The country that we will review today is the largest state in Latin America by economy and 9th in the world by this indicator. Brazil is a good choice for doing business. Also, in recent years, Brazil has experienced some economic difficulties. For example, in 2009, Brazil’s economy shrank by 0.3%. This was partly due to reduced demand for Brazilian commodity exports. Over the past decade, a combination of tight credit restrictions, high levels of bureaucracy, political instability and damaging corruption scandals have hampered Brazil’s economic growth and investor confidence in the region. Read on to find out why you should consider doing business in Brazil.
Despite years of economic difficulties, the country looks positively to the future. The new government came to power in 2019 and plans to reduce government intervention in local markets, eliminate government corruption, open Brazil to foreign participation, and cut the unnecessary layers of bureaucracy that Brazil is famous for.
Brazilian biz culture
Business culture in country is relaxed, but at the same time sophisticated. Openness and friendliness are expected in most biz relations. Brazilians also value patience and control.
Brazil has a vertically hierarchical biz structure, meaning that final decisions are likely to be made by the highest-ranking member of the counterparty. This may result in a longer waiting period.
The line between personal and professional relationships is rather vague. Online business for sale in Brazil relationships are more about individuals than companies, which emphasizes the importance of easy conversations, face-to-face conversations, and constant discussion with business partners. Proximity and physical contact are used in casual or business discussions, although biz etiquette and culture become slightly relaxed the further south you go in the country.
Benefits of business in Brazil
Brazil offers many commercial possibilities for investors. Combined with the key benefits of doing business in Brazil, the possibilities become clear and accessible. Although the Brazilian biz habitat has its challenges, partnering with a local group ensures that you can successfully overcome these challenges and succeed in the market.
As you might have guessed, Brazil has traditionally been a world leader in agriculture, and this is still true today. Commercial opportunities are available for firms that have access to new technologies, equipment and services and can help modernize and make the agricultural sector more efficient. This type of investment is true for many national sectors, including the energy sector, mobile application development and fintech, all of which are growing at an impressive pace.
Business ideas in Brazil
Entrepreneurs can choose different areas for their investments, but which industry is the most profitable for a foreign investor to invest in?
- In forestry. Very good conditions are provided for the development of this direction in the country – these are favorable rates on loans, and low prices for land.
- In agriculture. In Brazil, this industry is very developed, moreover, the country lives off the export of agricultural products.
- In the extraction and sale of minerals. According to statistics, only 10% of the mineral resources of Brazil have been explored. The extracted resources can be sold at international auctions.
- In meat preparation. This is one of the most profitable industries: the meat produced in Brazil is known all over the world.
Brazil’s infrastructure
Country has excellent infrastructure and transport links, unlike some of its neighbors. Brazil has extensive and developed roads (and one of the largest highway systems in the world), as well as a diverse railway system. For companies that import and export goods, this is highly valued and makes Brazil a great trading hub.
Opportunities of market in Brazil
Brazil has the fifth biggest population in the world and a rapidly growing middle class (as in the entire Latin American region), which means a huge consumer market. The size and diversity of the consumer market has created a host of exciting biz opportunities for foreign business-companies looking to gain access to new clients in Brazil.
Brazil businesses for sale registration forms
In Brazil, there are various forms of business registration. The most popular include:
- Limited liability companies;
- Joint-stock corporations.
A limited liability company must have two or more founders who are citizens of Brazil, who may have representatives in that country. However, the requirements for the authorized capital of such a company are not spelled out in Brazilian law.
As for the joint-stock corporation, when registering an enterprise, it is necessary to pay 10% of the authorized capital, and among its founders must be at least two Brazilians.
Taxation system
In Brazil, individuals and legal entities, as well as individual entrepreneurs, pay taxes at different rates. For legal entities, this rate will be 15% of net profit. To this number it is necessary to add the pension tax, its value is 8%. All taxes listed are federal, but each state also provides for regional taxes, which are approximately 5% of the federal tax rate.
Step by step instruction how to buy a business in Brazil
Another attractive option for doing business in Brazil is buying a ready-made business. This method can be interesting for those who do not want to start from scratch.
Starting a new business in Brazil can take a long time, especially for foreign entrepreneurs who are not used to Brazilian biz procedures. An alternative option is to purchase a ready-made biz, which will permit you to skip many stages of planning. This is because the company already has a known track record, which reduces the uncertainty of the investment. You can also count on an already assembled structure, guaranteed customers and an estimated income.
So instruction of buy ready-made business in Brazil for sale:
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Choice of industry and business size
An entrepreneur must have the knowledge necessary to manage a company. But it is also important to analyze the market situation in the sector, if it is declining or has chances of growth.
As for the size of the business, it depends on some factors such as: the amount of money available for investment, the number of employees, etc.
Besides consulting the media, you can contact a business broker or do your own research by visiting places or asking people if there are good businesses for sale in Brazil.
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Getting to know the seller of the offer
At this stage, it is important to ask him why he is selling the company, what is the income, who are the customers, etc. The buyer is even interested in spending a few days observing the company from the inside, watching its work. and take notes.
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Start the “evaluation” process
At this stage, you should check all the necessary documents to make sure that the business is legal. Here are some of the documents:
- Certificate of payment of federal and municipal taxes;
- INSS pass certificate;
- FGTS regularization certificate;
- Certificates of the criminal partner of the firm;
- Certificate issued by the State Committee for Trade in full;
- Regularity of the company’s headquarters;
- Lease of property;
- Statutes;
- Furniture taxpayer registration card;
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Due Diligence
Due Diligence is perhaps the most important of all steps. Here, the buyer will evaluate the target company or its assets and ensure that they are not buying assets that are tied to other liabilities or responsibilities, i.e. they are not buying assets that require the approval of others.
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Preparation and signing of the contract
The amount the business owner is asking is not every time in line with the market or what the business has to offer. One way to find out the true value of a project is to calculate how much profit the company will make over the next five years based on the previous years’ revenue.
It is quite difficult to get a Brazilian fund to finance your purchase, especially if you are from abroad. The good news is that most business owners will sign a business for a 50% down payment and allow the rest to be paid in a certain number of payments.
