Exploring the Presence of U.S. Companies in Brazil

 Only 25 years ago, 66% of people in rural Brazil and 38% of people in urban Brazil lived below the poverty line. Companies from all over the world still find the country to be a very attractive place to invest. People are still optimistic about Brazil, even though there are ongoing corruption problems and economic uncertainty, and even though it is one of the hardest places in the world to do business. Brazil is still the best place for US companies to invest in Latin America. For more than one hundred years, the two biggest economies in the Americas have worked together in business. In fact, the American Chamber of Commerce in Rio de Janeiro is the oldest in Latin America, and trade goes both ways and is very large and varied. The US is still one of the main places where direct investment comes from in Brazil. In 2014, the most recent year for which data is available, the Brazilian Central Bank said the US had the biggest single-country stock of FDI in Brazil, worth US$112 billion.

Brazil is a "must play" market for US companies because it has more than 200 million people, which is almost 3% of the world's consumers


In 2016, the US sent 16% of all goods brought into Brazil, making it the second-largest exporter of goods after China. Germany, Argentina, and South Korea came in at the top of the list. Also, the US sells a lot of services in Brazil; in 2016, US goods sent there were worth almost $25 billion. Brazil is a good place for US companies to start doing business in South America because it borders 10 other countries. Just keep in mind that people there speak Portuguese, not Spanish. Businesses in the area are happy for US companies to come in and work with them. One way for a US company to get into the Brazilian market is to partner with a local business. The local business can help the US company understand the complicated rules and laws, and the government is said to like this kind of arrangement. Watch out for how much it costs to do business in Brazil. But if you want to do business in Brazil, you need to know a lot about the country's distribution system, government procedures, employee benefits, environmental laws, and complicated tax system. You also need to know about the "custo Brasil," which are the direct and indirect costs of doing business. The US Olympic Committee says that for the Olympics in Rio, they set up a store for Team USA. To begin, it had to set up a business, which according to local rules required a Brazilian president. To do this, they chose a lawyer from a firm in Rio. Adecco, the store's sponsor, helped them hire people by making sure there was a strict mix of locals to foreigners. It was also necessary to deal with a sales system that had to send real-time tax returns to the government, as well as store records and customer receipts. They said the last problem was getting the goods into Brazil because packages often get held up in customs for months. It cost more for buyers to buy things than it would cost in the US after all the problems were fixed.

In addition to having to deal with high tariffs


US businesses have to deal with a complicated legal system and customs processes. This is because the Brazilian government buys the most goods and services from the US. Don't forget that Brazil is not a member of the WTO Government Procurement Agreement. When Brazilian companies bid on government contracts, they often get "margins of preference." If US companies don't have a strong foothold in a country, either through partnerships or a subsidiary, they may lose out on business opportunities. Also, keep in mind that Brazil does have a reputation for being crooked. "Operation Carwash" has found a complicated web of corruption in the public sector, fraud on contracts, money laundering, and tax cheating that come from routinely charging too much for government work. But the fact that the investigation is going on shows that Brazil wants to fix its image and take steps to improve its place in the world. Labor rules can cause people to trip. Labor rules are hard to understand, though, which may be the biggest problem for US companies that want to do business in Brazil. There is no such thing as "employment at will." Brazilian labor laws are notorious for being rigid and overprotective of workers, with the idea that workers are the weakest link in the employment relationship. These laws also put a lot of taxes on salaries and require workers to get a lot of benefits, like social security, paid vacations, and a Christmas bonus. Brazil's President Michel Temer has given the green light to the central government to work on labor reforms. The government has had to deal with opposition and heated arguments, but the change went into effect in November 2017. Their goal is to cut down on labor costs and risks by a large amount. This could help companies make more money, which should lead to a lot more jobs.

Business goes well for US companies in Brazil


Don't be scared by any of that, though. Brazilian business is a huge chance for US companies that want to grow their reach internationally, and US companies have been doing well there for many generations. Exxon Mobil has been in business in Brazil for more than one hundred years, making it the oldest oil and gas company that has always been in business. Chevron is also there, taking advantage of the oil and gas business's growth. Another big area for US business that does well is cars. Both General Motors and Ford have stable market shares in Brazil. Because people in Brazil are so interested in technology, UB set up a research arm in 2010, and GE opened a global research center in Rio in 2014 with the main goal of doing research and development. Apple is, of course, also there, but it will be hard for them to sell their goods there because most electronics in Brazil are heavily taxed. Today, the best chances are in infrastructure, energy, healthcare IT and medical equipment, services, and aviation and defense. People in Brazil are also very interested in technology, and the country is a great place for tech start-ups. TMF Group in Brazil US companies can do well doing business in Brazil as long as they know what the obstacles and risks are. For a good market entry, look for help from people who live in the area. TMF Group knows the area well enough to help you get through these tricky situations. Talk to us if you want to start a new business in Brazil or just make it easier for the US and Brazil to work together. Find out more about the TMF Group in Brazil.

Comments

Post a Comment

Popular posts from this blog

Which Countries Can Enter the USA Without a Visa? A Complete Guide

Image
  A visa is a type of travel document that grants you temporary entry into another nation. Most of the time, you need to apply online, at an embassy, or at a consulate to obtain a visa before you travel. A visa may occasionally be obtained upon arrival. Typically, visas specify the length of stay and are attached to your passport. In order to monitor entry and prevent illegal immigration, the majority of countries require foreign nationals to have a valid visa. In an attempt to prevent security threats from entering a nation, visas are also utilized defensively. visas for tourists. Entry permits for tourism are known as tourist visas. Visas for tourists are often only good for three months, and they do not allow you to work. Generally speaking, there is no restriction on the number of times you can apply for a tourist visa for the same nation; as long as the embassy or consulate issues the visa, you are free to depart. visas for transit. When visiting a third country, a transit vi...
Read more

Brazil's Multinational Company Boom: Key Insights

Image
  Brazil is a good place for many global companies that are moving to Latin America (LATAM) to start. Brazil has the sixth-largest population in the world, which gives businesses from around the world access to a huge customer market. International groups that do business in Brazil can also trade with other Latin American countries thanks to trade deals that are good for everyone. However, global employers face big problems when they try to join this market on their own. Setting up a business in Brazil takes a long time and costs a lot of money. Also, the country's complicated tax and labor laws make it very hard to follow the rules. Here is a list of important things to think about if you want to do business in Brazil, along with the pros and cons of joining this market. Find out how working with a global expert can help you get your product to market faster and with less chance of not following the rules. Foreign companies that want to do business in Brazil should learn about the...
Read more

Do You Need a Visa to Visit Canada from the USA?

Image
    Should you require a Canada visitor visa to enter Canada, you might be able to apply while in the United States. Your application should clearly explain the reason you are not applying from your country of residence. Consider also the application technique you decided upon. If you decide on a paper application, for instance, it should be finished in your country of residence. Remember too that not everyone requires a Canada visa. While some nations just need an electronic travel authorisation (eTA), Visa-exempt countries do not call for a visa. Seeking the help of immigration lawyers will help you negotiate the complexity of obtaining a Canadian visiting visa from within the United States. For right help right now. Those having US visiting visas can select from a variety of visa options in Canada. Holding a US Visitor Visa gives you various choices for forms of Canada Visa. The following resides here: Go to apply for a tourist visa. Visitors from 57 countries including ci...
Read more