Brazil is well known for its beauty and melting pot population. Now the ninth largest economy in the world, it is also once again a business investment destination.
— By William Bell

The Federative Republic of Brazil was hit hard by a recession in 2014-2016, and it set the country back economically for the last few years. Once touted as a rapidly growing economy and part of BRIC, Brazil has experienced challenges that slowed progress. Though the world's ninth largest economy, it remains an emerging market. The potential for successful investing is enormous.

Like most emerging markets, there are higher risks compared to investing in a developed economy, but careful business planning can minimize them. Brazil offers a wealth of natural resources, a stable economy, a growing technology sector, and a desire to expand development to increase employment and raise the standard of living for the poorer sections of the country.

Emerging markets are expected to become power players in the global economy over the next five years, and Brazil is expected to be one of the leaders with its already large and diverse economy poised for growth.

On a Path of Reform
For many decades, Brazil's natural resources and agriculture formed the economic backbone, but beginning in the 1960s, the focus was placed on industrial development. The country is a major producer of steel and iron, petrochemicals, and consumer durables. The economy also has a large automobile assembly industry and a growing technology sector. Brazil is the second largest producer of food and one of the world's producers of hydroelectric power, with plenty of opportunity to expand this sector further as needed.

The World Bank's 2019 Doing Business report showed that Brazil is striving to increase business.

Brazil made starting a business easier by launching online systems for various business transactions, like licensing and company registration. The government reduced the time required for complying with import documentation by introducing electronic certificates of origin. Labour laws were reformed in areas like work scheduling and compensation. Brazil moved up from a rank of 125 to a rank of 109 out of 190 countries, per the 2019 World Bank report.

Open for Business
The Ministry of Industry, Foreign Trade and Services is open for business and invites investors from around the world to look again at Brazil's opportunities. This agency is responsible for foreign trade, technology transfers, industrial quality, international trade negotiations, free zones and more.

The "Brazilian Official Guide on Investment Opportunities" is a good document for beginning research on the type of opportunities. The guide presents 149 projects at the state and federal levels, demonstrating Brazil's commitment to economic expansion and infrastructure improvements. Some of the best sectors for Foreign Direct Investment include oil and natural gas, electricity transmission, agribusiness, and real estate. The agribusiness sector has strengthened based on tech-based scientific and technological improvements and improved equipment.

Brazil is making a sizable investment in the growth of the technology industry, and the IT industry is growing. IT spending increased by 9.8 per cent in 2018, per the Brazilian Association of Software Companies and IDC, the market intelligence company. The total business generated by the IT industry consisted of $23.9 billion in hardware (51.3 per cent), $12.2 billion in services (26.2 per cent), and $10.5 billion for software (22.5 per cent). Brazil has the highest IT investment ranking in Latin America.

Brazil and the United States signed the Agreement on Trade and Economic Cooperation to spur trade and investment in 2011. In 2018, trade in goods and services between the two countries was $103.9 million, leaving plenty of room for trade increases. U.S. exports to Brazil supports more than an estimated 300,000 jobs. The top export categories for goods from the U.S. to Brazil were mineral fuels; aircraft; machinery; plastics; and agricultural products like wheat, prepared food, feeds, eggs, and chocolate and cocoa products. U.S. exports to Brazil in services were for transport, travel, computer, telecommunications, and information services. U.S. direct investments were directed to manufacturing, insurance, finance and mining.

Exports from Brazil to the U.S. were primarily mineral fuels; iron and steel; machinery; aircraft; and agricultural products like coffee, fruit and vegetable juices, tobacco, red meats, and essential oils. Most of the services exports from Brazil to the U.S. were in travel, professional and management services, development, and research sectors.

'Amigos Amigos, Negócios à Parte' "Friends are friends, business is business" is one of many Brazilian sayings that is heard, summing up the country's culture. The population of 211.2 million inhabitants is a melting pot of people of European and African descent and indigenous people. The result is a vibrant but complex culture. The official language is Portuguese, reflecting a history of mass Portuguese settlements.

The culture values time with family and friends, and developing friendly positive business relationships. Brazilians believe business negotiations are with people and not companies. Final decision-making is by the person at the top. Many business meetings will take place over a meal.

There are risks of doing business in Brazil, of course. One of the risks concerns government corruption. The country has experienced a series of corruption situations involving the government and private companies.

The current president is Jair Bolsonaro, and he is instituting a number of reforms to end a repeat of previous corruption practices and to re-establish trust in the government. The risks associated with reforms are related to political infighting and potential continuing corruption. It is never easy to turn a government around when corruption has become embedded in its operations. However, Brazil's government is focused on weeding out corruption, attracting foreign investors, increasing exports, and growing the economy.

Take Another Look
As colourful Brazil continues to overcome its economic challenges, the future looks very bright. It is a leading regional economy and a gateway to Latin America. Brazil has a solid investment framework and is already a global player.

The Brazilian-American Chamber of Commerce in New York City, the U.S. Chamber's Brazil-U.S. business Council in Washington, D.C., and the American Chamber of Commerce in São Paulo are always ready to assist.