Running a business always involves a degree of bureaucracy. Whether it’s time to plan your finances, report to the tax authorities or fulfill tax obligations. Another factor that contributes to this difficulty is the Brazilian bureaucracy, which is considered one of the most complex in the world. Something that greatly affects international investors.
Foreign capital is an important part of today’s world economy. In a globalized world, it is necessary to think about investments in large companies on this scale. Likewise, it is necessary to consider the differences in bureaucracy implemented in different countries and how to navigate it.
Follow and understand a little more about the fame of bureaucracy in Brazil and how it affects foreign investors.
Great economic potential that attracts investors
One of the main reasons this issue appears so often is that, despite everything, Brazil is a very attractive destination for foreign companies in various segments. Mainly in the field of agricultural commodities and ores. And it is important to attract this capital to further boost the country’s economy.
Brazil is today the fifth largest economy in the world and the largest in Latin America. Its expressive growth in recent years is visible and has drawn the attention of several large companies wanting to establish themselves here.
Highly complex tax system
Of course, to be able to invest in Brazil, it is necessary to learn to deal with the local tax system first. And this is where most problems occur. It is not without reason that he is known to be complex and obtuse.
First, there are a very high number of taxes, each with their own rules and associated deadlines. Even charges that could be incurred as part of a single tax are broken down into small payments. This increases the risk of errors in your processing, which can lead to fines.
Changes are slow and incremental
There is a lot of external pressure to reform the Brazilian tax system, trying to make it simpler and more efficient. This would facilitate the entry of foreign companies and would also make the management of small and medium-sized domestic companies easier. It would be a benefit to all sides.
Unfortunately, changes are still implemented very slowly, going through several stages before being approved. This is not always a bad thing, as it prevents changes from being made without due consideration. However, in practice, only minor changes and updates are approved at a time.
The result is that, even with inefficient tax laws, it’s hard to think of a sizable upgrade in the near future. On the other hand, fewer changes also make your long-term plans a little easier.
Difficulty finding advice
Undoubtedly, the biggest problem for international investors today is getting the guidance they need to enter the Brazilian market. A good administrator, for example, allows a bridge to be made between foreign capital and Brazil’s bureaucratic processes, avoiding some of its pitfalls.
If you are looking for this type of consultancy, contact MANDAT and see how we can help you.