By Connection Consulting
After providing consulting for numerous business to start up in Brazil, we have learned that there are a few subjects related to bureaucracy and perceptions about Brazil that catch foreigners by surprise especially when they are planning to set up or already are in the process to open their business in the country.
Based on our experience we decided to write this guide to clarify 4 of the most usual misconceptions that people have when bringing their business to Brazil:
Salaries are Very Low in Brazil
It is easy to think of Brazil as a country with cheap workforce so this may be the most common misconception of all people planning to set up in Brazil. Just to give you an idea of the evolution of the salaries, the minimum wage increased at an astonishing pace in the past years practically doubling if compared to the figures from 2002.
Right now the minimum wage is BRL 465. It is worth to note however that the gap between different categories is huge so you will rarely find any employee with a bachelor degree in engineering that earn less than BRL 3000. Salaries vary a lot from state to state, but for experts the salary may double or even triple.
Top that with high social costs and an extra salary per year (the 13th salary) and will you have a idea of the annual cost of an employee for the company.
Companies can be Opened on a Blink of an Eye
Unlike the process in the US or in most European countries where opening a company is quick and usually require filling out a form or two, the Brazilian company formation process is far more complicated and time-consuming. Different authorities, licenses and taxes are involved depending on the type of company you are planning to open and it can take from one to six months before your company is operating.
The fact that there is foreigner presence in the company also makes the process slower and more expensive due to extra translations costs.
Rio de Janeiro is the Only City to be
Some people tend to be fooled by the status that Rio de Janeiro has as a vacation destination thinking that such status also applies for business. We are not trying to say Rio de Janeiro is not a good place to establish your business, but you should be aware that there are other places in the country with great potential and that may even offer incentives such as free plots of land for you to build your business or tax reductions.
São Paulo is still considered the business capital of Brazil and alone corresponds to 15% of the country’s GNP. Also three quarters of the all business events in Brazil happen in São Paulo. Manaus is also an interesting place for electronics manufacturing business due to its free trade zone regulations.
Get your Brazilian Documents in Brazil
Foreigners sometimes get overwhelmed by the amount of documents that are necessary to live in Brazil and the most natural perception is that it will be easier to obtain all documents once they are in Brazilian soil. That is not always true.
Some documents, for example the CPF, can also be obtained in the Brazilian Consulate so it worth to check with them if they can assist you. You are little likely to get information in English from the authorities in Brazil, so besides of having help in your own language, the Consulate is more used to handle request from foreigners.