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Mathew Georges
Brazil is a rapidly developing country with many interesting qualities that might
make foreign direct investment an appealing topic of discussion in the country. First let’s
talk about the governmental structure and laws that should be taken into consideration
while thinking about investing into the markets of Brazil. In the 1980’s Brazil became a
democracy. With that being said, today Brazil is run by a democratic government and
those in rule in Brazil are elected into government by formal elections by the people of
Brazil. The government in Brazil is made up by the executive branch, legislative branch,
and the judicial branch. Each state of Brazil has a elected legislature and assigned
governor. The judicial branch in Brazil holds a lot of power in the government of Brazil
due to the fact that each judge in Brazil serves a lifelong term. Much like in the United
States laws in Brazil must undergo an extensive process in order to become laws. A law
in Brazil starts off as a bill and must be reviewed by at least two commissions, then the
bill must be voted on and approved by both houses in Brazil, after that the president of
Brazil must approve the bill and only until all of that is complete a bill will become a law
in Brail. Needless to say, the governmental system of Brazil is very established and the
country of Brazil is very much governed by law rather then individual government
officials. There are many laws that must be taken not consideration while thinking about
investing into the markets of Brazil. We will analyze both sides of this spectrum, one that
supports foreign investment in Brazil and one that opposes foreign investment in Brazil.
Onerous labor laws are established in Brazil and this might be a turn off to many foreign
investors that want to enter the markets of Brazil. What this means is that the cost for
foreign company to enter the markets of Brazil are considerably high, and that a large
amount of local businesses in Brazil are kept in the informal sector. That shouldn’t
completely discourage foreign direct investment in Brazil because the government in
Brazil actually encourages foreign direct investment in Brazil in a sense that there are
enticing tax exemptions for foreign investments in Brazil. Some of the tax incentives
include but are not limited to tax reductions to companies that are established in low
economical regions, and also certain taxes are except to companies that export a large
amount of their productions in communications and IT. Also, bilateral agreements that
aid in the protection of foreign investments within 14 countries has been signed by
Brazil. Overall Brazil has both favorable and unfavorable laws that govern foreign direct
investment.
