Why to Invest in Brazil There are many reasons responsible for the growth of the Brazilian property market

today. Due to President Lula's progressive economic policies, Brazil has rapidly developed into a sound economy with a political and fiscal environment conducive to growth. Today, it offers one of the most promising investment properties across the world. Improved communication networks, and cheap direct flights from most European nations, have made Brazil one of the hotspots for not only the investors but also the tourists. The Brazilian Tourism and Culture Movement has an objective to transform Brazil into one of the 20 most attractive and splendid tourist destinations of the world. This is bound to have optimistic repercussions on the already flourishing investment growth rate in Brazil. Brazil Trading Partners: Unlike the United States, Brazil has open trade relations with all countries. Besides, the Brazilian army functions only within the country's borders and so Brazil does not have any real enemy. Thus, investors from any part of the world can expect fair treatment. Brazil is one of the major exporters of agricultural products such as sugar, soybeans, corn and cotton. Unlike the U.S., Brazil has open trade with all countries despite the punitive import taxes. China, Europe, and even the U.S. need food imports, so they all put up with the 50-150% import duties imposed when they export to Brazil. Brazils Agricultural Edge: Brazil offers attractive business opportunities in the agricultural sector. Following are the reasons that give Brazil an agricultural edge: 1. In comparison to the U.S. wherein the average monthly labor cost is $1000, Brazil offers cheap labor with labor cost of just around $450/month. 2. Brazil also has abundant land for agricultural use. Besides, the cost of these lands is much less than the cost of land in the U.S. 3. It also boasts of a perfect weather condition with year-round sunshine in the middle and Northern regions. 4. Brazil has well-developed agricultural technology from EMBRAPA, which is a partnership between the government and university, for the distribution of farming knowledge. 5. It also has a well-built transport infrastructure to facilitate the transportation of farm products. Brazils vast population: Brazil, with a population of around 180 million, has a positive population growth rate of 1.23%. Brazil has a perfect mix of older and younger generation, which adds experience and energy respectively to its workforce.

Brazilian Real Estate Market: Brazil's new property developments, due to their competitive prices and supreme quality, are attracting attention of investors from different parts of the world. The prominent changes in the rules concerning the property purchases made by the government of Brazil have further increased the clamor of assets from both foreign and local entities. Investor-friendly policies: To conduct business in Brazil, an investor needs to have approx. $85,000 on deposit in a Brazilian bank. In addition, the investor also needs to have a natural Brazilian citizen as partner. By following these simple procedures, the investor can conduct a business in the same way as a native Brazilian would. Thus, the investment criteria of Brazil is much simpler than the countries that dont allow a foreign national to start a land or open business without making a national of that country a 50% partner in the business. Due to all these reasons, Brazil can prove to be a safe investment destination for the investors.

Starting a Business in Brazil Brazil is a lucrative area for investment. It has the necessary infrastructure and talent to initiate any business. There are basically two kinds of companies that one can invest in: the Soceidade Limitada (LTDA) and Sociedade Anonima (SA). The LTDA is a very flexible model to initiate a business. These businesses are governed by the Articles of Association (Contrato Social). In this model, the entire capital of the company is split into shares. Resident Brazilians manage the company as appointed by the shareholders. The SA model is more expensive and transparent but not as flexible as LTDA. This model is regulated by Estatutos. In this model, the capital is split into classes of shares. The fiscal council and management board manage this company. Each of these committees needs to have resident Brazilians. Whatever the model one chooses for the company, to set up a company in Brazil and get it registered the following steps need to be executed: 1) The first step is to check the name of the company in the Sao Paulo state and pay the registration fees. 2) Next, one needs to register and obtain an identification number (NIRE) from the commercial board pertaining to the state. Based on the nature of the industry, the company has to register with either the Board of Trade or the Registry of Civil companies.

3) One needs to get the CNPJ number, which will register the employees with INSS (the National Institute of Social Security). In addition, registration for state tax and federal has to be done. 4) The taxpayer enrollment needs to be confirmed. Information regarding the company needs to be entered for this, and the legal representative has to confirm the same through the Office of Federal Revenue. If the company deals with sales or purchases, registration with state authority is also required. 5) Printing invoices and receipts needs authorization from Secretaria da Fazenda Estadual. Get the same by filling the AIDF form. 6) Registration with the Registry of Municipal Taxpayers needs to be done. For this, the CCM enrollment form needs to be submitted. 7) The TFE tax also needs to be paid to the Municipal Taxpayers Registry. This tax pertains to the operation permit and is dependant on the corporate purpose of the company. 8) After all this, one needs to apply for an operations permit from the municipality. A 30-day gap is provided to fill out these forms after registration with the Secretaria de Finanas e Desenvolvimento Econmico. This license is essential for any operations to initiate. But since this is a long process, municipalities allow initiation if the TFE is paid. 9) Employees need to be registered in the social integration program by setting up a fund for unemployment (FGTS) in any bank. Next step is to register with the employees union and notify the labor ministry. This is the basic procedure for setting up your business in Brazil. Once set up, you can reap the multiple benefits of investing in Brazil.

Competitive Advantages of Investing in Brazil Brazil, the largest country in South America, is the only Portuguese-speaking country on the continent. Originally a colony of Portugal, Brazil today is a Federal Republic. The country is best known for its Carnival festival, its diverse wildlife, natural environments and its soccer team. Today, as per 2008 findings, Brazil is the world's 8th largest economy in terms of its GDP. Brazil is also the 9th largest country in terms of purchasing power of its nationals. Thus, the country holds great potential for foreign investments. The Brazilian economy is one of the fast growing economies in South America. It is also one of the economies that attract huge foreign direct investments. Investors investing in Brazil stand a great chance to gain significant returns due to the following advantageous reasons:

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Brazil is the fifth largest country in the world, thus it provides a great customer base. The country has very pleasant geographical conditions. It has very conducive weather between 25-30 degrees Celsius. Brazil has a very good political setup. It is a democratic country and has a stable political system. It has a very stable currency. Investors investing in Brazil not only would see tremendous gain, but can also consider becoming a Brazilian resident as the cost of living is about 20-25% less than in any European country. The country has a very peaceful and calm environment throughout. The locals are very hospitable, and very receptive and appreciative towards immigrants and their beliefs. The government of Brazil encourages foreign investment in the country in its diverse sectors. The government provides several incentives to the investors and allows the investors to have 100% ownership of land and property. Brazil has trade relationships with more than 100 foreign countries. The country has a very conducive natural setup. Brazil is always a low-risk country with regards to any natural catastrophe such as an earthquake, tsunami, volcano or hurricane. Brazil is one of the leading exporting countries in the world. It ranks among the top 20 exporting countries in the world. Brazil is naturally endowed with great biological diversity. The country is home to the Amazon rainforest, spread over 3.6 million kilometers. The forest is filled with abundant natural resources. One of the prime reasons why investors investing in the country would gain beneficial returns on their investment is that the Brazilian government makes a conspicuous attempt to develop the countrys scientific and technological infrastructure along with development in various industries to lure more foreign investment. Businessmen involved in heavy industries investment would particularly be benefitted to a large extent as Brazil is a country that develops submarines and aircraft, and promotes research in aerospace. Brazil is the fourth largest commercial aircraft manufacturing country in the world. It thus holds huge investment opportunities in the sector. Brazil is a very popular tourist destination among people the world over. It attracts about 6 million foreign tourists every year. Thus the tourism sector promises great investment opportunities.

The country has excellent infrastructural facilities. It has an excellent transportation facility throughout the country. It has well-connected roads, rail and airways. With these advantages, the investors would be in a win-win situation. The geographic conditions, the government initiative - all these factors make Brazil a heaven for investors to invest in.

In a bid to attract FDI in the tourism industry, the Brazilian government had announced it would exempt projects in the tourism sector from the recently passed three year lock-in clause. The exemption is expected to enhance foreign investment in the Brazilian hospitality sector and spur opportunities and growth. The three year lock-in clause is aimed at governing real estate activities in the countries. Consequently, the government expects that the move will see an increase in the number of hotel rooms, and as well enable domestic realty majors to introduce foreign partners in their projects. Companies such as Unitech and DLF that have major hotel and tourism investment projects in the pipeline are looking to increase liquidity through the use of foreign funds. As it stands, Brazilian foreign direct investment norms restrict foreign investors from shipping profits back to their home countries for a period of three years for investments made in real estate projects, that includes hotels and tourism related ventures. Sources confirmed that, for a company to benefit from the relaxed FDI norms in the hospitality sector, foreign direct investment projects are expected to meet a minimum 50% of built up space for hotel and tourism activities, that must include beach resorts, restaurants and tourist complexes, and an additional minimum of 20% for the development of hotel rooms. Generally though, firms that incorporate hotel projects in their real estate projects also stand to gain from the governments announcement.

Insufficient infrastructure has been major obstacle for economic growth in Brazil. In addition, Brazil is the host for 2014 Football World Cup and 2016 Olympic games. Hence, there is a significant challenge for the government to improve infrastructure to support the inflow of visitors that will be attracted by these events. This requires extensive investment in the tourism sector, sporting facilities and urban areas of Brazil. Due to these reasons many of the world's leading investment funds and financial institutions are preparing themselves to benefit from financing opportunities available in infrastructure development. Brazil is one of the largest

recipients of FDI in infrastructure, and it still has a lot potential for foreign investment in this sector. Foreign investment in Infrastructure Urban development of Slums: This project comes under urban development, and the participants are the Federal Government/Rio de Janeiro State and municipal governments. The regions where this project will be executed are Rio de Janeiro, Niterol, Sao Goncalo and the Lowlands. The development project includes removal of shanty towns from areas of risks and river banks, and also to improve the supply of water in Baixada Fluminense, Sao Goncalo, and Niterol and Itaboral regions. It also includes installation of sewage systems and clean-up of Guanabara and Sepetiba Bays. The construction of housing in Rio de Janeiro and the Baixada region is also enlisted on the list of planned work. The develop project of urban regions focuses on construction of slopes to avoid flooding in the Lowlands. The total estimate cost of this project is US $1.8 billion and the opportunity available for private investors is through procurement. The Brazilian government has announced some ambitious plans for development of infrastructure. The spending on infrastructure will rise from 504bn reals ($289bn) to 646bn reals ($370.7bn) under the state, PAC and private spending. This move has been proposed to cover the economic damage caused due to financial crisis. The Brazilian Government believes infrastructure remains the key for development of other sectors and stimulates foreign direct investment in country. The World cup alone represents an investment potential of 10-30 billion pounds. Foreign investors continue to make returns by investing in infrastructure projects in Brazil.