The size of Brazil and its consumer market are the great motivations for foreign companies to decide to expand their operations in the country – which is the largest economic power in Latin America. In addition, infrastructure-related demands create investment opportunities by attracting foreign startups to serve potential segments.
• Gateway to Latin America - Brazil is the largets economic power in Latin America and it has a privileged location in the east-central part of South America, where it borders almost all other South American countries, allowing companies to easily access Latin American and African markets.
• Innovation and technology - Brazil has the biggest and most diversified science, technology and innovation system of Latin America; It has a competitive differential within the sectors of aircraft building, oil exploration in deep water and software development; Brazil has internationally consolidated its competence in producing ethanol and biodiesel fuel.
• Consumer Market - The consumer market covers more than 900 million of potential consumers, considering Brazil, Latin America and North America.
• Energy and Agricultural powerhouse - One of the worldwide largest producer and exporter of agricultural products; The worldwide largest producer and exporter of coffee, sugar cane and fruit juices; The world’s largest exporter of soy, meat, chicken and leather.
• Improving business conditions - Fiscal adjustment and fiscal reform will be the cornerstones of the current macroeconomic realignment, ensuring predictability and sustainability of the public sector accounts and debt dynamics, improving spending effectiveness and improving confidence conditions both for investors and consumers.
In the experiences of Grant Thornton Brasil, our experts highlight the attractiveness of Brazil in the foreign market mainly among companies in the renewable energy segment, technology sectors, electronic security software, fintechs and energy beverage companies, which are establishing themselves in the Brazilian market in greater quantity in recent years.
To take advantage of these opportunities, companies that are preparing to start their operations in the Brazilian market face the period of adaptation to the new environment. This is due to the new tax and fiscal realities, payroll, cash flow, ancillary obligations and several other aspects related to business management, which require knowledge of local characteristics to plan your operations and optimize backoffice routines.
Denis Satolo, leading partner of Business Process Solutions – BPS at Grant Thornton Brasil, comments that among the biggest challenges in this journey is the perception of the cost of adapting the business to the market in the long term. "This management can be costly for companies when they make the comparison with their countries of origin or in other territories where they are already operating. To reduce costs and increase efficiency in the backoffice, it is necessary to have technology and automation resources as allies, in addition to having business partners that dominate local requirements to support this process of expansion and solidity in the Brazilian market. "
Companies that are beginning their internationalization with Brazil as their destination need to be aware of the adoption of practices, policies and dedicated systems so that the procedures are following the legislation and regulatory requirements of the country, mitigating possible errors and risks. This in all aspects from tax and fiscal, through the protection of personal data to issues related to ESG (environmental, social and governance).
The historical challenges related to the complexity of the Brazilian tax system and electronic ancillary obligations make foreign companies seek specialized support and advice to navigate these bureaucracies, so that these challenges are not obstacles to the various opportunities.
Sabrina Lawder, partner of International Taxes at Grant Thornton Brasil, comments that Brazil has adjusted several accounting issues and principles to international standards, but Brazilian accounting (BRGAAP) is not fully equivalent to USGAAP (American standard) and IFRS (European standard).
"When it comes to accounting for a foreign company, it is necessary to present an understanding of the international standard and requirements abroad. In general, companies are used to having, basically, VAT and Income Tax. It is necessary to understand that the Brazilian tax system is much more complex, but that with effective support it can be overcome even with an increase in cash by maximizing opportunities with the optimization of the tax burden, "he points out.
How can Grant Thornton Brasil help your company expand its business in Brazil?
Count on the support of our multidisciplinary team and comprehensive solutions to facilitate the start of operations in the Brazilian market, allowing the optimization of the backoffice in the initial phase, allowing greater concentration on core business and the development of main activities with long-term structured processes.
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