I received some sage input from a local yesterday. It seems THEY consider Brazil a third world country. Even though its economy is a powerhouse, it still moves at the pace of a country that is ruled by high taxation and bureaucrats. My contact says that the taxes are so high, that as in most of the Third world, a black market is thriving. It is fed by a tax law that is draconian, and tax inspectors that can easily be bribed.
For this reason, he says, if you want to do business in Brazil, you must have local representation, a company or person who knows the local laws, the ins and outs of the infrastructure, and how to navigate it.
This also means that you can’t expect to sell things here at the same price one sells them, say in the states. Not only is there an extremely high import duty, but sales are taxed at every turn. These costs add significantly to the price. However, if you manufacture (read that assemble) your product here, you can maneuver around a lot of the costs. Hmmmmm
Business is done at a different pace, too. Its slower, methodical, and relies on relationships as well as common business practice. He gave me some examples, but suffice it to say its much like this Yankee attempting to do business in Louisiana or Texas. You can, but its much easier having someone local who knows the customs and the ropes.
Brazil is the economic engine of Latin America. But it doesn’t seem to have a direction or a plan. It relies on the government for that and it changes as new opportunities occur. Rather than let the free market pick the direction of the country, the government does. First its diamond mines, then gold, then coal, then biofuels, and now offshore oil.
There is a lot of money to be made in Brazil. But tread carefully, they see themselves not a part of the lion (the US) nor as a part of the Jaguar (Chile, who they feel is becoming like the US) but as the head of a "rat."
You can put any spin on that you like.
JVH
