Invest in Brazil: five reasons you can’t ignore

Jul 10, 2020

Invest in Brazil has always been a option for foreign investors.

Many foreign companies invest in Brazil and look at market opportunities with a medium-term vision. The data of recent years clearly show that foreign companies believe in Brazil. Despite the severe economic crisis that hit the country in 2015-2016, the number of outside companies that decided to open a subsidiary or invest in Brazil has increased. Foreign direct investments (IED) confirmed and announced that since 2003, coming from China, USA, France, Italy and Japan, totaled approximately US $ 260 billion, with the greatest historical value occurring in the accumulated 2019, up to the 3rd quarter.

On the qualitative level, the foreign companies have figured out how to invest money in Brazil and have now taken a leading role in the market in strategic sectors for the Brazilian. According to IED The US direct investments in Brazil since 2003 concentrated in the industrial sector, although it also stands out in the financial services sector, telecommunications, and electricity.

Why invest in Brazil? Here are the five good reasons you can’t ignore!

  1. He is a leader in The Mercosur (South American Market). Brazil is a global power, ranked among the top 10 economies in the world and is the largest in Latin America.
  2. It is a global destination for investment. It is a country open to foreign direct investment and continues to attract international and innovative companies, thanks to profitable opportunities supported by regulations of protection to corporate ownership.
  3. It is a market of over 200 million inhabitants. Brazil has now become the eighth largest economy in the world, offering countless opportunities for businesses, many of which are still unexplored. It is the largest domestic consumer market in the world, with strong domestic demand for services, goods and agricultural products.
  4. It has a diversified economy that is not based on a limited number of sectors, but rather on a wide range of economic sectors. The industrial sector is very competitive throughout Latin America that boasts among the largest aerospace, automotive, oil, petrochemical, mining, chemical and capital goods industries, medical equipment, and finally technology.
  5. It recently concluded negotiations for an EU-Mercosur free trade agreement that opens up further favourable prospects and an increase in bilateral trade and investment flows.

Now that you know why to invest in Brazil discover bellow all the steps to reduce risk and maximize results in a complex market like Brazil. Learn how to invest in Brazil through a structured approach and enter this market at its best.

Market pre-assessment

A market assessment allows you to have a holistic view of the niche, helping to understand the quantitative and qualitative aspects that allow for better decision-making. Therefore, before entering the market of your interest, predict demand, analyze the value chain, risks and costs, check the availability of resources, check barriers to entry and competition.

Market choice and access method

Based on the market assessment, you have to perform the internal analysis to see if your company uses methods such as SWOT analysis, to look for the best access method, which can be either through acquisition, joint venture, merger, or more.

Preparation for entry into the Brazilian market and subsequent implementation

If your investment preferences are about acquisitions, identify your target profile, prioritizing goals through the long list, shortlist, and classification. After this phase, it is necessary to carry out preliminary due diligence, a detailed evaluation, contract negotiation and a tax structure.

For Greenfield, the first step is to develop the business plan, select the location and product, build a financial model, an operational plan, an incentive of the tax structure and, finally, the preparation of a roadmap to follow. You must implement the business plan first, then planning and operational design, procurement, acquisition or construction of the real estate, staffing, planning and launching control, and finally the creation of the site.

If you have decided Invest in Brazil, remember to have the support of a qualified partner who can help you on how to invest money in Brazil and make your investments successful.

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