Doing Business and Investing in Brazil
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Our introduction to Brazil’s business and legal environment helps you to understand the Brazilian market and economy Doing Business and Investing in Brazil www.pwc.com.br PwC – Brazil – Information and Documentation Center PwC P946d Doing business and investing in Brazil / PwC. -- Sao Paulo : PwC, 2013. 168 p. Contents: Brazil: a profile; Business environment; Foreign trade and investment opportunities; Investment incentives; Restrictions on foreign investment and investors; Regulatory environment; Banking and finance; Exporting to Brazil; Business entities; Labor relations and social security; Audit and accounting; Taxation; Appendices. The information contained in this guide is based on data and regulations in effect on February 2013. 1. Capital (Economics) 2. Foreign investment – Brazil I. Title CDD 332.6730981 This Guide on Brazil supersedes the Guide dated May 2010. Any reader who would like a more detailed discussion of the subjects dealt with herein is cordially invited to contact a partner in any of our offices. © 2013 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way. March, 2013 Doing Business and Investing in Brazil 1. Investment climate 2. Doing business 3. Audit and accounting 4. Taxation Appendices Foreword In the last few years, Brazil has emerged as a stronger and more attractive global player. A high degree of economic diversification, combined with a strong domestic consumer market and a broad selection of trading partners, bolstered by a well regulated financial system, have been keys to successfully mitigating the effects of the international economic crisis. Unemployment in Brazil is low, wages are rising and the level of foreign direct investment is high. There are plenty of opportunities, particularly in agribusiness, oil and gas, mining, retail, capital projects and infrastructure, and in catering to a growing demand for education and healthcare. For all these reasons, Brazil is surely a target for many business leaders around the world. However, as with any other emerging economy, Brazil presents issues and challenges that businesses must consider prior to establishing operations here. With our 2012 edition of Doing Business in Brazil, PwC aims to provide an introduction to the business and legal environment, helping you understand the Brazilian market and economy. This publication does not intend to offer an exhaustive analysis, but rather provides general observations and guidance about the many questions PwC has encountered from clients doing business in Brazil. Certain businesses or industries may be subject to specific legal requirements not referred to in this guide. In addition, certain projects may require specialist advice and appropriate accounting and legal advice from one or more of our dedicated teams. Fernando Alves CEO PwC – Brazil PwC | Doing Business and Investing in Brazil Table of Contents 1. Investment Chapter 1 |Brazil - A profile .................................................... 11 Investor considerations ............................................................................11 climate Geography and climate ............................................................................11 History ....................................................................................................12 Political system ........................................................................................12 Legal system ............................................................................................13 Population and social patterns .................................................................13 The economy ...........................................................................................15 Tips for business visitors ..........................................................................24 Chapter 2 | Business environment ......................................... 26 Investor considerations ............................................................................26 Industrial climate ....................................................................................26 Overview of industry ...............................................................................27 Aims of government policy ......................................................................27 Public/private sector cooperation and relations .......................................30 Industrial/management relations ............................................................30 Overseas trade relations ..........................................................................30 Chapter 3 | Foreign trade and investment opportunities ....... 31 Investor considerations ............................................................................31 Investment climate ..................................................................................31 Special investment opportunities .............................................................32 Planning guide for foreign investors.........................................................33 4 Table of Contents 2. Doing Chapter 4 | Investment incentives .......................................... 37 Investor considerations ............................................................................37 business Investment policy ....................................................................................37 Tax concessions .......................................................................................38 Regional incentives .................................................................................38 Special tax regimes ..................................................................................39 Special tax incentives for the FIFA Football World Cup (2014) .................41 Plano Brasil Maior (Greater Brazil Plan) ..................................................42 Direct Investment Incentives ....................................................................42 Industrial policies ....................................................................................43 Industry incentives ..................................................................................45 Investment and innovation ......................................................................45 Chapter 5 | Restrictions on foreign Investment and investors ....................................................... 47 Investor considerations ............................................................................47 Regulatory climate ..................................................................................47 Exchange controls ...................................................................................48 Restrictions on foreign investment ...........................................................50 Policy trends ............................................................................................51 Chapter 6 | Regulatory environment ...................................... 52 Investor considerations ............................................................................52 Regulation of business .............................................................................52 Competition policy ..................................................................................52 Securities markets ...................................................................................53 Consumer protection ...............................................................................54 Pollution control ......................................................................................54 Special industries ....................................................................................55 Patents, trademarks and copyright ..........................................................55 5 PwC | Doing Business and Investing in Brazil Chapter 7 | Banking and finance ........................................... 56 Investor considerations ............................................................................56 Banking and finance system .....................................................................56 Specialized financial institutions .............................................................60 Investment institutions ............................................................................60 Financial markets ....................................................................................60 Sources of funds ......................................................................................61 Chapter 8 | Exporting to Brazil ............................................... 62 Tips for exporters ....................................................................................62 Import restrictions ...................................................................................62