Published towards the end of last year, the World Bank’s most recent ranking of the ease of doing business in 185 different countries placed Brazil in the far from unenviable position of 130th.
This statistic highlighted that starting up a business in Brazil takes 119 days, compared to the 6 days it takes in the United States.
The difficulty in obtaining credit in Brazil placed the country in 104th position in this category, whilst in relation to the registration of property it ranks 109th, and for taxes, it lies 156th.
Whilst 108 of the countries analyzed during the period covered by the study – from June 2011 to May 2012 – implemented 201 reforms to the laws relating to doing business, Brazil managed to implement just one. This concerned the use of technology for the enforcement of agreements before courts.
“Opening our company here in Brazil took around three months and meant hiring an attorney and an accountant,” says Renato Steinberg of Fashion.ME “When an investor came on board, we had to change our company from ‘limited’ to ‘corporation’. More money, more accountants, more documents, more lawyers, more bureaucracy and a lot more money.”
Such comments are heard from all quarters in Brazil, since establishing a business in this country is not an easy task. Even simple actions, such as forming a company, registering a trademark, obtaining work permits or acquiring real estate, require experience and know how. But starting a business in Brazil requires much more than these simple actions. Tax Planning, Risk Assessment and the establishment of compliance routines are equally as important.
As part of the risk assessment, it is important to understand the structure of the market which is being targeted, including the role of the government, and determine whether there is a level playing field that will allow the new business to flourish.
Felsberg e Associados’ cross-cultural understandings mean that it is uniquely structured to assist in all theses tasks. In its Brazilian and foreign offices there are many lawyers who are native speakers of English, German, French, Spanish, Italian and Mandarin. In addition, it is a full practice law firm engaging in over 40 practice areas, ranging from the usual corporate, finance, tax, labor, litigation and real estate, to very specialized areas such as infrastructure and clinical research, Joint Ventures and M&A. The firm also have a record number of successful foreign-controlled business start ups, many of which began with agency and distribution arrangements.
Foreign interest in Brazil is continuing to grow fast, and more and more interesting and innovative businesses are establishing themselves here, but experienced and confident legal advice on all aspects of the start-up process is essential.