Starting a Small business in Brazil

Brazil is a country gaining forward momentum. The economy has been steadily getting better with a 0.9% growth last year following a 2.7% growth in 2011. This continued growth has been beneficial to Brazilian small businesses and it is estimated that 85% of all businesses in Brazil will now fall into the SME category; which may come as a surprise to people who associate Brazilian business with big corporations such as Petrobras or Vale.

Location, Location, Location

Sao Paulo and Rio de Janeiro are the business hubs of Brazil and they are also the most populous cities. 25-30% of Brazil’s population can be found in these cities, so if you are looking to get the most eyes on your business then Sao Paulo and Rio should be your starting points.  If you are coming to Brazil from the USA then it is worth noting that tourist visas last one year but business visas last five.

Financing

Like anywhere else, there are specific pros and cons to opening a business in Brazil and financing is one of the most glaring examples. On the con side, interest rates are quite high and paying up to 6% interest a month on short term loans is not uncommon.  On the pro side taxes are very low and dividends are tax free. Business bureaucracy can be a bit laborious too and opening a company can often take more than two months. To make the process as easy as possible I would recommend generating some local contacts who can offer advice. It would also be wise to hire a local small business accountant.

Online SME’s

Brazil should be attractive to anyone who’s business is web focused. 80 million Brazilians are connected to the internet and usage of social networks is booming. This is good news for several reasons. Firstly, PPC (pay per click) advertising is incredibly cheap in Brazil with the average CPC (cost per click) coming in at $0.18. Compare this to $0.75 in the UK or $0.59 in Canada and you can see why Brazil is a tempting foreign market. Facebook advertising can also be purchased for a few cents a click in Brazil and when you consider the level of social engagement amongst Brazil’s internet users this has the potential to be very lucrative. Another benefit of Brazil’s fondness for social networks is that the popularity of Linked In has made it an excellent way to source local talent.

Learning the Language

If you are going to do business in Brazil it is important that you learn Portuguese.  While English is widely spoken, you will need to speak Portuguese to converse with the vast majority of your clients, customers and suppliers. Perhaps more importantly, it will be seen as polite and respectful to have learned the local language and this will endear you to potential business contacts. Also, don’t assume you can “get away” with speaking Spanish, this will not be appreciated.

Brazil is a country that is crying out of for bright, educated people who want to make a success of themselves and, with the major city’s infrastructure and economic stability constantly improving, now is the time to invest.