Brazil: A Promising Market - CCMM · Brazil: A Promising Market Frederico Marques PhD & LLM International Law Partner & Foreign Legal Consultant, McCarthy Tétrault Chairman, Brazil-Canada

McCarthy Tétrault LLP / mccarthy.ca

Brazil: A Promising Market

Frederico Marques

PhD & LLM International Law

Partner & Foreign Legal Consultant, McCarthy Tétrault

Chairman, Brazil-Canada Chamber of Commerce

February 27, 2014

Doing Business in Brazil.

Presentation at the Board of Trade of Metropolitan Montreal.

DOCS #13208457


Summary

1. Brazil Country Profile

2. Brazil History

3. Brazil Economy

4. Brazil and Canada Overview

5. Brazil & Canada, Stage of Development

6. Brazil & Canada, Most Problematic Factors for Doing Business

7. Why Brazil?

8. Brazil’s Major Opportunity Sectors

9. Doing Business in Brazil, Strategy Background

10. Doing Business in Brazil, Strategy

11. Tips for Doing Business in Brazil

12. Other Helpful Survival Hints

13. Government Assistance & Chambers of Commerce

14. Brazil in Pictures

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1. Brazil Country Profile

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QUICK FACTS:

Name: Federative Republic of Brazil

Population: 199.3 million (2012 est.)

Capital: Brasilia

Largest city: Sao Paulo

Other cities: Rio de Janeiro, Salvador, Belo Horizonte, Recife

Area: 3.3 million sq miles

Currency: Real

GDP: $2.477 Trillion (2011)

Main exports: goods, iron ore, steel, coffee

Main imports: motor vehicle and aircraft parts, goods, computer, coal

Language: Portuguese

Religion: Roman Catholic (74%)

Life expectancy: 69 years (men), 76 years (women)

Business Hours: Between 8-9am and 5-6pm

Time Difference: Currently 1 hour (3 hours during Canadian winter)


2. Brazil, History

¬ Discovered: 1500 (Portuguese Colony)

¬ Independence: 1822

¬ Republic: 1889

¬ Democracy: 1988 (Brazilian Constitution). Full democracy. Political

Freedom

¬ Economic Stability: 1994 Real Plan

¬ 3 latest President:

¬ Fernando Henrique Cardoso

¬ Luis Inácio Lula da Silva

¬ Dilma Rousseff

¬ Legal System: Civil Law

¬ Diverse and vibrant culture

¬ Growing middle class

4

Click on the BBC

icon below for a

chronology of key

events in Brazil


3. Brazil, Economy

A country of opportunities:

¬ Exports: $201.9 billion (2010 est.)

¬ Export Commodities: Transport equipment, iron ore, soybeans, footwear, coffee, autos

¬ Export Partners: China 12.5%, US 10.5%, Argentina 8.4%, Netherlands 5.4%, Germany 4.1%

(2009)

¬ Imports: $181.7 billion (2010 est.)

¬ Import Commodities: machinery, electrical and transport equipment, chemical products, oil,

automotive parts, electronics

¬ Import Partners: US 16.1%, China 12.6%, Argentina 8.8%, Germany 7.7%, Japan 4.3% (2009)

¬ Rich in Natural resources

¬ Economic Stability & Sound financial system

¬ Economic growth with social inclusion

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4. Brazil & Canada Overview

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Key Indicators 2011 Brazil Canada

Population 199.77 35.7

GDP (US Billions) 2,492.9 1,736.9

GDP per capita (US$) 12,789 50,436

Total Area 8,511,965 9,976,140

Source: The Global Competitiveness Report 2012-2013.



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Source: Statistics Canada & Worldbank.

Foreign Direct Investment (FDI) 2007 2008 2009 2010 2011 2012

Canadian direct investment in Brazil 7,687 9,873 8,560 10,321 9,923 9,844

Brazilian direct investment in Canada 13,974 14,492 13,177 17,261 14,527 15,810

Total FDI Received (including Canadian) 2009 2010 2011 2012

Argentina 4,017 7,845 10,719 12,128

Brazil 31,480 53,344 71,538 76,110

Chile 12,887 15,373 22,930 30,323

Colombia 7,137 6,745 13,403 15,649

Mexico 16,604 22,562 23.553 15,453

Peru 6,430 8,454 8,232 12,244



Bilateral Trade (Key Latin America Countries):

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Source: Statistics Canada & Worldbank.

Canadian Exports to

Canadian Imports from

2010 2011 2012

Argentina (Exports) – 52nd 283,912,051 495,296,185 299,285,104

Argentina (Imports) – 24th 1,555,466,710 2,358,743,431 2,220,436,467

Brazil (Exports) – 10th 2,562,516,295 2,840,773,794 2,577,735,120

Brazil (Imports) – 12th 3,292,396,758 3,889,357,698 4,019,572,205

Chile (Exports) – 27th 587,467,384 818,777,576 788,903,462

Chile (Imports) – 31st 1,872,339,204 1,910,900,301 1,677,144,344

Colombia (Exports) – 26th 642,275,006 760,898,384 827,017,480

Colombia (Imports) – 47th 717,265,857 799,347,127 664,348,978

Mexico (Exports) – 5th 5,008,227,557 5,476,572,667 5,370,808,088

Mexico (Imports) – 3rd 22,111,307,640 24,571,767,569 25,494,919,289

Peru (Exports) – 32nd 476,446,467 516,425,590 535,965,022

Peru (Imports) – 15th 3,619,097,966 4,402,676,766 3,683,499,916

Imports: Canadian imports from such country. Exports: Canadian exports to such country.

Catalog Sources World Development Indicators (http://data.worldbank.org/indicator.NY.GDP.MKTP.CD)


5. Brazil & Canada, Stage of Development

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6. Brazil & Canada, Most Problematic Factors for Doing Business

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7. Why Brazil?

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¬ World’s largest exporter of iron ore, ethanol, coffee, soy beans, orange juice, beef, chicken and sugar

¬ World’s largest river basis and freshwater reserves.

¬ 3rd largest aircraft manufacture

¬ 3rd largest biodiesel market

¬ 5th largest land mass

¬ 6th worldwide vehicle manufacture

¬ 7th largest economy

¬ 10th largest petroleum reserves

¬ Greatest biodiversity on the planet


8. Brazil’s Major Opportunity Sectors

¬ Higher than average growth : ¬ Transportation,

¬ Telecom,

¬ Oil and Gas; and

¬ Mining

¬ Other leading sectors for exports and investments include:

¬ Agricultural Equipment

¬ Aerospace and Aviation

¬ Information Technologies

¬ Telecommunications

¬ Electrical Power

¬ Medical Equipment

¬ Safety and Security

¬ Environmental Technologies

¬ With the World Cup 2014 and the Olympics in 2016, Brazil is spending billions in

infrastructure development with its roads, railroads, ports and airports as well as in stadiums

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9. Doing Business in Brazil, Strategy Background

¬ Immense potential as a trade and investment partner

¬ One of the most promising and exciting major developing markets

¬ In many sectors Brazil is already a well-developed market

¬ Competitors are already there and that competition is fierce

¬ Use your competitive advantages to the full

¬ Important to know which competitive advantage will be the most effective in Brazil

¬ Research the market to identify the level of demand for your product/services

¬ Decide how to address the market

¬ Your initial research should tell you:

a) what is the market for your product/service in Brazil?

b) should you be targeting particular niches or the market as whole? and

c) can you be competitive in Brazil and what is your competitive advantage?

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10. Doing Business in Brazil, Strategy

¬ Partnering with local companies

¬ M&A

¬ Joint Venture (corporate v. contractual)

¬ other type of association or commercial representation

¬ Local knowledge and experience brings advantage that you should consider

¬ Set-up a legal entity (vehicle for your investment)

¬ Type of structure (limited liability company? Corporation? Branch?)

¬ Tax (Canadian and Brazilian point of view. Regional Tax Incentives, Free Trade Zones)

¬ Labour (high cost)

¬ Regulatory (highly regulated, foreign exchange controls)

¬ Investors (where are they? Capital cost?)

¬ Corporate Social Responsibility

¬ Compliance with Brazilian legal framework (advanced planning is key)

¬ Contact the Canadian Embassy and Consulate. Canada has a strong presence

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11. Tips for Doing Business in Brazil

Brazil is not for Beginners (O Brasil não é para principiantes) - Tom Jobim

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¬ Long Term Commitment (plan, plan & plan)

¬ Personal Relationship (Relationship comes first, second & third). For friends everything... for enemis the law!

¬ Know the language & Understand the culture

¬ Being late is normal! Expect people being late (work and social) life)

¬ Don´t get right down to business. Take time to greet and say good-bye to each participant

¬ Body language! Physical contact is part of communication! Touch arms, backs is normal. Woman kiss twice (once on each cheek together with a shake of hands)

¬ Brazilians like foreigns, but be nice to them. No arrogance allowed!

¬ Be prepared to be interrupted when you are talking. It is not rude in Brazil.

¬ Verbal communication. Eye Contact. Becareful with some gestures (Ok!)

¬ Emails are not answered on the same speed as in North America

¬ Appearances count.

¬ Make sure you are dealing with decision maker


12. Other helpful survival hints

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Business

¬ Do not plan to make a business visit or schedule any appointments during holidays or festivals

¬ Make appointments 1-2 weeks in advance (not a month or two)

¬ If you meet a colleague during the weekend, make sure to greet your colleague

¬ Gifts are not important in establishing a business relationship, and people wont expect it

Social/Business

¬ Always entertain in a prestigious restaurant. Be prepared for lengthy meals

¬ Brazilians always wash their hands before eating and rarely touch food with their hands

¬ When inviting Brazilians to dinner or a party:

do not suggest that your guest bring food or drink

do not expect them to arrive on time (15 -30 minutes late).

do not indicate at what time the party will end

¬ Brazilians are extremely casual about time:

10-15 minutes late is normal

15-30 minutes is not unusual

Arrive on time for a formal meeting and prepare to wait for your Brazilian colleagues

¬ Send flowers before or after visiting someone’s home for dinner or lunch

¬ Football, family, Brazil’s beautiful beaches and the country’s rapid growth are appropriate conversations

(be careful when talking about politics and religion).


14. Government Assistance & Chambers of Commerce

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Country

Apex Brasil Brasil

Brazilian Embassy in Ottawa Canada

Brazilian Consulate and Trade Office in Toronto Canada

Brazilian Consulate in Montreal Canada

Brazilian Consulate in Vancouver Canada

Brazil-Canada Chamber of Commerce Canada

Câmara de Comércio Brasil-Canada Brazil

Canadian Embassy in Brasilia Brazil

Canadian Consulate in São Paulo Brazil

Canadian Consulate in Rio de Janeiro Brazil

Canadian Trade Office in Belo Horizonte Brazil

Canadian Trade Office in Recife Brazil

Canadian Trade Office in Porto Alegre Brazil

DFAIT offices in Quebec City & Around Canada Canada

EDC Offices in Rio de Janeiro & São Paulo Brazil

EDC Offices in Canada Canada


14. Brazil in Pictures


Thank you for your attention!

&

Enjoy your time Doing Business in Brazil.

Be ready to have a lot of fun and work hard!


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Documents

Brazil: A Promising Market - CCMM · Brazil: A Promising Market Frederico Marques PhD & LLM International Law Partner & Foreign Legal Consultant, McCarthy Tétrault Chairman, Brazil-Canada