Brazil

Investing

FDI in figures

With 18 billion USD of foreign direct investment in 2006, and almost 29 billion USD in 2007, Brazil is not only a great receiver of FDI, but also the 4th international investor among the emerging countries, and the 1st in Latin America. 2007 proved the attractiveness of Brazil on the international economic scene with an inflow of FDI of 33 billion USD.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	18,146	15,066	18,782
FDI inward stock (millions USD)	n.c.	n.c.	221,914.0
Performance Index*, world ranking	74	85	93
Potential Index**, world ranking	72	70	n.c.
Number of Greenfield investments	259	169	145
FDI inwards (in % of GFCF)	16.0	10.7	10.5
FDI stock (in % of GDP)	n.c.	n.c.	20.8

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Brazil

Strong points: Brazil has very large resources of raw materials, an extensive reserve of manpower at all levels of education, with Universities that perform just as well as their counterparts in the OECD. Many sectors, agri-foods, offer good business opportunities. Its economy is diversified and more and more manufactured goods are produced and exported. The potential of the Brazilian domestic market as well as the low cost of labor are elements which may attract foreign investors.
Weak points: In spite of opening up to world trade, the many administrative barriers are harmful to international trade. The increase in value of the real against the dollar mechanically reduces the country's competitiveness in some sectors faced with Asian competitors. The Labor Code is very onerous, implying substantial costs for foreign companies and keeping a considerable part of national activity in the informal sector.
Government measures to motivate or restrict FDI: The Brazilian government encourages and favors FDI: most barriers to the activity of foreign investors have been abolished, in particular on the stock market. A very large number of public companies have been privatized and many sectors deregulated over the last 15 years.
Bilateral investment conventions signed by Brazil: Brazil has signed bilateral agreements for the protection of foreign investment with 14 countries, but 7 of them have not been ratified by the Congress.
To see the list of countries, click here.
To see the conventions, click here.

Administrative procedures relative to foreign investment

Freedom of establishment: Guaranteed.
Acquisition of holdings: The investment regime in Brazil is a liberal regime which allows foreign investors to have a majority share in the creation of their company.
Obligation to declare: The agency for the promotion of foreign investment in the country gives information about the authorizations necessary for setting up. All inflows of capital must be declared to the Central Bank.
Competent organization for the declaration: Central Bank of Brazil
Requests for specific authorizations: Foreign investment is restricted and requires special authorization in the nuclear, health, land ownership, fishing, post office, telegraphs, aviation, aeronautics and media sectors.