents or distributors

Legal considerations
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Brazil is a member of the World Intellectual Property Organization (WPO). Its legal
provisions are generally consistent with international standards. A new trademark and
patent agreement law was enacted in Brazil in 1996. It follows international standards
established by the Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Legal processes in Brazil can be time consuming and costly.

Tax and customs considerations

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Tax;
The Brazilian tax year starts in January and ends in December.
There are a number of taxes in Brazil, these include:

COF, a Social Security tax

STT, a state tax of 17 or 18%

PIS, income tax

ICMS, value added tax

IPI, excise tax

Customs;
You will need to know what import duties a product will attract when it
lands in Brazil. High duties may make an export too expensive for the
Brazilian market.