Brazil Is Open for Business — Are You?

Brazil Is Open for Business

After years of sub-par growth, Brazil is about to boom. Even in the middle of a pandemic, major international banks are predicting growth upwards of four per cent. But why has it taken until now for the country to realise its potential?

The last couple of years have been marked by new regulatory changes designed to incentivise economic growth and inward investment, coupled with far-reaching reforms in Brazil’s banking sector. This has supported the rise of a new generation of banks and fintechs exemplified by Nubank, the startup which recently announced a $500m investment from Warren Buffett’s Berkshire Hathaway.

The liberalisation of Brazil’s banking sector was long overdue, removing one of the biggest obstacles to overseas trade. Just a few years ago, a combination of taxes, complex bureaucracy, and high currency conversion fees made Brazil an unattractive market where businesses could expect to lose 20 to 30% of their in-country revenues to fees and red tape, effectively eliminating their margins.

Thanks to the new reforms, Brazil has a new breed of bank that is finally able to plug the country into the international economy, including integration with platforms like the RippleNet that enable fast, reliable and affordable cross-border digital payments. MoneyNetInt’s new partnership with Banco Rendimento would have been unthinkable only a few years ago; now it enables any company to make payments to Brazil-based businesses or individuals for a fraction of what it cost before.

Brazil’s developing financial infrastructure sends a clear message that the country is open for business. Now, any business can compete for raw materials, produce, manufactured components or any other export. Meanwhile, service providers which need to send money to customers, like the Israel-based Cashback startup, can easily target Brazil’s burgeoning middle class.

This is Brazil’s moment, but it won’t last forever: as the global economy recovers, more and more businesses will identify the growth opportunities of expanding into Brazil. To beat the competition, enterprises need to move quickly and harness the resources that enable them to start doing business in Brazil.

Tapping Into Emerging Markets

Even the world’s biggest businesses can baulk at opening new overseas markets. Managing logistics, finding local sales reps, translating website and marketing materials into new languages, setting up local bank accounts and managing international payments: these are time-consuming and risky at the best of times. Throw Covid into the mix, and you can see why so many enterprises remain fearful of expansion.

In reality, the pandemic presents a unique opportunity – and not just because bold businesses will be first to tap into Brazil. Just as important, the pandemic has forced service providers and freelancers to adapt as business has dried up. In Brazil (and other countries), there is a huge pool of untapped talent just waiting to help overseas partners set up shop in a new country.

For example, it’s simple and affordable to find local talent who won’t just translate your website and other content, but can provide consultancy based on a thorough understanding of the local market and culture. Using local marketers can also open the door to influencers who will drive traffic to your site and expand your reach in local online forums unknown to foreigners.

Likewise, managing cross-border payments was once an insurmountable obstacle for smaller businesses. Thanks to the reforms outlined above, it’s never been easier for any business to partner with an international payment provider that has a relationship with local banks, making it easy and affordable to send any amount to local employees, vendors, partners and suppliers in their local currency. Ideally, your payments partner will provide an online e-wallet that enables you to seamlessly exchange funds from one currency to the other without charging exorbitant exchange rates.

Thanks to services like these, enterprises can establish an overseas presence and start tapping into new markets quickly and without the costly overheads that once made international trade a pipedream. It’s never been easier to trade with Brazil than it is today. Enterprises must ask themselves whether they can afford to be fearful – or whether carefully-calibrated greed is a better bet for surviving the pandemic.