Business urged to think ahead before embarking on trade with Brazilian firms

06:30 12 June 2014

Richard Proctor, Tax Partner at Grant Thornton in  Norwich

Richard Proctor, Tax Partner at Grant Thornton in Norwich


Businesses looking to trade with firms in Brazil are being urged to make sure they have done their homework before embarking on any ventures.

With the World Cup kicking off next week, closely followed by the 2016 Olympics, the world’s attention will be focused on Brazil as never before, representing a major opportunity for the region’s businesses to gain a slice of the action.

As one of the so-called ‘BRIC’ nations, Brazil has in recent years taken its place at the top table of global economic powers, with a booming manufacturing and services economy driven by demand from a fast-expanding middle class.

However, Tax partner at Grant Thornton’s Norwich office, Richard Proctor, said that before businesses begin to explore opportunities in Latin America’s biggest nation, they need to make sure they are fully prepared.

In particular Brazil has a highly complex tax system which in a recent study by the World Bank was ranked among the worst countries in the world for managing the compliance burden with some 50 potential taxes to deal with.

He said: “To some, Brazil’s complicated and burdensome taxes do fly in the face of its claim to be ‘open for business,’ and taxes on imports, whether goods or services, are particularly high.

“The other major headache is the high level of red tape and bureaucracy in Brazil. For example, you will often need to obtain import licences and many registrations, particularly in an industry such as pharmaceuticals. In this scenario it is often more advantageous to set up an operation on the ground, or to outsource production, as this may significantly reduce the tax and red tape burden.”

A further issue is that Brazil is such a vast and diverse area of 3.3 million square miles and 200 million inhabitants. Doing business in the south east of the country, particularly Sao Paulo state, the country’s economic engine with 40 million inhabitants, is vastly different from operating in the less developed areas of the north and north east.

He added: “Above all, the key lesson for any UK entity thinking of doing business in Brazil is preparation. Ensure you have a sound financial and tax model in place and get reputable legal support. Research the market thoroughly and explore opportunities with local partners, including joint ventures, which are commonplace.

“Language can also be an issue so it is advisable to have a translator on hand who speaks fluent Portuguese, since English is not widely spoken in Brazil unless you are dealing with top executives.

“Finally, be aware of Brazil’s regional differences. While it may be easier on the surface to do business in the more developed parts of the country, less developed states and cities will have lower levels of local taxes and may even offer tax incentives, while competition from rival businesses may be less severe.”

1 comment

  • Is this news or an advert for Grant Thornton?

    Report this comment


    Thursday, June 12, 2014

The views expressed in the above comments do not necessarily reflect the views of this site


Show Job Lists


Employers in East Anglia are paying staff more and looking at benefits packages in a bid to attract and retain staff.
Photo credit: Philip Toscano/PA Wire

If you excel at your job then now might be the time to speak to your boss about a pay rise or equally look for an upgrade in your benefits package.

                                 Managing Director of Bakers and Larners of Holt, Michael Baker, pictured at the Holt department store.


Family businesses are the lifeblood of the economy, but can often be weighed down by tradition. Now a report seeks to champion the region’s oldest family firms. Business writer SABAH MEDDINGS reports.

Green 100


Enjoy the Green 100
digital edition


Mustard TV

Meet the Team

Mark Shields

Business Editor


Chris Hill

Agricultural and Farming Editor


Shaun Lowthorpe

Business Publishing Editor


Sabah Meddings

Business Writer


Kate Royall

Business Writer


Duncan Abel

Business Development Manager

Business Most Read


Norfolk Future 50 EDP Business Awards Green 100

Business Most Commented

Newsletter Sign Up