Brazil: a Strong Foreign Investment Opportunity
Brazil is open to, and actively encourages, foreign direct investment. While Brazil is generally considered friendly to foreign investors, complex tax and regulatory requirements do exist. However, most of those challenges apply equally to foreign and domestic businesses.
According to the United Nations Conference on Trade and Development, Brazil is the fifth most attractive country for foreign direct investment for the year of 2012 through 2014. Brazil is also consistently the largest foreign direct investment recipient in Latin America, receiving close to half of all South America’s incoming investments.
Brazil’s Economic Growth Supports Foreign Investment
Brazil’s economy grew about 1% in 2012 and it is believed that growth in 2013 will rise to 3.2%. According to the United States Bureau of Economic and Business Affairs, medium and long-term prospects remain favorable for several reasons.
Currently, Brazil’s growth is supported by strong domestic demand, growing global demand for their commodity exports, a fast-growing middle class, and financial policies that support foreign investment. Additionally, Brazil is making substantial investments in its infrastructure that will support future economic growth.
Brazil Is Investing in Its Infrastructure
As Brazil continues to invest in itself, future foreign investment opportunities become more attractive. The Plano Brazil Maior (the Bigger Brazil Plan) announced in 2011 focuses on supporting domestic producers, encouraging investment, and spurring innovation. The plan sets clear goals for investment spending throughout a range of industries.
Also, the plan sets targets for making Brazil’s economy more energy-efficient, reducing the amount of petroleum consumption, and nearly tripling access to broadband internet from 13.8 million households in 2012 to 40 million households in 2014. These changes alone provide a wide range of lucrative business opportunities for foreign investors and companies.
Foreign Direct Investment by the Numbers
According to the Brazilian Central Bank’s most recent foreign-capital census in 2010, the United States had the largest share of accumulated foreign-capital stock in Brazil, with 18.0%. Spain had 14.7% while Belgium had 8.7%. Additionally, net foreign direct investment inflows between the years 2006 of 2011 amounted to about US$377 billion, after subtracting depreciation and capital repatriation.
Invest with Confidence in Brazil
As Brazil and the rest of the world rebounds from the global economic crisis, it is working hard to maintain its position as the most attractive company for foreign investment in Latin America. Be sure to keep Brazil on your short list for foreign investment and expansion opportunities.