Foreign Investments in Brazil: Legislation, Challenges and Strong Points
Flavio Guberman is the senior partner and head of the corporate business and international law department at Carrion Advogados. In this video, he shares thoughts and advice about investments in Brazil, on topics ranging from the economic landscape and misconceptions about the tax system to real estate investments and legal structures for investments.
Flavio Guberman
Flavio discusses why Brazil is the best market in Latin America, as it offers political and economic stability, strong infrastructure, booming tourism and an incredibly diverse market. The real estate sector always raises interest, due to Brazil having one of the most proficient and flourishing agro-business sectors in the world. The tourism sector also provides an infinite range of possibilities.
“The country has adopted several measures to modernise itself and improve infrastructure, as part of its ongoing effort to strengthen its business environment.”
Misconceptions
Many obstacles are purely imaginary, and not as much of a legal challenge as one may think. Misconceptions include that Brazil has cumbersome and complex taxation, bureaucratic delays and heavy and rigid labour legislation, but investors should not be fooled by this prejudice – Brazil has a long, solid and developed business environment. The country has adopted several measures to modernise itself and improve infrastructure, as part of its ongoing effort to strengthen its business environment.
Taxation
Although it is still perceived as having a high rate, Brazil has actually decreased its rate, and many sectors are entitled to direct or indirect tax deductions. A comprehensive tax reform is under discussion, aiming to simplify the country’s current complicated tax system by adopting non-cumulative taxation and destination-based taxation, and establishing standard, reduced and zero rates. Understanding the reform and its possible consequences, as well as monitoring the next stages for approval, is essential so that companies can be prepared for the new tax environment in Brazil.
Real estate
Investing in real estate is a very interesting field in Brazil. There are practically no statutory limitations on foreigners acquiring properties in Brazil, but there are some limitations on foreigners owning land or crude land, in terms of size or vicinity. The demands on foreigners can be softened through having Brazilian partners or owning a Brazilian investment company.
“With demand on the up, property prices rising and the prospect of a favourable exchange rate, it is a good time for foreign buyers to invest in Brazil.”
Proper legal advice is essential, not only to choose the right investment, but also and mainly to determine the way the investment will flow, forms of controlling and taxation.
