Doing Business in Brazil
If you are traveling to Brazil for business, it is imperative that you understand the business culture and business climate of the country.
Essential information for anyone wanting to do business in Brazil, here we discuss the main points you should keep in mind when coming to the biggest country in South America for business or negotiations. Remember, just as Brazil has differences with the USA or Europe, there are regional differences within the country. Be sure to inform yourself accordingly. On this page you will find pieces of key information such as how economics and politics affect business in Brazil, the day to day business culture and how Brazilian companies tend to work.
Navigating the field of Brazilian business
It is no secret that Brazil is an attractive prospect for doing international business. The sixth largest country in the world by population and a growing middle class represent a huge domestic market, whilst its natural resources and cheap exports make it a top destination for business partnership opportunities. As with any cross – border business venture, unique differences in culture and the business landscape make a good understanding of your destination vital. The first step in learning how to navigate the field of Brazilian business is getting a firm idea on how the field looks! A good understanding of the political and economic environment is vital. Furthermore, if you are familiar with common practices and the business culture of the country before you arrive, this will prove invaluable.
Here we offer some essential information about doing business in Brazil. Our agency is made up of Brazilians and non – Brazilians so we know full well the advantages and challenges of participating in a multi – national environment and the pro´s and con´s of doing business in Brazil. Use these guidelines as an introduction and get to know what you can expect when coming to South America´s biggest country to do business.
Background Information – Brazil as a business destination
The total population of Brazil in 2019 stood at 211,049,527. The country consists of 26 states and the Federal District. São Paulo is the largest city, housing over 11 million residents. It is also the financial and business center and home to the headquarters of multinational corporations such as Google, General Motors, Unilever and Nestlé. You can expect to have a minimum of contact with São Paulo when doing business in Brazil.
The capital city and the seat of the Brazilian government is Brasília. Do not make the common mistake of thinking the capital of Brazil is Rio de Janeiro, it was, between 1763 and 1960. This is a sure fire way to show that you have not done your homework and may be frowned upon by potential business partners, employees and colleagues. One of the keys to unlocking Brazil´s business potential is building close business relationships, a good knowledge of Brazilian culture and Brazilian business etiquette will help you here.
Politics and Economics in Brazil
Politics and Business
Brazil forms part of the United Nations, G20, BRICS and Mercosul. Politics still plays a large role in Brazilian business and the president of the country holds considerable power.
Serving as commander in chief of the armed forces, they can veto bills, declare war and abolish government positions. The president at the time of writing is Jair Bolsonaro of the Social Liberal Party. In recent years, the presidency of Brazil has been an unstable position and holders of the title have been constantly accused of corruption. Operation “Lava Jato” led to the impeachment of Brazilian ex –president Dilma Rousseff and the arrest of ex – president Luís Inácio “Lula” da Silva.
In business, you should try to avoid politics as a topic of conversation, especially in the early stages of building a relationship. It can be a source of conflict among Brazilians and much of the population has been divided in recent years over the country´s unstable political scene.
Brazil hosted the FIFA World Cup in 2014 and the Olympic Games in 2016, both thought to be precursors to a flourishing economic era in the country, but so far, improvement has been slow.
Although Brazilian infrastructure is the most advanced in South – America, hyperinflation and corruption has hindered its development throughout history. The currency used in Brazil is the Brazilian Real (plural reais) and is 3.78 to the US dollar. Although an attractive investment possibility because of such things as its market size and mineral wealth, doing business in Brazil involves extra costs in terms of time and money. Inflation, political and economic instability, corruption and extreme bureaucracy are significant causes of this. This very real and tangible extra cost is known among locals as “Custo Brasil” or “Brazil Cost.” To better circumnavigate these barriers, it is important to work at least in part with local professionals – Brazilian lawyers and accountants have become accustomed to dealing with these challenges and will prove a great aid to you when conducting your business here.
Brazilian Companies – Management and Hierarchy
When doing business in Brazil, you should be aware of how other companies operate and how workers coming to work in your company may expect yours to operate as well. Companies in Brazil have quite a strict hierarchical structure and you will see instructions and a chain of command that reflect this. Key decisions are made at the higher levels of the organization amongst senior members of staff. Again, relationships are key within companies so it is common to see allegiances and group dynamics that do not reflect the official structure of the company. You should be aware of this and take the time to build relationships with those you need to.
Instruction from management is often taken quite literally so if you are in a position to give instruction make sure it is clear and you outline exactly what you want done. Taking initiative can be seen as overstepping ones role, so do not be surprised If you notice a lack of initiative compared to Western companies. Take this as a sign of respect to who is in charge.
In terms of teamwork, Brazilians (like anyone) will work better together if they have a good relationship with each other. Take the time to build your team and make sure each member is aware of the strengths of each other member. Make sure everyone is aware of their role within the team and as team leader be ready to receive problems you may see as small. Again, this is reflective of the decision – making role of the team leader. In short, workers expect managers to manage.
Business Culture in Brazil
Meeting, Greeting and Behaviour
Brazil is generally is a place where meeting at an agreed time does not always go to plan! Doing business in Brazil is no exception. Being as many as 15 minutes late is quite common and should be seen as normal – plan accordingly.
On arrival, it is common for men to shake hands with men and a kiss on each cheek for women. Some women may also prefer to shake hands with men; usually in this case they will extend their hand first. Women will either offer their hand or a kiss on each cheek to other women. It is good manners to greet and say goodbye to everyone present when arriving and leaving.
Furthermore, meetings in Brazil may have an agenda but discussion may veer off. Do not be seen to be trying to steer the discussion too much, let it take its natural course. Business cards are usually exchanged during small – talk before the meeting and this is a great time to build relationships with your colleagues, do not try to hurry this part of the meeting. Be careful giving gifts in Brazil, if giving an expensive gift it could be considered a bribe so it may be better to exchange gifts in a social rather than a business setting. Using titles such as “Doctor” or “Professor” is quite common in Brazil and is seen as showing respect. You may notice that Brazilians use a considerable amount of body language when speaking and close contact is not considered invasive. The official language of Brazil is Portuguese, taking the time to learn some will bring you a long way, try to avoid “getting by” with Spanish.
Dresscode and Presentation
Brazilian people generally place a lot of importance on personal hygiene, showering several times daily because of the warm climate.
When it comes to doing business in Brazil, men normally wear suits. Three-piece suits are worn on more formal occasions or by company executives. Women will wear suits or elegant dresses. Brazilians will see expensive watches, luxurious hotels and expensive cars as indicators of status. However, people do not generally appreciate boasting and see humility as a positive trait. Always appear neat and tidy in business environments, especially when meeting new people.
Doing Business in Brazil Summarized
Remember that personal relationships are key to successfully doing business in Brazil. Take the time to build and maintain your relationships and make them successful. Learn when it is appropriate to discuss business, especially during social meetings. Dress appropriately for the occassion and try to learn Portuguese! If entering a management position in a Brazilian company, become familiar with hierarchy, roles and group dynamics as they may be different from what you are accustomed to.
The Brazilians are happy people, show that you enjoy working in their country, enjoy life and smile!