What makes Brazil an attractive market for international businesses?
For our Business Talks we invite international and Brazilian specialists to talk about different topics related to Brazil, ranging from market insights, business development, HR and legal, to tax related issues.
Business Talk #1 – we talked to:
Fabian is the CEO of IL Management. Before taking the reign of the company, he had already founded a Brazilian subsidiary for a German internet technology company in 2012 and acquired valuable know-how in this complex market. As managing director of an international team, he led growth initiatives and identified strategic partners. Later, he expanded his professional experience by taking over positions in Brazilian companies from Business Development Manager to CFO.
Fabian, what makes Brazil an attractive market for international businesses?
If you are looking to expand to south America, Brazil should be the country that comes to mind. It is the 5th largest country in the world and with a population of over 200 million, the largest player in the Americas after the US, providing heaves of opportunity. After a few tough years, the economy is once again showing positive signs of growth and with the right structure, foreign companies can find a vast market with less developed competition than in comparable economies.
Which issues and challenges must businesses consider prior to establishing operations in the country?
As Tom Jobim already said; “Brazil is not for beginners”. The major challenge of any entity seeking to expand to the country is the very complex tax system. The over-bureaucratic processes along with an opaque labor law, make it recommendable to hire experts before taking action. In the end, the advantages of having a local Brazilian entity helping through the process is undeniable.
Which do you consider will be the most attractive industries in Brazil in 2020?
From the traditional industries, once more the Agrobusiness is very promising, encouraged by favorable laws. At the same time, and what may seem contradictory to the current government, I consider the Renewable Energy and Environmental Solutions sectors to be interesting. They will see growth as foreign powers are urging Brazil to invest more in these fields, and Brazilian middle-class is increasingly interested in sustainability. Speaking about online, demand for good SaaS, IaaS and PaaS solutions is growing as the online landscape is expanding. Brazil is still one of the fastest growing e-Commerce regions worldwide and already represents around 50% of e-Commerce in Latin America.
How can IL Management help these businesses to enter the Brazilian market?
To be successful in Brazil, you need to be able to focus on developing what really matters: your business. We make sure our clients can drive growth and do not run the risk of falling into one of the many hidden traps the market holds. Acting as an advisor, we actively assist our clients in all aspects of the business, from tax structuring through incorporation and issuance of electronic invoices etc. Clients can consider IL Management as a form of “complexity and risk” outsourcing company.
Fabian, thank you for the interesting conversation!