While the country has been hit hard by Covid, the pandemic has modernized many business practices, such as authorizing electronic documents for various business activities. However, many companies were slow to take advantage of support programs provided by the authorities, as they were often unclear, and companies were reluctant to engage in programs that could potentially leave them with unknown liabilities in the future. Brazil is the most complex jurisdiction in TMF`s 2021 Global Business Complexity Index. Complexity in Brazil is determined by a multi-level system of government, in which federal, state, and municipal authorities all have significant legislative powers. Parent companies must register with all three levels of government. Brazil`s judicial system is a multifaceted system that operates at the state and federal levels, just like the U.S. judicial system. Primarily based on the civil law tradition, it divides cases into several different jurisdictions, including labor law, electoral law, military, constitutional and non-constitutional law. It also comprises three appellate instances, with cases of the courts of first instance going either to the Federal Court or to the Supreme Court. Below are two graphs that aim to explain both the role of each dish and the interaction between the different parts of the system. High-resolution versions are also available for download. However, doing business in Brazil requires in-depth knowledge of the country`s bureaucratic business environment, which is one of the most complex in the world.

In fact, the country ranked 124th for “ease of doing business” in the World Bank`s Doing Business 2020 report. The ranking is based on 10 topics, including cross-border trade, property registration, obtaining credit, paying taxes, and enforcing contracts. It must be understood from the outset that Brazil is far from the “new frontier”. Many underestimate the strength of local industry and forget the long-standing presence of multinational companies producing and providing services within national borders. The Brazilian stock exchange (B3) is the largest in Latin America and one of the most liquid in the world. Excessive bureaucracy, language, cultural differences and a complex legal environment were and are the biggest obstacles for foreigners who want to do business in Brazil. Yet Brazil`s more than 200 million people, along with a robust financial, agricultural, IT and mining sector and its urgent need for infrastructure, offer great opportunities to those willing to take and manage the risks and rewards involved. Remember that although Brazil has by far the most robust and least corrupt legal system in the BRIC countries, Brazil is unfortunately not an easy place to do business. Some issues differ significantly from how business is done elsewhere, especially in relation to developed markets. To succeed in Brazil, businesses must do their homework and navigate the complexities of an emerging market economy. A good first step to gaining a basic understanding of a country like Brazil is to have access to a number of reputable and free resources, like this library of country profiles, available to companies to take the first step towards enlightened and successful expansion. Brazil is a civil jurisdiction – that is, it follows the German-French (also “continental European”) legal tradition.

Brazil`s legal system relies heavily on government bureaucrats, so stamps and trips to notaries are part of everyday life. Personal relationships, name dropping and referrals are common and generally desired. While this can be an advantage in any country, it is especially important in Brazil. On average, Brazilian businessmen are more susceptible to such tactics than their Western counterparts, perhaps due to distrust of Brazilian institutions. Other types of business associations may be partnerships (regulated in the UK by the Partnership Act 1890) or trusts (such as a pension fund) or limited liability companies (such as certain universities or charities). Under company law, companies of all sizes have their own legal entities with limited or unlimited liability for their shareholders. The poor ranking is largely due to Brazil`s history of protecting local businesses and employees, which has led to a plethora of local rules and regulations. In 2019, the government introduced the Economic Freedom Act, which aims to establish rules to cut red tape for businessmen and corporations to improve revenue and job creation. Among the main innovations introduced by the above-mentioned legislation are the integration of the systems of chambers of commerce and town halls; Simplify the process of setting up new companies and their branches across the country, including allowing a single partner to form a limited liability company; and the surrender of the business licence required to carry out commercial activities considered low-risk. Brazilians are generally more informal than Anglo-Saxons and Northern Europeans. Brazilian businessmen invariably talk in meetings about football results, their children`s education or even politics.

Time is rarely of the essence (especially outside the city of São Paulo), so Brazilians may be late for meetings. Corporate law (also “company law” or “company law”) is the study of how shareholders, directors, employees, creditors and other stakeholders such as consumers, the community and the environment interact with each other. Company law is part of company law (or the law of professional associations). ¹At least to establish the first contacts, the first presentations and negotiate the most complex parts of an agreement. ²Spanish is widely spoken in areas near Brazil`s western border. However, all Brazilian business centers, with the exception of Brasilia (in the central-western region), are located in the eastern part of Brazil. For more information on Brazil`s justice system, check out our Rule of Law series, which brings together judges, prosecutors, defense lawyers, legal experts, and practitioners concerned with the development of justice and the rule of law in Brazil in Washington. In 2018, the Brazilian government simplified the reporting of employment and tax information for private employers through a new digital accounting system called “eSocial.” The digital reporting system was part of the Brazilian government`s public digital accounting system initiative and was designed as a way to improve the government`s ability to enforce labor laws, reduce fraud, promote administrative transparency, and facilitate the reporting process for employers and tax administration. Employers had to use the system starting in 2018, but since the old format is still in place, complying with all requirements can result in a doubling of the effort. Contact our team of experts today to discuss how TMF Group can help your business in Brazil. It is very difficult to define a Brazilian “way of doing business”. Brazil is simply too big and has many regional differences, so there is no suitable formula.

Therefore, when negotiating with Brazilians, you can only consider a rough checklist: a foreigner who wants to do business with Brazil should gain knowledge about his business practices. Having an overview of the business environment, language and culture is a good place to start. However, it will be very beneficial to understand how to negotiate an agreement and be aware of its legal system. Brazil is a very controversial nation. Litigation can (and often does) take more than a decade. Court proceedings are largely based on written documents and are highly formalistic. Corruption is not widespread in the courts and the judicial system is cleaner and more stable than in other BRICS countries. However, Brazil is also an attractive destination for investment, as it is ranked 12th largest economy in the world in terms of GDP and has experienced rapid growth in recent years. Sarcasm is present, but much less common than, for example, in the United Kingdom, Australia or New Zealand. Due to cultural differences and translation issues, sarcasm should be avoided, as it could backfire dangerously on the person using it. Are you looking for an experienced Brazilian law firm to help you in a corporate matter? The content of this article is intended to provide a general guide on the subject.

Expert advice should be sought on your particular situation. Perhaps the most significant change in Brazil`s recent history has been the shift from economic isolation to global integration that took place in the 1990s.