Things to keep in mind when incorporating a company in Brazil

Brazil is the not only the largest country in both Latin America and South America, it is also the fifth-largest country by area and sixth-largest by population in the world. Brazil is also the ninth-largest economy in the world in terms of nominal GDP as of 2016. Until 2010, Brazil was recognized as one of the world's fastest growing major economies and gained new international influence and recognition due to its economic reforms. Its diversified economy includes industry, agriculture and various services.

Brazilian economy

Industry, including steel and petrochemicals, automobiles, computers as well as aircraft and consumer durables, accounted for 30.8% of the GDP and is highly concentrated in Rio de Janeiro, São Paulo, Porto Alegre, Campinas, and Belo Horizonte. Tourism is a growing sector in Brazil and a key industry for several regions. Most popular tourism product is natural areas for ecotourism combined with leisure and recreation. Brazil is also one of the largest producers of coffee, oranges, sugar cane as well as soybeans and papaya.

Surely, such country attracts foreign entrepreneurs to expand their businesses in the local market or they might even choose incorporating a company in Brazil as a starting point to reach the whole Latin America. If also you have decided to incorporate your business in Brazil, there are several things worth discussing and keeping in mind to make your business successful from the first day.

Doing business in Brazil

Business environment in Brazil has its own rules and peculiarities connected with Brazil's culture and history. In case you do not have good knowledge about Brazilian habits or a local agent to guide you through them, you can consider incorporating your company in São Paulo as it is the most internationally oriented city in Brazil and the business there is usually conducted in more ‘western' manner than in other cities. Meanwhile, the more north in Brazil you are located, the more conservative becomes the business mentality.

Generally, a major part of Brazil's economy consists of family businesses, which are more patriarchal and more formally organized than western companies. A decent family background is an important factor when evaluating a potential business partner. Brazilian companies are vertically organized and all business matters are discussed and decided by superiors. Good manners and dress code are a must, you should show intellectual interest about Brazilian music, literature and history. If you want to be taken seriously in Brazil, do not try to save money by staying in a cheap hotel – choose a first class hotel and receive your business partners in style.

Business meetings

Before doing business in Brazil, it is very important to establish good personal relationships. Brazilians do not go straight to business, they first want to get to know you better personally. Therefore it helps if you are introduced by a mutual acquaintance or someone respected by your business partner. The same as your Brazilian counterparts will want to get to know you better, you are also expected to show genuine interest in them. Due to the personal relationship in business, it will take some time to rebuild the cooperation if a local sales representative or other personnel is replaced.

Often, business meetings start later than planned and take longer than expected – you should keep this in mind if several meetings are planned for one day. You should arrange a business meeting around two weeks in advance and confirm it two days before the meeting. It is highly inappropriate to visit a company without an appointment.

Other tips when incorporating a company in Brazil:

If you want to succeed in Brazil, you will have to learn Portuguese;

Never offer bribes to get around the bureaucracy – foreign entrepreneurs in Brazil are being watched closely;

Consider hiring a local agent to deal with all the bureaucratic hurdles;

It takes a relatively long time to achieve something in Brazil – be patient and adjust your plans and budgets accordingly;

Look straight in your business partner's eyes, otherwise it might be interpreted that you are hiding something.