Are you looking into investing in Brazil? The biggest economy in Latin America has positive outlooks and economical forecasts for investments, which means being full of opportunity to foreign companies. Brazilians are welcoming when it comes to foreign investments, as many different sizes of businesses have already noticed. With decreasing bureaucracy levels, government incentives and niche markets on the rise, multiple kinds of companies can find a fertile ground in Brazil. However, starting to do business in another country requires proper planning and strategy. This means understanding Brazil’s particularities and having the right amount of flexibility to take advantage of all opportunities. In this article, you will learn everything you need about investing your business in Brazil, the main reasons to do so and the most important contexts related to it. Check it all out below. What do the numbers say about investing in Brazil? If you are looking into investing in the Brazilian market in 2022, the first step you should take is to consider the country’s most important economical numbers. They will help you understand the context the region is in, as well as set your expectations accordingly when it comes to your business projections. Below, you can see the most up-to-date information regarding Brazil’s economy with the appropriate context to invest in the country. Check it out! Largest economy in Latam Brazil sits at the top of the ranking as the largest economy in South America and Latin America as a whole. As a matter of fact, Brazil, Argentina, Chile, Colombia, and Peru, add up to 90% of the entire South American economy. Additionally, Brazil is within the top ten world GDP ranking. It ranks above countries like Russia, South Korea, Australia, Spain and Mexico. GDP projections According to the latest data, Brazil’s GDP is at US$ 1608.98 billion. By the end of 2022, the projections indicate it might reach US$ 1750.00 billion, with it growing even more in 2023 to reach US$ 1890.00 billion. This scenario is predicted by Trading Economics global macro models and market analysts. This shows how the country’s economy is recovering despite the adverse effects from the economical crises from the latest years. Cross border e-commerce With technological progress came new ways to do business, and this applies to Brazil as well. Around 47% of Brazilians have the habit of making international purchases online, according to data from 2018. With the COVID-19 pandemic, that number skyrocketed to 91%. In 2021, online sales grew 72% when compared to the previous year. Results now include food delivery and online grocery shopping as the most requested services by Brazilians. Foreign Direct Investments (FDI) The Foreign Direct Investments metric comprises a matrix company and a foreign branch, which together form a multinational company. To be considered as IED, the investment must give the matrix control over its branch. Between 1995 and 2022, Brazil’s Foreign Direct Investments (FDI) averaged at US$ 3871.30. As of 2022, it records an increase of US$ 4483.49 according to the country’s Central Bank. Additionally, it is expected to grow to around US$ 4000.00 in 2023 based on Trading Economics global macro models and analysts. What main events affect Brazil’s economy? Like with any other country, Brazil’s economy is directly affected by current events. Some certainly have a bigger impact than others, while certain particularities in Brazilian culture make a difference when it comes to its economical numbers. If you wish to do business in Brazil, you can learn a lot about it by seeing how the country responds to certain events. Below, we highlight the most important global events that affect Brazil’s economy. The general elections Brazil’s economy is directly affected by the government. The federal government had a historical protectionism stance, which changed in recent years with the country’s focus on being a pro-business country. Additionally, specifically during elections, consumer goods related to politics tend to become highly popular. Voters decide to promote their candidates with various items and objects, and this is reflected on the economy. In 2022, Brazilian voters will go to the polls to elect several members of the government. The current president is up for reelection, with old and new players as competitors. Additionally, the population will also vote for congressmen, senators and governors. All of those choices might affect how the country deals with its economy, including foreign investment. In other words, if you wish to work with Brazil, you will need to keep a close eye on its elections. The FIFA World Cup Brazil is a five-time FIFA World Cup winner, the top winner in the world. Soccer is a big deal in Brazil, with its domestic and international competitions always being relevant in Brazilians’ daily lives. For example, in Brazil, there is a specific increase in demand for TVs, smartphones, sportswear and other kinds of electronics during the World Cup. Plenty of stores create special sales related to it, which positively affects the local economy. Therefore, it is no wonder that the World Cup directly affects the local economy. Businesses looking into investing in Brazil need to take this into account, especially since the 2022 World Cup is near. The Pix innovation The Brazilian Central Bank developed a new payments system that is open for any person and institution to use: Pix. With it, money transfers are instant and intuitive, as they simply require reading a QR Code. The success of Pix was tremendous: it quickly reached 100 million users in its launch year. Additionally, over half of Brazilians made online payments using Pix, choosing it over traditional means like credit and debit cards. Any business interested in investing in Brazil — or any country — needs to consider the customer’s purchasing habits. With Pix’s popularity, it is unthinkable for a new company to not support it as a payment method for goods and services. Given how easy it is to use Pix, most businesses are able to reach customers who wouldn’t feel secure buying online in the past. The COVID-19 pandemic The
