Brazil’s population exceeds 200 million people, it is home to one of the world’s largest banks and a steadily growing GDP. In fact, Brazil’s GDP per capita outstrips many other countries – including Canada, Russia, and Australia – and the South American titan currently ranks number nine in the top ten economies. In this blog, we focus on why Brazil is one to watch.
Why export to Brazil?
The UK and Brazil have a robust economic relationship, which supports the growth of over 800 British companies operating within its boundaries. Overall trade between the UK and Brazil stood at £6 billion in 2020, with no signs of deceleration.
Many large brands have already discovered the opportunity available in Brazil. Microsoft has made a space for itself in the Brazilian technology market; US-based aluminium rolling and recycling company, Novelis, has expanded significantly; and Fortune 500 financial services tech company, FIS, has deliberately severed ties with Brazil-based Banco Bradesco to allow it to work with other Brazilian banks. Strong precedents together with incentives, including proposed tariff reductions for certain imported products and a declining unemployment rate, seem to spell success for businesses looking to export to Brazil.
Companies trading (and not trading) in Brazil
In an expanding market there is disappointment. Encouraging results have been achieved by corporations such as Amazon, Rolls Royce, Shell and Experian. However, TGI Fridays have withdrawn from the Brazilian market and Ford have ended decades of trading, leading to the loss of around 5,000 jobs.
Legal considerations
Brazil has a complex system of regulation for imports. Multiple government agencies are involved in the control, labelling, packaging and quality/safety requirements for imported products.
As a Brazilian importer you will need to request an Import License (LI) from Integrated Foreign Trade System, then once goods arrive in Brazil the importer must prepare the Import Declaration (DI). All documents including the Import Declaration and an ICMS payment receipt (or waiver) must be presented to the Secretariat of Federal revenue (SRF). Only once these steps are completed can the product be legally traded in Brazil.
Challenges in exporting to Brazil
The European Union has been working on strengthening ties with Brazil for the past decade, with Brazilian president Lula da Silva remarking that, “the EU is a major trade partner and an important global player.” However, the UK then voted for Brexit. Did this spell the end of a glorious relationship? Perhaps not. A bilateral post-trade deal may well be on the cards, meaning the future looks brighter for Brazil/UK trade relations.
“We should explore the possibility of negotiating a trade agreement,” said Roberto Fendt, Secretary of Trade and internal affairs at Brazil’s Economy Ministry, following a virtual meeting with British Trade Minister, Liz Truss. The meeting highlighted a number of good things to come. With trade between the UK and Brazil amounting to $5.3 billion in 2019, there are strong reasons to avoid such an incredible relationship turning stale.
Energy Technology and Control experience
Despite a number of challenges, it is clear that, overall, Brazil is an attractive investment target. The combination of strong e-commerce markets, agricultural goods, a friendly business environment and evolving banking system solutions makes it a robust location for business.
As a business with experience on the Global stage Energy Technology and Control are experienced working with customs departments around the world. The paperwork required by Brazilian customs departments isn’t a problem for us. We have spent 30 years working with customers around the globe and as such we understand the processes and procedures and strive to deliver a smooth and efficient customs experience.
Speak to a member of our team about how Energy Technology and Control products can help your company succeed on the Global stage.