Current business situation
The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Brazil. This is regularly updated, and should be checked before planning travel.
When negotiating with Brazilian business people, be aware that they usually think in terms of US dollars.
It is important to keep in mind that personal contacts play an important role in Brazil and can make the difference in doing business deals.
Although many Brazilians speak English, some may feel more comfortable in business meetings if an interpreter is present.
Austrade São Paulo recommends that you are accompanied to business meetings by a local contact and that all initial written correspondence with potential business partners be in Portuguese or in English. Avoid using Spanish as a substitute for Portuguese.
In business conversations, use titles if any (e.g. Professor, Doctor), and ‘Senhor’ (Mr) or ‘Senhora’ (Mrs).
During meetings, use the title ‘Mr’ or ‘Mrs’ and then their first name, not their last name (i.e. Sr Carlos, Sra Julia).
They are not very straightforward businesspeople and have a policy of never blatantly saying ‘no’.
Due to the sheer size of the city, business people coming to São Paulo should have some idea of where they are going in order to determine how much travel time will be needed. If possible, try to avoid the rush hours (8.00am to 10.00am and 5.30pm to 7.30pm). During the rainy season, (January to March) the traffic is virtually paralysed.
The dress code is very similar to Australia’s. Ties are generally not required in business meetings except for in some specific sectors and occasions such as law firms, financial institutions and for senior executive meetings or other more formal events.
Setting up in Brazil
Finding the right partner
It is important to remember that you will not succeed in Brazil without developing a sound business plan and a longer-term strategy. Important points to address early on include:
- potential local business presence through an agent, representative office or joint venture partner
- strategies to deal with administrative and legal requirements, including tariffs and taxes
- a strategy to counter variations in the economic climate and how these may affect your business plan
- the need to localise manufacture of the product at some stage.
Brazilians do not respond well to short and infrequent visits by foreign representatives, preferring instead a continuous working relationship. Rarely is a deal completed by telephone or letter. Buyers in particular are concerned with after-sales service and support, due to the extremely rigorous local consumer protection legislation.
In market representation
For most exporters it is necessary to establish a local presence through an agent/distributor, representative office or joint venture partnership. Where business contacts need to be maintained or where regular sales or service follow-up is required, being on the ground is critical to your business prospects.
Brazil enjoys a large choice of reputable and experienced sales agents. Agents are a popular choice for new exporters seeking to develop a market presence, particularly for smaller companies. Agents generally involve lower market entry costs than representatives and can provide good access to potential buyers. The challenge is to find an agent with the right contacts and right experience to suit your product.
A smaller number of exporters choose to establish representative offices. Given the considerable costs in setting up such an office, these companies usually have specific needs that cannot be met by agents or distributors. These are usually companies that require a high degree of control over their products and after-sales service, or where commercially sensitive intellectual property is involved.
One option that is increasingly popular is the establishment of a joint-venture partnership with a local company. One attraction of such partnerships is that costs and risk are shared by the partners, with the Brazilian partner bringing to the venture local market knowledge, know-how and experience in the Brazilian business environment.
Due to the peculiar legal, cultural, and especially bureaucratic characteristics of Brazil, it is highly recommended that Australian companies interested in entering the Brazilian market consult a law firm before establishing a binding link with a Brazilian partner.
Banking and finance
Any non- resident investor, whether an individual or a corporate entity, may invest in the Brazilian financial and capital markets. Foreign funds entering Brazil on behalf of non-resident investors may be invested in fixed or variable income instruments, offered on the financial and capital markets, just as they are to resident investors.
There are in Brazil several commercial banks and financial institutions controlled by the Federal State, the primary purpose of which is to foster economic development, especially in the agriculture, housing and manufacturing sectors.
The largest stated-owned banks are Banco do Brasil and Caixa Economica Federal.
The private financial sector includes commercial banks, multiple service banks, investment banks, credit cooperatives and others.
Links and resources
Government, business and trade
Australia-Brazil Chamber of Commerce (Sydney) – www.australiabrazil.com.au
Australia Latin America Business Council – www.alabc.com.au
Brazilian Community Council of Australia – www.bracca.org
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.