Often we come across statements about the complex business environment in Brazil—questions about the difficulties of starting a business, the slowness of the judiciary, and the legal aspects of tax, labor, and business. Most of the time such statements have a real basis, but it is undeniable the enormous advances Brazil has made in the last 10 years.
With over 200 million inhabitants, Brazil is an incredible consumer market, with enormous natural resources and, undeniably, the economic power of Latin America. For those who wish to do global business, the Brazilian economy can never be disregarded. In 2014, Brazil was the fifth country to receive the largest volume of investments in the world, according to Unctad.
In addition to that, investments from Brazil are highlighted in many of places around the world. Brazilians are among the most important investors in the state of Florida, in Portugal there is a strong Brazilian investment, and there are many Brazilian investments around the world in areas such as China and Japan.
There are seven steps ahead for the Brazilian business environment in the next 10 years.
Tax Law
In 2007, Brazil changed one of the its federal tax systems named Simples. Nowadays 90 percent of Brazilian companies are taxed by Simples. Simples is an easy way to pay taxes, and usually it is the best tax system for Brazilian companies because the taxes are frequently lower than other systems. So Brazil made its complex tax system easier and cheaper for millions of Brazilian companies.
Tax Law
In 2016, Brazil increased the company income allowed to choose Simples within the tax law system by 33 percent. Before the income allowed was $3.6 million BRL (Brazilian income) in addition to $3.6 million BRL (foreign income). Now it is at $4.8 million BRL (Brazilian income) in addition to $4.8 million BRL (foreign income). As a result, Brazil stimulates the exportation of goods and services.
Business Law
Until 2012 there wasn’t a limited liability solo partnership in Brazil. Whoever wanted to do business alone had an unlimited liability per loss and was unsuccessful in their business, having a limited liability partnership with just two or more partners. However, in 2012, the business law was changed and created a business organization Empresa Individual de Responsabilidade Limitada (EIRELI), a limited liability solo partnership.
Electronic Judicial Procedure
Nowadays many Brazilian courts use an electronic judicial procedure, so it is possible to follow in real time any judicial procedure around the country. This is cheaper for a company to defend its interests in Brazil. We can’t forget that Brazil is a continental country.
New Process Civil Code
In 2015, Brazil actualized its Procedure Civil Code. The new code made the judicial procedure faster, cheaper, and more effective. Thus, old Brazilian problems were solved or reduced.
Outsourcing Law
In 2017, a new outsourcing law came into effect, modernizing a controversial issue of Brazilian labor legislation. It is currently allowed to outsource any activities and no longer just some activities as before.
Employment Law
In 2017, Brazil modernized its employment law and solved chronic problems. In this way, Brazil made it cheaper to hire a employee and easier to fire, too. Brazil hoped to increase the amount of investments within its companies and made its companies stronger to compete in the world market.
Of course Brazil doesn’t live in a fairytale. However, if you look to the past years, you easily recognize that important steps have been taken in the last 10 years in the Brazilain business environment. In the next year, Brazil has a presidential campaign, and the country has a big opportunity to balance its politicial environment. To be certain, Brazil has a lot of attributes to highlight as an international economy in the world.
