Attractiveness for MNC in Brazil

Doing Business in Brazil

Brazil’s unique cultural heritage has been influenced by a variety of diverse populations and cultures. First inhabited by
indigenous tribes over 8,000 years ago, Brazil became a Portuguese colony in the 16 th century after it was discovered by
Europeans. In 1822 Brazil gained its independence and has since seen an exponential increase in its population as people from
around the world settled there. Traditionally a very agriculturally based economy, Brazil is known for its production of sugar,
coffee, soy beans, orange juice and beef. Brazil also has very strong service and industry sectors which have fuelled its
economy over the last century. The last decade has seen Brazil open up its economy to foreign markets and investment making
it the fifth largest economy in the world. Recognized as the largest economy in Latin America, Brazil also benefits from its
position as the gateway to the lucrative Marcos market. A strong diversified economy and unique culture make doing business in
Brazil an exciting but often challenging end eavour. Understanding Brazilian business culture and etiquette is there for essential
for successfully doing business in Brazil.

Economic overview

Characterized by large and well-developed agricultural, mining, manufacturing, and

service sectors, Brazil's economy outweighs that of all other South American countries,
and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily
improved its macroeconomic stability, building up foreign reserves, reducing its debt
profile by shifting its debt burden toward real denominated and domestically held
instruments, adhering to an inflation target, and committing to fiscal responsibility. In
2008, Brazil became a net external creditor and two ratings agencies awarded investment
grade status to its debt. After record growth in 2007 and 2008, the onset of the global
financial crisis hit Brazil in September 2008. Brazil's currency and its stock market -
Bovespa - saw large swings as foreign investors pulled resources out of Brazil. Brazil
experienced two quarters of recession, as global demand for Brazil's commodity-based
exports dwindled and external credit dried up. However, Brazil was one of the first
emerging markets to begin a recovery. Consumer and investor confidence revived and
GDP growth returned to positive in the second quarter, 2009. The Central Bank expects
growth of 5% for 2010.
Brazil - Compared to global good practice economy as well as selected economies:
Brazil's ranking in Doing Business 2011

Brazil is ranked 127 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business.

Rank Doing Business 2011

Ease of Doing Business 127

Starting a Business 128
Dealing with Construction Permits 112
Registering Property 122
Getting Credit 89
Protecting Investors 74
Paying Taxes 152
Trading Across Borders 114
Enforcing Contracts 98
Closing a Business 132

Political Structure
Brazil is a Federal Republic, comprised of the Federal District, 26 states, and over
5000 municipalities. The Federal Capital is Brasília, which is located in the Federal District.
The Brazilian legal system is based on codes and legislation enacted by the appropriate
legislative power at the federal, state and municipal levels.
The basic law of the country is the Brazilian Constitution, which establishes (i) the
system of government; (ii) the attribution of powers to the Legislative, Executive and
Judiciary branches of government; and (iii) the legislative competence of the federal, state
and municipal administrations.
Judicial Structure
The Brazilian Judiciary is organized by the Brazilian Federal Constitution, which divides the
judicial structure into federal and state courts. In general terms, the Brazilian courts have
jurisdiction over any litigation somehow connected with the Brazilian territory. The federal
courts have exclusive jurisdiction over any lawsuit where the federal government or any of
its agencies or quasi-governmental bodies is a party of or has interest in, as well as over
cases involving foreign states or international agencies. All labor and electoral courts are
also under federal jurisdiction. Nonetheless, the bulk of all private commercial litigation is
entertained before the state courts. Regardless if the lawsuit is filed either before a federal
or a state court, parties have a constitutional right to appeal to an Appellate Court. In the
state system every State has its own State Court of Appeals. The Federal Appellate
System, on the other hand, is comprised by 5 (five) Circuit Court of Appeals. In a higher
layer the judicial structure has 2 (two) superior Courts, which are called "Superior Tribunal
de Justiça" (Superior Court of Justice) and "Supremo Tribunal Federal" (Brazilian Supreme
Court), both located in Brasília, Capital of Brazil. Broadly speaking, the former has
jurisdiction over any case decided by State or Federal Court of Appeals, if the decision
rendered by any of these Courts violates any Federal Law. The latter has jurisdiction over
Constitutional issues and can also revisit decisions rendered by any Court if the Brazilian
Constitution happens to be violated. Brazil is a civil law jurisdiction and decisions are based
on the application of statutory laws. Where there is no specific statutory provision, the
courts may decide on the basis of analogy and general uses and practices, or by applying
general principles of law. In general, precedents are not binding but tend to be respected by
Lower Courts.
All rules of civil procedure are federal and applicable throughout the country, which permits
attorneys to practice all over the country. It emphasizes oral testimonies and concentrates
much of the evidence-gathering function on Judge's hands. Brazil grants more powers for
judges to control the proceedings and to obtain evidence than one normally finds in civil law
countries. Hence, discovery is not allowed and attorneys, for instance, cannot privately
collect depositions and make requests for admission and questions addressed to the
opposing party. In addition, Brazilian system permits an enormous multiplicity of appeals,
particularly interlocutory appeals that can delay proceedings for lengthy periods. Finally, all
decision are made by Judges and Jury trials are only permitted in crimes committed against
someone else's life, such as cases of murder in 1 st degree and abortion.

Social factor

Successful MNCs in Brazil

Company City/State Business Field

1 Petrobras Rio de Petroleum and
Janeiro, RJ Energy
2 BR Rio de Wholesale (fuel)
Distribuidora Janeiro, RJ
3 Telemar Rio de Telecommunications
Janeiro, RJ
4 Telefonica São Paulo, Telecommunications
SP
5 Ambev São Paulo, Beer and drinks
SP
6 Ipiranga Rio de Wholesale (Fuel)
Janeiro, RJ
7 Volkswagen São Automobiles
Bernardo,
SP
8 Shell Rio de Wholesale (Fuel)
Janeiro, RJ
9 General Motors São Automobiles
Caetano,
SP
1 Brasil Telecom Brasilia, Telecommunications
0 DF
1 Bunge Food Gaspar, SC Food and Drink
1
1 Pão de Açucar São Paulo, Retailer
2 SP
1 Vale do Rio Rio de Mining
3 Doce Janeiro, RJ
1 Carrefour São Paulo, Retailer
4 SP
1 Brasken Camaçari, Petrochemical
5 BA
1 Esso Rio de Wholesale (Fuel)
6 Janeiro, RJ
1 Texaco Rio de Wholesale (Fuel)
7 Janeiro, RJ
1 Embratel Rio de Telecommunication
8 Janeiro, RJ
1 Cargill São Paulo, Food and Drink
9 SP
2 Eletropaulo São Paulo, Utilities (Electricity)
0 SP
2 Nestle São Paulo, Food and Drink
1 SP
2 FIAT Betim, MG Automobiles
2
2 CEMIG Belo Utilities (Electricity)
3 Horizonte
2 C.S.N. Rio de Iron and Steel
4 Janeiro, RJ
2 VARIG Porto Transportation (air
5 Alegre, RS carrier)
2 Unilever São Paulo, Pharmacy and
6 SP Hygiene
2 Souza Cruz Rio de Tobacco
7 Janeiro, RJ
2 Embraer São José Airplanes
8 Campos,
SP
2 Gerdau Porto Iron and Steel
9 Alegre, RS
3 Usiminas Belo Iron and Steel
0 Horizonte,
MG
3 Itaipu Brasilia, Utilities (Electricity)
1 DF
3 REFAP Canoas, RS Petrochemical
2
3 Casas Bahia São Retailer
3 Caetano do
Sul, SP
3 AGIP São Paulo, Utilities
4 SP
3 Correios Brasília, Postal Service
5 DF
3 DaimlerChrysler São Automobiles
6 Bernardo,
SP
3 Sadia Concórdia, Food
7 SC
3 Light Rio de Utilities (Electricity)
8 Janeiro, RJ
3 Copesul Triunfo, RS Petrochemical
9
4 Ford São Automobiles
0 Bernardo,
SP
4 Vivo São Paulo, Telecommunications
1 SP
4 Furnas Rio de Utilities (Electricity)
2 Janeiro, RJ
4 Bunge São Paulo, Fertilizers
3 Fertilizers SP
4 CPFL Campinas, Utilities (Electricity)
4 SP
4 Cosipa São Paulo, Iron and Steel
5 SP
4 Nokia Manaus, Electronics
6 AM
4 Sabesp São Paulo, Utilities (Water &
7 SP Sewage)
4 Perdigão São Paulo, Food
8 SP
4 Basf São Chemicals
9 Bernardo,
SP
5 Copersucar São Paulo, Wholesale (sugar &
0 SP alcohol)