The following is a post to from Patrick Mackaronis. Patrick is the Director of Business Development for New York City-based social network Brabble. In this post , Patrick speaks about the Brazilian growth story.Patrick can be best reached on Twitter at @patty__mack.
180 million people unshackled from the grinding poverty of the 1980’s makes a tempting target for businesses interested in benefiting from Brazil’s continuing growth story. Exports of agricultural products including sugar, cotton, and soybeans grown in sprawling 10,000+ acre farms brings new wealth into the center of Brazil’s vast landmass. Manufacturing plants from multi-national auto companies, plus homegrown aircraft manufacturer Embraer, and financial companies in the major city of Sao Paolo fuel Brazil’s growing desire for capitalism’s bounty.
Brazil Business Market Growth Opportunities for Small Companies
Small businesses seeking a foothold in Brazil’s economic success can either supply goods and commodities to Brazil, or set up business in Brazil. Either way, get ready for a challenging and expensive bureaucratic entry process for working with Brazil in trade or forming a business in Brazil. With potential growth rates of 4%+ per year for many years to come- more than double what is likely in the Western economies- battling Brazil’s bureaucracy can be profitable, even while being frustrating.
5 Tips for Succeeding in Business in Brazil
- Focus first on developing a relationship with a native Brazilian that can become a business partnership. Brazil requires each foreigner, known as an “estrangeiro,” to form a partnership with a Brasiliero, or native Brazilian. This partnership can be as little as 1% for the Brazilian, but it needs to be documented and notarized in Brazil. With the formal social contract for developing a business between the small business estrangeiro and the native Brazilian formed and signed with a notary approval in Brazil, it will be possible to create a business account at a bank in Brazil. Otherwise, opening a bank account is practically impossible and the small business person wanting to trade or open accounts in Brazil is shut out.
- Get a Brazilian C.P.F. number. This C.P.F. number is like a social security number in the U.S., but Brazilian’s use it for almost everything. Without the C.P.F. number, there is no way to get cell phones, or open bank accounts, or do much business.
- Focus on relationships and social contacts. Everything happens in Brazil among friends and family. More than in the U.S., friendships grease the wheels of business success in Brazil. Gifts, meals, drinking together, getting to know each other well, all brings business to a more personal level. Then business and trade in Brazil will happen more quickly and with less hassle and possibly even less dishonesty.
- Choose a native Brazilian name for the business or even for the trading company. By selecting a native sounding name, including spelling the “Brasil” with an S like native Brazilian’s do, future business contacts may keep prices the same as for doing business with natives, as opposed to the much higher “estrangeiro” price. This tip could save many thousands of dollars or Reais!
- Sell everything based on payments. Brazil is swept up in the credit scam from international bankers. Even tennis shoes are bought on monthly payment plans. Despite any moral disagreements with this that one might have, by playing by Brazil’s small business rules of offering credit, a new business in Brazil can get customers much faster.
These five tips for succeeding in business in Brazil will pave the way for a smooth entry and profitable growth with the dynamic economy. Beyond the profits, doing business in Brazil and with Brazilians is a joyous, beautiful and worthy adventure that will pay dividends now and in the bright future.