Doing Business in Brazil and Navigating the Difficulties Therein
Succeeding at doing business in Brazil depends on patience, experience, understanding local norms, and legal expertise. As with any country, Brazil has a unique legal system that poses several unfamiliar problems for foreigners getting to know the BRIC superstar. Professional and business-savvy legal counsel with experience working with Brazilian and foreign businesses is essential for any company that wants to expedite the process, decrease the costs of doing business, and protect its interests in Brazil.
Brazilian employment law is complex, and employees are entitled to a surprising number of social benefits, similar to Europe. Brazil has numerous taxes on goods and services, making selling there very costly for the consumer. There is withholding tax on remittances from Brazil to the US, and no double tax treaty, so this must be taken into account. Those doing business there have to be careful because of a history of corruption also. Brazil is one of just a handful of countries that speak Portuguese. Yet despite the manifold problems, Brazil is a booming, exciting market, and no US company should ignore this burgeoning market.
Neff Law Firm has unique experience helping technology, internet, ecommerce and other companies do business in Brazil, and helping Brazilian companies enter the US market and/or resolve disputes with US manufacturers. Neff does deals in Portuguese as easily as in English, and has done deals opposite virtually all of the largest Brazilian companies on behalf of US clients, including Vale, Oi, Claro and many others.
Earlier in his career, he was a lawyer at Arnold & Porter in Washington, DC, working on the Latin American debt crisis of the 1980s and representing the Central Bank of Brazil (Banco Central do Brasil). Later, as Chairman of the Business Software Alliance (BSA) and then counsel to the BSA, he initiated antipiracy programs of the large computer software companies (Adobe, Autodesk, Symantec, Apple, Novell, Microsoft and others) in virtually all of Brazil’s larger cities. His firm, Neff Law Group, managed most of the Latin American antipiracy programs for these companies from the early 1990s until 2005. Consequently, Neff Law Firm is comfortable working in Portuguese, as well as English, and handles many deals in Brazil.
Recently Neff worked with the large Brazilian law firm, Barbosa, Mussnich & Aragao, on behalf of the large Brazilian amusement park Hopi Hari to license Warner Bros. and DC Comics characters. It was reported to be Warner Bros. largest deal in Latin America.
There are at least two ways that an attorney who is familiar with law and business law in Brazil can have a significant impact on doing business in Brazil. First, Brazilian state and federal laws impose regulations on most types of business activity. Whether starting a new business, investing in a local industry, creating a partnership, or trying to export and distribute a product, understanding and complying with these regulations is difficult. This is compounded by language and cultural differences. Failure to navigate these features of Brazilian business law effectively can result in costly delays at best, along with rejected applications, financial penalties for non-compliance, or worse, exposure to the legal system.
Second, the Brazilian government recognizes that its economy is enticing to foreign business interests. It wants to keep the flow of FDI, foreign expertise, and generally economically beneficial business activities going strong. The Brazilian economy is growing at a very healthy pace and the benefit to its people and standard of living has been documented extensively. As a result, there are a number of different measures in place designed to encourage foreign businesses, offering financial incentives to businesses that invest in preferred sectors or disadvantaged locations. This often requires the help of a lawyer that is familiar with them and keeps up to date with changing Brazilian laws and regulations.
And then, of course, a foreign company trying to do business in Brazil must also assure that its practices through the process of initiating the activity and afterwards also comply with its own country’s regulations and any relevant international agreements. The time necessary to develop all these expertise is expensive, but a law firm with attorneys that have broad experience doing business in Brazil as well as contacts on the ground in Brazil can offer the benefits of that experience immediately, and be a major boon to the business entering Brazil or expanding its presence.