Dear Friends,
It’s hard to believe that the city of Rio de Janeiro, with its infamous traffic and lack of public transport infrastructure, will soon be hosting millions of spectators as the 2014 World Cup and 2016 Summer Olympics lie just around the corner. Brazil certainly has a lot to prove, and the rest of the world is watching it closely.
Among its own citizens, there has been widespread public dissatisfaction with the state of affairs in Brazil, as evidenced by the public protests that flared up in June and the subsequent rapid reversal of President Dilma Rousseff’s approval rating. Criticisms include rising prices and lack of investment in education and healthcare.
The country’s economic growth rates have slowed down while inflation has risen. In a continued attempt to curb inflation, Brazil’s central bank has been raising interest rates. Brazil’s currency has also weakened, with the real now at its lowest point against the dollar since 2009.
While Rousseff has promoted economic policies to help boost growth, including a number of new tax incentives, these policies can often be difficult to navigate. Earlier this year, the World Bank rated Brazil’s tax code as the world’s most complicated.
Brazilian business owners have long bemoaned these legal complexities, but they can be an even greater challenge for foreign companies seeking to establish a foothold in the country. As a result, the grievances local business owners have had with federal policies are the very reason foreign companies are now knocking on their doors. Instead of attempting to enter the Brazilian market on their own, multinationals are increasingly seeking to partner with local players who understand the dynamics of doing business in Brazil.