Brazil began the year having to solve the past, improve the present and understand it’s future.

The country has come at a time of great disruption, an irreversible moment of change, of new market and business paradigms, one one of its most decisive moments in its modern history.

The country will certainly emerge stronger and structured from this crisis, we must move forward conclusively with the modernization agenda. To return to our growth path, we can not pretend that we have no swamp in front of us. Cross through this swamp has become a mandatory road in order to return to the path of growth and development of our country.

How to do business with Brazil, how to compete internally and succeed in the new economy is a major task. Understand how this affected your plans for Brazil is crucial.

Yes, the country is in incre-asing movement, when this happens, it's like a open window, at this particular mo-ment the window is open for major structural reforms and the implementation of a new positive agenda, more com-prehensive and bolder coun-try is about to emerge. Ignore this moment means that Bra-zil is not understanding the real opportunity to progress to the next decades.

Doing business with Brazil remains a challenge, we have a revolution going on in terms of technology, government, relations between countries, companies and labor.

In the history of the countries there are defining moments, this is ours.

André Lima is a senior consultant of companies and businesses, with more than 20 years of experience in financial markets and mergers and acquisi-tions operations and processes. Has over the years advising dozens of Brazilian companies management in crisis processes, recreating the bu-siness architecture, and building new competitive advantages and innova-tions. The longer the years assisted many international clientes, as well as guided international investors to settle their business in Brazil.

The author has written this book to guide international investors about the main characteristics of the market behavior, to clarify the main business rules, to inform about the main hu-man characteristics, it’s taxes complex regulations and the challenges in ter-ms os logistics and distribuition across the country and mainly, give an insight about various opportunities and busi-ness trends that can become very pro-fitable in Brazil.

ANDRÉ LIMA3nd Edition

English Version

A LAND OF OPPORTUNITIES UNDER CONSTRUCTION

BRAZILINC.

HOW TO DO BUSINESS WITH BRAZIL

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BRAZIL INC.HOW TO DO

BUSINESS WITH BRAZIL

ANDRÉ LIMA3nd edition

English Version

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SUMARY

Professional summary .................................19Professional contacts ...................................27Special suport .............................................29Brazilian market - Positive agenda to get out of the economic crisis .................................31Brazil and its future .....................................34Introduction ...............................................37Special dedication .......................................38Thanks and recognitions ...........................41Brazil - wonderful country and its so terrible stereotypes ..................................................45Why i wrote this book? ...............................48Characteristics of national behaviour .........51Cultural orientation ....................................53Personal safety .............................................53Education and security in transit .................55Spanish language .........................................56Punctuality .................................................57Personal presentation ...................................58Hierarchy ....................................................59Professional meetings ..................................60Patience ......................................................60Business negotiations...................................62Not always the “yes” mean “yes” ..................63

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Gambiarra - The brazilian way of going around ........................................................64Personal opinions ........................................66The business lunch ......................................66Dinner invitations .....................................67National bureaucracy ................................68Stamps culture ...........................................68The social events in 2016 ............................69Bolsa familia social program ........................73The brazilian slums (favelas) ........................78 Brazil ..........................................................81Brazil general trends ...................................89Adjustments of external accounts .................90The commercial scale ..................................92The public accounts ....................................93National government .................................105Horrival year .............................................106Lava jato operation ....................................107What does odebrecht delivery approach mean? .......................................................108Lenience agreements .................................109Odebrecht construction the ex largest in latin america .....................111Downgrade ...............................................114The worst allready happened ....................115Brazilian industry ......................................117Industrial production ................................117National industry performance ..................118

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Market confidence ....................................120Restoring the economy ..............................121Commerce performance ............................122Retail performance ....................................123Services performance .................................125Unemployment .........................................126The performance of the services sector .......127Economic measures ...................................128Brazilian financial system ..........................129Profits, margins and interest bank compositions .............................................130Selic rate ..................................................131Banks ........................................................132Interest charged by banks ..........................132The performance of financial credit ...........133Default .....................................................135The interest rates.......................................137Restriction of rotary use ............................138Projection for inflation ..............................139Pnb projection ..........................................140Fidc - investment fund focused in receivables credits ......................................141Factorings ................................................142Anticipation of receivables / duplicates discount ....................................................142Employee payroll as an currency exchange ..143Finep - national funding ............................143Bndes - national bank for social development .............................................145

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Serasa .......................................................148The political organization ..........................150Corruption in brazil ..................................153Private corruption .....................................153Politics corruption in brazil ......................155Corruption control and inspection ............157The public offices......................................161Brazilian auto industry ..............................163Re-opening to the world ............................165Business general environment in the long term ..................................................167Brazilian capabilities for international attractiveness .............................................169The macroeconomic environment ..............170Institutional environment ..........................173Talent and human capital ..........................175Physical infrastructure ...............................175Financial infrastructure .............................176Commercial connectivity ..........................178Country external image .............................179Reasons to invest in brazil .........................179Highlights of the national economy ...........18351 Reasons to invest in brazil .....................18620 Business opportunities ..........................1931- Millions of market consumers ..............193Consumption and retail.............................196The retail sector in brazil ...........................205Hyper and supermarkets ............................208Retail dynamics ........................................208

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4 - Brazilian infrastructure future plants ....210The public concessions ..............................212Railways ...................................................212Airports ....................................................213Ports .........................................................215Highways ..................................................216Electricity .................................................2185 - B2b sustainable ....................................2196- Reverse logistics ....................................2207- Social commerce ...................................2218 - Smarter and healthy population ............2219 - Better quality in every thing .................22310- Technology and innovation .................22511. Cosmetics industry - vanity & beauty .22712 –Male beauty market ............................22913. Affordable beauty ................................23014 - Portion for one person .......................23015- Medium sized cities .............................23116 - Focus on middle class .........................23217 – The exclusivity market .......................23218. Persons with special needs....................23319. Functional drinks ...............................23420 - Finite resources ..................................234Overview for mergers and acquisitions in Brazil ........................................................241Highlights in merger and acquisitions ........244Initial approach target for mergers and acquisitions .............247Performing businesses due diligences .........248

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Determination of business value achieving the valuations ............................................249Characteristics of the brazilian market .......250Market forecasting ...................................253Segmentation market and profile of brazilian consumers ...................................255Economic and social classes .......................257Potential regions to investment in brazil .....258Investing in southeast ................................260Investing in south .....................................262Northeast region .......................................264Benefits tax applied to the northeast ..........266North region .............................................269New strategic importance of the amazon ....271Investing in manaus free trade zone ...........276Midwest region .........................................279Investing in paraguay - tax privileges of Paraguay ...................................................280Business missions ......................................284Our neighbour ..........................................286Made in paraguay ......................................287Differences of costs of taxation in relation to Brazil .......................................288Logistics and distribution in continental dimensions ................................................293Brazililian costs .........................................302Attempting to export the brazilian costs ...........303Brazilian cost in comparison with the

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rest of the world ...........................................305Starting a business in Brazil ..........................309Requirements for international investors .......310Brazilian company with foreign partner of participation ............................................313Authorization for the operation of a foreign com-pany in Brazil ...............................................314Participation of foreign companies in Brazil .......................................................315Types of companies in the brazilian legislation ....................................................316Individual entrepreneur ................................317Limited liability company .............................317Anonymous society ......................................318Activities in the foreign participation is prohibited or restricted .................................320Public biddings ............................................325Who really makes a bid ................................325Who can participate .....................................328State ‘can’ pay more expensive than normal market? ........................................................328Types of bidding ..........................................331Disclosure of the bidding ............................332Differential scheme of bidding (drc) .............334Critical to differential bidding system ..........335Taxes burden ................................................336The main taxes ............................................338Federal taxes ................................................339Proposed tax reform - 2016 .......................340Brutal increasing taxes ...............................342

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State taxes .................................................343Municipal taxes .........................................344Escalation of tax burden ............................344Records in tax collection............................346Taxation returning to the society ..............346Public spending .........................................347A brake on growth.....................................351Icms - tax on the movement of goods .........352Tax substitution ........................................353A default in taxes to strengthen the business cash flow ....................................355Tax evasion “cash flow 2” ..........................357Tax evasion as a market rule.......................358The bankruptcy application for payment coercion ...................................................361Instructions to bankruptcy .......................364Brazilian labor work market .......................366The market prefers already employed professionals .............................................368The cost of staff layoffs ..............................369Desmiss without a cause ............................373Desmissal for cause ...................................374Dismissal from a voluntary request ..........374Labor claims ............................................375The safer way to dismiss a employee ..........376Labor indemnity .......................................377In bankruptcy case ....................................377Those who wants to be dismissid ...............378New workers life’s style and the old

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employment laws ......................................380Legal insecurity .........................................383Labour costs and productivity ....................384Labor and social charges ............................385Workers law modernization .......................387101 Changes proposed in labor laws ..........388Lines of modernization ..............................392Export and incentives ...............................395Bndes- exim ..............................................399Terms exim pre-departure ..........................399Special - Pre-boarding ..............................400Pre-boarding cars ......................................401Post-shipment ...........................................401Funding program to exports - proex ...........402Proex equalization .....................................404Proger export ............................................404Instruments of tax export promotion special customs drawback regime ...............406Drawback green & yellow ..........................408Drawback integrated .................................408Drawback integrated suspension ................409Drawback integrated exemption ................410Special scheme of taxation for the platform of export of information technology services ..411Export processing zones or spa ...................413Exportation special regime .........................414Special regime customs import of crude oil and derivatives - repex ......................................415Reintegra - special scheme of tax return ....415

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Industrial warehouse under control customs computerized - recof..................................416Identification of potential imports brazilian 417Government procurement in import processes ...................................................418Trade promotion - Exhibition in brazil ......419Commercial mission to brazil ....................420Entry visa .................................................421Vaccination ...............................................422Invitation letter .........................................422Commercial practices - General characteristics of the negotiation process ....423Litigation and arbitration .........................424Distribution channels ................................425Direct export ............................................425Indirect export ..........................................426Commercial agents ....................................428Opening an office in brazil ........................430Tax treatment of imports ...........................431Import tax - protection ..............................432Commercial customs .................................433The 22 things not to do the importer ........436

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BRAZIL INC. explores the market forces, economic, so-cial, cultural and the most striking regional behaviors and trends that make Brazil one unic place to do business, as well as revealing the risks and guide the reader how to avoid frustrations, losses and financial mistakes.

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WE HAVE A STONE IN OUR MIDWAY

Corruption is a stone in the way of Brazil and its complex economy. By the way it spreads, it may bankrupt the country’s development pro-jects. Corruption is something destructuring and grew at an accelerated rate in recent years. Corruption undermines the foundations of de-mocracy and endangers millions of Brazilians.

When the corruption sets in, it produces a vi-cious circle, which reduces the productivity of a country, its presence changes the private and public businesses environments, and invades our homes.

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BE CAREFULL

The international investor can make a big pro-fit in Brazil by joining areas where the federal and state governments have the largest share of management respon-sibility. Wherever the government is, there are full opportunities for high profitabi-lity, given the incompetence of public money management, the lack of ability to make public money profitable, and deliver services with quality and dignity. So the main business opportunities lies in hospitals, public health, security, port logistics, concessions in public works, airports, infrastructure and so on.

Operation Lava a JATO took the ability of the largest contractors to participate in future pu-blic tenders, opening another important profi-tability opportunity.

Brazil is no land for amateurs in business, BE CAREFULL and good luck doing business with us!

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PROFESSIONAL SUMMARY

CFO - Financial and Business Consultant

Languages: English, French, Spanish, Portugue-se

International experiences: USA - Spain - Bel-gium - Netherlands - France - Germany - Italy - China - Japan - Hong Kong - Taiwan - Argen-tina - Chile - Mexico - Switzerland - Portugal - United Kingdom - South Africa and North, among others.

Actual member of Administration Boarder

• Board Member Brazil and China & Taiwan (pro bono)

• Member of the Board of Directors of 4 Avants Technology in Computational Intel-ligence and Augmented Reality and Virtual Reality

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• Member of the Board of Directors BUWW (USA)

• Business Advisor for HIG - Havard Invest-ment Group (USA)

• Business Advisor for Wise Tree Capital (USA)

• Business Advisor of Debt Funds in Brazil

Consultancy in Business Management

• 20 years of experience focused on Business Consulting, Financial Management, with large international experience;

• Extensive experience and financial market re-putation, strong capital approach and credibi-lity with the main funding sources for solving complex financial transactions;

• Proactively seeks to ensure compliance with laws and regulations based on international best bussines practices and standards through, Conflict of Interest, Information Barriers, Sui-tability, Money Laundering Prevention, Inter-nal Fraud or Bribing.

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• In recent years, 50 service contracts have been carried out in all regions of the country and abroad, providing support and advice in seve-ral critical areas, including:

Special Situations - Restructuring and Recapitalization

• Realistic, pragmatic assessment and definition of solutions for companies with inappropriate capital structure and inserted in adverse ma-croeconomic and / or sectorial contexts, based on own analysis platform similar to investment banking;

• Development and execution of strategic and financial business plan to promote the turna-round of the company;

• Review of strategic alternatives for restructu-ring and / or recapitalization of companies;

• Debt Restructuring;

• Capital Management;

• Risk Management - a conservative profile in its work, being concerned with the efficient

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management of the intrinsic risks of the busi-ness;

• Management of Assets and Projects;

• Restructuring and Recapitalization in case of Administrative and/or Judicial Re-covery

• Consensus, Administrative -Judicial and Judi-cial Financial Restructuring;

• Consensus requests for amendment and sus-pension of restrictive clauses;

• Negotiations with key stakeholders;

Financing Rescue and Structured Resources

• Businees Advisory to companies with a high level of leverage or an inadequate profile of in-debtedness, to renegotiate the terms and con-ditions of debts with financial and operational creditors and equation between cash genera-tion and liabilities;

• Bank loans, structured credit, issuance of high yield bonds, debentures;

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• Structuring of operations - Commercial Pa-pers, CCB, CRI, FIDICs and customized and innovative solutions for Funding in general;

• New Money or financing via DIP (new finan-cing granted via JR);

• Investments as a catalyst for consummation of the restructuring operation, via a new investor and / or other structured operations;

• Use of Capital Market Instruments for Public and Private Offerings, coordinating the deve-lopment of the Business Plan, the process of planning the offer of shares and elaboration of an investor relations area, hiring of advisors and coordination of road show, pricing and sale off;

• Securitizations and Monetization of Real Es-tate Assets;

• Structuring of Real Estate Sales Leaseback operation - Implementation of funding throu-gh fixed income assets to optimize the capital structure;

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• Build To Build operation;

• Structuring and active management of real es-tate investments;

• Structuring of Credit Operation through Gua-rantees and Disposals;

• Structuring of the operation of Administrative Auctions;

• Structuring of operation Dação de Imóveis para Settlement of Federal Taxes Law 13,313

M & A - Distressed and non Distressed

• Presentation of original strategic alternatives directed to the increasingly complex needs of companies;

• Complete Advisory Mergers and Acquisitions - buy side and sell side for strategic and finan-cial investors in Brazil and abroad;

• Feasibility Analysis and structuring of con-tracts with executives, shareholders and inves-tors;

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• Presentation of the Offer for Investment Funds in Brazil and abroad;

• Presentation of the Offer for Debt Funds in Brazil;

• Analysis and Elaboration of Investors Exit Clauses and divestitures;

• Equity Valuation Direction / Free Cash Flow and EBITDA Multiples;

• Direction of Due Diligences;

• Disposal of Assets / Assets using article 60 of judicial reorganization;

• Sale of Assets / free and clear assets of pre-exis-ting liabilities;

• Private Placement - strategic alienation of shareholding interests for third parties seeking valuation of assets.

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Special Personal and Professional Projects

Launched in 2015 one of the largest business platforms for mergers and acquisitions www.tri-pleflag.com, currently with more than 800 com-panies registered for purchase and sale, represen-ting about R$ 200 billion in business - available in 8 languages and 18 Business templates and more than 150 investment funds con-nected to the technology solution

Launched in 2016 (NY / USA) a business book - HOW TO BUSINESS WITH BRAZIL - The International Investor Compass - are more than 400 pages available in English – AMAZON pla-tform and Kindle.

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PROFESSIONAL CONTACTS

www.donner-prosper.com.br

(BUSINESS CONSULTING IN BRAZIL)

www.tripleflag.com

(MERGER AND ACQUISITIONS PLATFORM)

phone: (55 41) 99288.4249

email: andre@donner-prosper.com.br

skype: andredonnerpres1

linkedin: andre limalima

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SPECIAL SUPORT

Business Consulting and Advisory

www.donner-prosper.com.br

Merger and Acquisitions Connecting Business World Wide

www.tripleflag.com

China And Taiwan

Chambers Of Commerce In Brazil

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- BRAZILIAN MARKET - POSITIVE AGENDA TO GET OUT OF

THE ECONOMIC CRISIS

If we take the economic assumptions and the doctri-nes of the Chicago School of Economics, which predicted briefly that the state should let the market and the economy operate without any intervention; eco-nomic problems will find a solution through it’s own market mechanisms, the output map of the crisis will give more or less as follows:

Private companies will increase their share on ex-ports, due to exchange rate and the devalua-tion of the Brazilian currency the products and services have become much more competitive and the companies become more profitable, they will return investments with greater vigor;

Companies that imports products and compo-nentes abroad, will invariably will buy domesti-

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cly and with greater domestic content, returning the investments and thus returning to employ;

Thousands of companies will adapt, some will shrink, increase the number of requests for ju-dicial recovery and some will face the bankrup-tcy, some will redefine it’s markets, products, geographic presence, your target audience, the vast majority of companies will be in default of banks and with taxes, others will be vanish from the market;

International companies should settle in Brazil, seeking business in electricity, renewable energy, pu-blic concessions and the infrastructure, the number of mergers and acquisitions is expected to grow, since the national assets are 60% che-aper;

Trade competition will be even more aggressive and fierce, shopping for stock should decrease, shopping in smaller batches and contínuos will

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accelerate national distribution and logistics. We will see more legi-timate and frequent sa-les, the net profit margins are expected to fall. E-commerce is expected to grow considerably in Brazil. This trade war movement will benefit the advertising agencies and publicity servi-ces;

All these movements exert a positive pressure on the prices charged to consumers, putting the ne-arest in-flation rates of the Government’s goal;

In large retail chains, will increase the number of mergers and acquisitions, small and medium enter-prises will disappear, there will be new lar-ge groups;

Large retail chains should raise the payment booklets, returning with their own funding, im-pacting profit mar-gins, increasing business risk while avoiding the high interest rates charged by banks to consumer credit;

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The unemployment slows down and the confi-dence of workers and consumers begin to slowly reestablish - confidence is a major fuel economy;

All of this without any intervention by the sta-te, every things happening from the market’s strength itself.

BRAZIL AND ITS FUTURE

The globalized world managed to overcome the financial crisis of 2007/2008, but us, got oursel-fes in deep trouble!

For Brazil there remain uncertainties in politi-cal, commercial and economic relations. In the last few years we have found that the economy focused on knowledge, technology and innova-tion raises capital gains rates exponentially but is far from generating jobs in the proportion re-quired by the growing world population.

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In 2016 the population realized that we were on the wrong track of the economy and in a very deep fiscal crisis, with the stagnation of the eco-nomy, the return of high rates of inflation and followed by a high unemployment rates, this is the pic-ture of a painful and rigorous transition.

Never in the history of this country have we depended so much on advances in the political field and finally we realize that the economy ba-sed on knowledge and new technologies creates an interconnected society in a way that politi-cians do not represent society effectively and are object, as well as the national congress of severe criticism and growing discredit.

Brazil needs to innovate in the political field, with a profound change in the way of conducts itself and review its ethical and moral values.

Brazil is tired of waiting!

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INTRODUCTION

Despite what you know or if it discloses, the vast majority of business conducted in the cou-ntry are serious and meet the most stringent cor-porate governance rules, including compliance, transparency and corporate equity.

Brazil is a prisoner of it’s country “little way of doing things”, always has some unconventional solution to the challenges to be overcome, either through tax maneuvers, use of government rot-ten papers cartels training, payment of bribes, use of tax havens, and the use of oranges. The list of illegal and quick fixes is extensive and, in times of crisis make the country further distance the best corporate governance practices. Everyo-ne wants to survive at any cost. It is important to look forward and put aside the “way” that are proper management practices in emerging cou-ntries and that slowly will have to give way to a more balanced environment, where the stresses

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between the demands of the government and the demands of entrepreneurs and society, are a more sensitive, harmonious, collaborative and rational relationship.

The Brazil will emerge from this crisis, but left others that threatened to steal our future. The planet is in turbulent transformation, the tech-nological revolution, climate change and global trade agreements will change the ay we live, there is no room for improvisation or the Brazi-lian jeitinho to see and sort things out.

SPECIAL DEDICATION

When my son Joshua Louis S.L (16), who hope to take advantage of a country that once could and should be used to improve in general.

I hope my dear and beloved son that you can identify and conquer your place in Brazil. I also

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hope that this victory is achieved honestly and fairly.

Get ready for a global life in a competitive world and never forget the importance of happiness.

With love, your father

Courage!

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THANKS AND RECOGNITIONS

I owe a lot to many people and I succeeded in men-tioning anybody and end up running the risk of making omissions, but I must thank my main creditors. One of my greatest mentors was Alvaro Antonio Bressan, head of one of the lar-gest electricity distributors in Brazil - Network Group, a professional goal, sharp, balanced and with an exceptional macro economic intelligen-ce. flow rates equal to André Luis Fauth, Presi-dent of important organizations for the scenery and national economy, specializing in industries related to the Construction sector, has one of the most privileged minds in terms of systemic knowledge of business processes and results. The Executive Evandro Coura Camilo, former Presi-dent of the Rede Energy Group, a company that shared and imple-mented successfully dozens of business administration concepts, corporate governance and techniques aimed at improving results, an excellent and produc-tive coexistence

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staff, an invaluable learning. Eduardo Berbigier young and brilliant tax lawyer in special tri-bute in memoriam to Sergio Murad (Beto Carrero), who built a consolidated equity to deliver the dream, playing and where the quality indicator is how much people have happier experiences within amusement park; the Honorable Judge Sergio Moro and his team for their exceptional work in Lava Jato Operation, which is reviving the hopes of the Brazilian people and possibi-lities that can achieve levels of a more just and equitable nation, to Dr. John Martinelli an icon in ethi-cal conduct , moral and professional who built one of the largest corporate law firms in the country; José Cavalcanti one of the lar-gest Business Coach profes-sionals from Brazil; to some leaders who have listed at some point in my professional life, as John Satt Fi-lho, CEO of Competence Communication demons-trated in our business meetings to be one of the bri--ght and dynamic minds in the world of adver-tising and marketing in Brazil, Miguel Abuhab exceptional dyna-mic entrepreneur and high ca-

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pacity for innovation, creator of the technology platform Neogrid that promotes a real break-through in global concepts of business adminis-tration; to Tony Chiu Chairman of the China Chamber of Commerce and Taiwan for their constant support and their enormous efficiency and motivation in addressing national projects Mergers and Brazil Procurement for all of Asia, Antonio Carlos Dias de Oliveira by brainpower above the curve and the enormous effects of predictability and results and installation of dif-ferent solutions and business scena-rios; Detlev Karbek one of the business minds of gre-ater ca-pacity and creator of BAV, (Balanced Value Ad-ded) for the outstanding contribution of unique technology results management; and dozens of bu-siness brokers from all over the world, Chas-se Olson & Michael Sehn from 4Avants Tec, Michael Deen, Robert Dimmery, Neil Beckett, John Meier, Gustave Glotz, Kamalesh Seckar, Cosac & Natif, Stendhal, Leda Maria - LMS Brazil, Edson Venturi, Celso Gio-vanella, Jor-ge Dal Sasso, Mauritius Dalçoquio, Dio-nesto

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Coca Lucas Thiago Carla Silveira, Willian Ro--mualdo, A. Severo and others, with whom I re-late da-ily and teach international business rules and make myself a better person, an executive more objective, focused on results and more ef-ficient for my clients; finally the most expensive debt: my wife Valderez S. Lima bravely helps the family and the various busi-nesses and even put up with the moody and restless husband.

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BRAZIL - WONDERFUL COUNTRY AND ITS SO TERRIBLE

STEREOTYPES

The stereotype that Brazil possess: a joyful cou-ntry, friendly and hospitable people, full of ri-ches and natural beauty, samba, soccer, carnival and beautiful women, it is correct, but incom-plete because it does not have any business re-presentation.

Brazil is much more than the cloudy stereotypes charging and the world need to learn more about our country and our potential for business.

Probably, we are among the best entrepreneurs and business managers in the world, conside-ring the most varied and deep daily challenges that entrepreneurs must overcome. We pay the highest bank interest rates in the world, the hi-gher tax burden on the planet, a complex and restricted access to credit and finally a logistics

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infrastructure and highly challenging distribu-tion.

In addition, the international businessman has few lenses to get in touch with the reality of bu-siness in our territory.

In fact the Brazil failure in terms of commu-nication, dissemination and propagation of its corporate image internationally and the inves-tor ends up being directed to observe our coun-try for promotional lenses Government (which may be biased) or through the lens not always positive news and media, which obviously living of bad news - “Good news does not sell news-papers.”

Brazil is a country in full social metamorpho-sis, recent social demonstrations questioned the competence of the state to fulfill the role of or-ganizing unit of society and gradually the space for organizing and autonomous mobilization

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of social groups has been working as a lever for major renovations and changes occur effectively in society, where entrepreneurs and business people in general also demonstrates exhausted the stereotype, since Brazil’s contribution to the world economy of course, goes far beyond what samba, rum, soccer and beautiful woman.

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WHY I WROTE THIS BOOK?

Originally this book was conceived and laun-ched in the US in January 2015, with a single english version and directed exclusively to exe-cutives, entrepreneurs and international inves-tors, but ended up being convinced that it would be a productive initiative makes it available in Portuguese and so charge to Brazil. During my 20 year career as a business consultant and acti-vely participated in dozens of consultancy and advisory contracts in several countries, had the opportunity to build a comparative ability pro-cesses, behaviors and different business rules and professional etiquette, which constituted in an extensive technical library, now put at your disposal. Another reason is that routinely attend many businessmen and investors from various countries and realized that the doubts, questions and curiosities are in addition to relevant and recurrent, addressing important market beha-vior issues, risks, opportunities, constraints, and

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especially where to invest and where not invest. How to answer questions is usually the starting point for building professional relationships, I decided to document what I consider to be the main features, features and shortcuts to doing business in a safe, objective and profitable way with Brazil.

Have a good and productive reading!

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CHARACTERISTICS OF NATIONAL BEHAVIOUR

For the newcomer in Brazil, it is important to have a broad knowledge of the Brazilian market and how to operate the business within the par-ticularities of each region. Brazil is a country with behavior quite different customs and tradi-tions in all his cardinals points and is mainly to understand the complexity and variability of the tax system and distribution and logistics chal-lenges that are changing in every region.

Doing business with Brazilians is very compli-cated.

Not arrive on time, and promise not fulfilled. They are direct, it is almost never clear about what they want. Like most of doing business on the estimates developed by the interlocutor than by merit and by business metrics itself. They do not know diverge take everything personally

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plan - so avoid the conflict, prefer compromise, prefer to “take the cake” to have to say no “in the can”. Some are kleptomaniac, love a “ball,” a bribe a favor here and a traffic of influence the-re, a sweetheart in there mouth. Negotiate with Brazilians is difficult, get ready.

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CULTURAL ORIENTATION

The country has continental geographical di-mensions and be differences in habits and cus-toms of the various regions, there is no model for establishing cultural guidelines which allow the entrepreneur to predict the outcome of re-lationships, noting that work with individuals, and there are always exceptions to every rule . In general we assume that everyone acts on basis of their own interests and common sense.

PERSONAL SAFETY

Always take into consideration that this is a country with high rates of crime, violence, as-saults and robberies and kidnappings are part of day-to-day news and the population especially in large cities.

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All traditional care must be redoubled by the foreigner, for example, a common form of crime in Brazil is the “lightning kidnapping,” whose intention is to lead the victim to ATMs to make withdrawals and / or make purchases in stores, using password access to debit and credit cards. To prevent lightning kidnapping becomes so-mething more dangerous, avoid using business cards with pompous titles such as President, CEO, CFO, if a criminal realize that this is an “important” victim, what could be a crime qui-ckly and without consequences grids, can go on to become a potential hijacking larger, lon-g-term and with an uncertain end and trauma-tizing for the victim.

For people who panic easily at risk: never react to a crime and noted keep somewhere easily ac-cessible the passwords of credit cards, because criminals can potentially become violent when is unsuccessful in the attempt of the crime in this way, can not remember the password can

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become another aggravating factor. Always se-parate some value to deliver to the criminal.

Does not wear anything of value such as wat-ches, computers, designer handbags, not denou-nce their status, travel modestly, strictly without attracting attention.

EDUCATION AND SECURITY IN TRANSIT

The brazilian is very aggressive in traffic, recent statistics show that traffic violence is the second leading cause of death in the country, ahead of murders, an effect of not complying with laws and poor quality of drivers.

In the last decade, the annual average there are about 50,000 deaths in traffic accidents and are about 50,000 deaths caused by homicide across

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the country. Brazil has not yet built a national project to reduce these losses, which claims the lives most of the time envo, seeing the Brazilian youth, jeopardizing the construction of a stron-ger country, safe and humane future.

In the pedestrian streets are clearly ignored and even the safety of tracks, hardly a driver will stop to allow the pedestrian proceed safely. The right overtaking drivers is simply defined as the higher vehicle.

SPANISH LANGUAGE

Who hopes to use Spanish to communicate will keep a deaf conversation. The national language is Brazilian Portuguese, a variant of the Portu-guese of Portugal. Find that in Brazil the langua-ge is Spanish is a very common mistake, for all the countries of Latin America with exception

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of Brazil speak Spanish. Another point that can cause confusion is the foreigner’s trend learning Portuguese from Portugal. You need to learn the Brazilian expressions.

PUNCTUALITY

The Brazilian executive is known for its lack of attention to punctuality in business meetings, so get used to wait for them. In large urban cen-ters the delay as well as being normal is per-fectly forgivable due to the chaotic traffic and the numerous traffic jams. If you are late, do not stress, the rule works for everyone.

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PERSONAL PRESENTATION

Brazilians speak much using gestures and body and often speak with great proximity to each other, also play often in the arms and shoulders, that is a normal and regular feature, if you feel uncomfortable Do not Retreat, as this would generate a initial discomfort to the relationship or a sign of rejection.

It is always polite to greet everyone present in a group with a strong handshake, which is ge-nerally interpreted as a demonstration of ho-nesty and strength of character. Already to the women, usually greet each other with kisses on each on the face, depending on the region of the country, women can exchange 02 or 03 kisses on the cheek.

Look always look straight into the eyes of the people, in Brazil they are regarded as “windows of the soul”.

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In further meetings, Brazilians tend to embrace warmly, in a show of sympathy, intimacy and harmony.

HIERARCHY

In Brazil, the vast majority of businesses are family-owned, which means that decisions are usually conducted in observance of hierarchy and loyalty. Nepotism is a factor in Brazilian companies, which produces problems for the stimulation of meritocracy systems and com-mitment of staff who is not part of the family group.

Pay attention to the titles that people use, it is normal to use the title “Doctor”, often to hi-ghlight a social position than strictly professio-nal. In any situation use the title “Sir” (male)

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and “Lady” (female) for older people or higher hierarchy.

PROFESSIONAL MEETINGS

Try to schedule your meetings starting at 10:00 AM, which should lead the meeting to a lunch, place of national preference for discussing busi-ness, but wait for the discussion of business to the end, at the time of coffee, when things start back to become more serious.

PATIENCE

In Brazil everything is done at the last minute. Do not lose your temper and control the nerves. Everything will work out and get ready in time. The attitude of most Brazilians before life can

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be summarized as follows: relax and have fun. The Brazilian leaves some things to the last mi-nute, but it is not a generalized situation, it is only a national characteristic.

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BUSINESS NEGOTIATIONS

Be patient while negotiating the Brazilian ad-dresses all issues simultaneously and not sequen-tially. Avoid negotiations with more direct and objective attitudes, the excesses are considered offensive. It is unusual conversation going in order “to the point” and is very normal in early meetings the use of a long conversation about trivial, everyday matters, this serves as heating and icebreakers.

Depending on the nature of your offer, always consider that there will be a rebate request usual between 5% and 10%. It is virtually impossib-le to reach an agreement without granting dis-counts on the initial value. Often the discount request is even greater, because it is aware that you have prepared the original proposal to grant the discount rate usual. In the business environ-ment, will occur requests for bribes or requests for bribes.

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Avoid talking about family and children, Brazi-lian direct the affairs of this nature only to the most intimate people or with a degree of more structured relationship through time and trust.

In first contacts avoid going accompanied by a lawyer or an auditor, Brazilians resent the pre-sence of professionals that would indicate that there is “lack of confidence” initial.

NOT ALWAYS THE “YES” MEAN “YES”

Brazilians are receptive and optimistic and never start a sentence using the word “no.” There are several meanings for the word “yes.” For Brazi-lians “yes” can mean “maybe,” “perhaps,” “I’ll think,” etc. If someone tells you “I’ll call you back,” do not expect the phone to ring then. It

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is not the word “yes” specifically, but the Brazi-lian does not take things at face value.

GAMBIARRA THE BRAZILIAN WAY OF GOING

AROUND

When the Brazilian is on a barrier situation, it will generally seek a makeshift workaround, classified as “way” or a diminutive form of “Bra-zilian way”, he will be held even if it means a slight fall in the rules, but will and interpreted the event will promote the achievement of the initial goal. In Brazil you can give a “way” when things start to go wrong and this is an impor-tant feature in the characteristic of the Brazilian, the “way” sometimes is confused with creativity which in turn merges with competence. Do not be fooled, the “way” can bring more headaches than actual results.

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To issues of mechanical, hydraulic or electrical engineering the “way” wins another name, the “kludge” which is in its final concept the same status of “creativity”, but usually ends up cos-ting more expensive than fixing things the right way from the beginning.

Brazilians tend to approach problematic issues indirectly, usually allowing the “feeling” is the first sense to lead and guide the decision-making process. The facts are admitted as evidence in decision-making, but the facts can “change” or losing relevance due to the need of trading.

By using large spreadsheets and scorecards, get used to pass and pass by them many times, try to be flexible and avoid making conclusive sta-tements because decisions change several times before reaching a final conclusion, which might still be changed in the near future.

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PERSONAL OPINIONS

Avoid getting into discussions about political parties, religion and football, are warm and dry matters to most people and are usually driven by a strong “passion” almost “blind”. The Brazi-lians like to talk in general of cars, restaurants, news, first light subjects.

THE BUSINESS LUNCH

If you are invited to a steakhouse offering car-very recommend - do not feed in the previous 6 hours and once at the restaurant, feed on small portions, since the tastiest meat be served last. Eat in small portions slowly and is ideal so you can make the most of the flavors of meat rodi-zio.

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DINNER INVITATIONS

The Brazilian has a warm and friendly nature, being very usual length of a deal to end an invi-tation to dinner. However very careful as usual the following sentence - We’re having dinner at home any of these days ... and it is very difficult for a foreigner to know if the invitation is actu-ally officer or it is a friendly way of saying that you want to deepen professional relationship for staff, “one of these days”, which is actually “in an uncertain future.”

By accepting a firm invitation, it is recommen-ded to bring a bottle of wine for the male case and behaved bouquet of flowers to the female case. Anyway, never arrive empty-handed, this will be perceived as a little friendly act.

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NATIONAL BUREAUCRACY

In Brazil there are about 14,000 notary offices, which are the centers of the legal bureaucracy, formalism guardians and institutions with pu-blic faith. Perform the services of stamping, issue certificates, such as marriage, birth, dea-th, which in other countries are administered by municipalities. In Brazil there are registries for vital records, notes, real estate, distribution, protests, registration of titles. On average, col-lect 12 billion reais per year. A real machine to make money.

STAMPS CULTURE

In Brazil, official documents are only accepted if they receive the official identification stamps. These stamps can be purchased easily and in

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popular locations and cost around R $ 10 reais (US $ 2.5) and do not take more than 10 mi-nutes to be made. For example, a prescription can contain all the information inherent in the medical professional, but will only be accepted if the doctor put his stamp on the body of the recipe and then your signature. The Brazilian himself suspicious when a document does not have one or more stamps, they seem to legitimi-ze any document, despite the ease of sending to a stamp.

THE SOCIAL EVENTS IN 2016

Public demonstrations that occurred in 2015, shows several things between the dissatisfaction of the people with the speed and capacity of go-vernments to produce solutions and give more answers to the basic needs of the population,

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especially in security questions, health and mo-bility.

If there are two things in the analysis of the events coincide, they are: the validity of the claims and the lack of proposals on how to meet them. Although they feel that the problems that plague them would have to be resolved by the government, by not clearly identify its causes, the protesters cannot articulate proposals ca-pable of solving them.

The Brazil is at a crossroads on how the country will arrange for their own future: as a nation that understands its social problems and its hea-vy legacy, but is moving to resolve them or how the country remains marked by a century-old policy of exclusion whose end is not yet clear.

Brazil has made, it is true, important economic progress and also excels on the world scene as a stable democracy, but still needs to change so

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that its growth is sustainable, as an increase in domestic savings, greater investment in securi-ty, health and education, and implementation of the tax reforms, political and social security, to make the state more efficient and preserve the competitiveness of the entire national pro-ductive sector. Employment levels and income reached record and the improvement in income distribution approached the social characteristi-cs of the country to the more developed nations, it is estimated that 18.5 million people are as-cended socially in Brazil. In the social field, we achieved progressive improvements. Brazil has to be classified by the UNDP (United Nations Development Programme) as a high country HDI (Human Development Index), ahead of two of the other BRIC countries (India and China).

Still face difficulties arising from underdevelo-pment for centuries, but on the other hand, we live unquestionably favorable situations, inclu-ding in demographic terms.

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Currently, we recorded increase in the propor-tion of people of working age, an odd pheno-menon for growth, due to the changing age dis-tribution of the Brazilian population pyramid.

March 2016 was the culmination, we had three popular demonstrations in a single month, and the first, on the 13th, was considered the largest in Brazil’s history, re-aching more than 3 million people in the 26 states of the country. The pro-tests were against corruption, against LULA and in favor of judge Sergio Moro, but the “Outside Dilma” was, of all, the strongest cry.

By 2017 the screams were silenced, but they must roar again with new requests for heads and changes, Brazil understood the strength of the voice of the people for the construction of the new country.

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BOLSA FAMILIA SOCIAL PROGRAM

The Bolsa Familia program in Brazil is opposed, on the grounds that the Bolsa Família is a elec-tioneering and permanent welfare program and that takes watched the vagrancy.

The Bolsa Familia can be evaluated superficially as an assistance and populist program, a way of buying votes of the excluded populaçãoo and margins of poverty.

Another way to assess the program is that it in-creases consumption and improves quality of life in poor regions and part of consumer tran-sactions generate taxes to the government, whi-ch reduces program costs. Another positive as-pect is that the program requires the presence of children in school, contributing to the improve-ment of basic eduction, although that decision was extremely poor. The same benefit of the

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concession are the health care of children, with the requirement of vaccination, for example.

This program ensures the social inclusion of pe-ople who are not in the labor market or are wi-thin the poverty line parameters, the existence of this program ensures among other things, a certain stimulus to the national economy.

In a way, the recipe for economic growth in the Lula government, through the redistribution of wealth, brought health benefits, but this model has run out. Now the basis for the development should take place by reviewing the policy archi-tecture and power, to review the state’s role in the economy and with a focus on Brazilian hu-man capital, combined with the improvement of the education system, oriented to research and development.

The Union budget provides for an increase in 2016 nominal value to be transferred to the Fa-

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mily Grant program. It is planned the opening of new beneficiaries for the program, which now has about 13.9 million families who receive to-tal approximately R$ 27.7 billion for the year, which on average per household amounts to R $ 164.00, about $ 40.00 per month.

The latest survey of the population profile pro-vided by the Federal Government’s Bolsa Famí-lia program shows that the total number of be-neficiaries reaches 45.8 million people. As the country has around 190 million inhabitants, according to estimates by the Brazilian Institute of Geography and Statistics (IBGE), this means that practically one in four Brazilians receives assistance from Bolsa Família. There are 11.1 million families served since June 2006.

A large number are children - between zero and 15 years, there are 18.6 million beneficiaries. The Northeast, the poorest region of the cou-ntry, and second most populous, concentrates most of the people served: 22.6 million. Cea-

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rá has the largest number of beneficiaries, 5.8 million, followed by Minas Gerais, in the Sou-theast, with 4.8 million people. Although the program has a strong rural penetration, the pro-gram concentrates benefits in urban areas (69%) - and women, with a total of 24.3 million, are the majority of those assisted by the program. They also lead the majority of families, making them 90% of the time legal recipients of the benefit. Statistic, however, is a reflection of a government decision: even in homes where wo-men are married or have a partner, payment is made for them.

Today, Bolsa Família has a budget of R$ 8.7 billion per year to serve 11.1 million families. But the investment should increase by R$ 400 million this year and rise to around R$ 10 billion in 2008, after the 18.75% increase in benefits is approved. The current average per family, of R$ 62 per month, will increase to R$ 72 with the readjustment. Between September 2005 and March this year, the program grew by 48.7%

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in number of beneficiaries - from 30.8 million to almost 46 million. Household volume rose from 7.63 million to 11 million in March this year, up 44%. The families entitled to the be-nefit can not have an income above R$ 120 per month and are entitled to a grant ranging from R$ 18 to R$ 112.

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THE BRAZILIAN SLUMS (FAVELAS)

The slums were seen as miserable places, this is no longer true in Brazil. However social classes are not waterproof and are watching since the beginning of 2015 a large downward mobility of movement of social classes and this move-ment is the result of the return of high inflation, reaching more harshly social classes with lower income. Brazil has 11.7 million people living in slums, which is equivalent to the size of the fifth largest state in the confederation. Changes can not be ignored, as the middle-class families, the favelas grew by 33% to 65% over the last 10 years. The residents of these slums have an ex-traordinary annual income of R $ 63.2 billion, equivalent revenues of several small countries like Paraguay and Bolivia. The average mini-mum wage of Slums population is $ 1,000.00 per month and 50% of the houses have plasma or LCD TV, computers and microwave. About

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59% of slum dwellers have no bank account and 65% do not have a credit card.

Regarding education and cultural level, more than a third of the slum population does not have a single book and the educational level average is only 6 years. Despite the difficulties, insecurity, lack electricity, water and sewage, about two thirds of the population say they do not intend to leave the slums.

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BRAZIL

Brazil is the fifth largest country in area, with an area of 8,514,876 km2, which represents 21% of the total area of the Americas and 47.7% in South America. It is also the fifth most popu-lous country the world, with about 200 million inhabitants.

It is a federal republic comprising the Union, 26 states and the Federal District, in addition to about 5,560 municipalities. Its territory is divi-ded into five major regions, North, Northeast, South, Southeast and Midwest, whose which will explore their potential for the business en-vironment.

A decrease of 3.0% It is anticipated for the Bra-zilian gross domestic product this year and 1% for the next, it is estimated that the country will close 2015 with a GDP of 1.8 trillion dollars. The number is less than the $ 2.2 trillion predic-

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ted for India - who thereby became the world’s seventh largest economy and equals the projec-tion of the IMF for the Italian GDP.

Fixed Capital Formation Gross - shows a sharp slowdown as investments for 2016. The loss of appetite for investment is a result of the loss of credibility in economic assumptions desalera-ção accompanied by the adoption of new BN-DES financing requests. For 2016, it anticipa-tes a slowdown in investment in the region of 30%. Over the past 12 months, consultations BNDES fell 43% and approvals fell to 38% and disbursements were 23% lower. Sign that the development bank is increasingly restrictive and with a tendency to continue to shrink. The industry that was already behaving pessimis-tically, scans the horizon even more complex, with the request of empeachment, exchange of ministers, businessmen against starting ask for an GROWING PRO AGENDA, with lower in-terest rates and no downtime Program Support

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of Investment (PSI), who understand that only become more acute recession.

In 2015, Brazil bought less international part-ners and the domestic economy is stopped, but still achieved a positive trade balance.

In 2015 there was a decrease in imports and ex-ports, the exchange rate was more expensive to import and Brazilian exports have become more competitive, as well as the national product went on to win more competitiveness in the do-mestic market.

The positive balance of trade in 2015 was $ 20 billion. I emphasize that this performance is due to the exchange rate, with the devaluation of the real (R $) by almost 60%. This currency movement also produced changes in the eco-nomy and the more positive was the reduction of the external debt of Brazil. For 2016 it is es-timated that the final balance of trade reached

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about $ 30 billion, a sign that the dynamics of the national currency against the dollar should not undergo major changes. In this scenario we also have the role of China In the Brazilian eco-nomy, which has been reducing its growth rate, which has impacted negatively on the commo-dity sector, compounded by the depreciation of the Chinese currency.

The country’s international reserves now total an amount of about US $ 280 billion, exceeding the total external debt of the country.

In 2015 Brazil lost the investment grade, won in 2008, and several qualitative research puts the country among those with the most sensitive perspectives in terms of business expansion in the world.

Brazil has made progress in reducing poverty, in-come inequality, increase real income of worke-rs, and improving social indicators. This led to

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an increase in the Human Development Index HDI - the country, placing it in the group of high human development countries and occu-pying 85th position in the international ranking in 2015.

Marked by economic and trade relations quite diversified in terms of countries and regions of the world, the Brazilian foreign policy is charac-terized by multilateralism and the search for in-tegration and cooperation with many countries. Brazil has placed great emphasis on trade ne-gotiations under the World Trade Organization - WTO, in which it has played an important le-adership role among developing countries. The country has focused also on regional and bila-teral issues, seeking to establish alliances and economic and trade agreements with several countries and regions, notably those in South America, but also with countries in Africa, Mi-ddle East, China, India, Russia , South Africa, working with more shyness with the US and the European Union.

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In keeping with its multilateralist stance and emphasizing the search for greater global social justice, Brazil was one of the organizers and one of the most active members of the G-20 group of countries which replaced the old G-8 as the preferred forum for discussion of major inter-national issues. Has taken an active position also in the various international bodies in whi-ch it participates, as the World Trade Organiza-tion (WTO), the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), the World Bank (IBRD) and the Orga-nization of United Nations (UN).

All these aspects make Brazil a widely attractive market, especially for its South American nei-ghbors, can act as a driving force of economic growth in these countries.

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It is also a very complex and diverse market, spread across a large number of large urban cen-ters and cultural profiles, income and consump-tion quite different. In addition, the production sector is quite dense and diversified, with a rela-tively small number of products for which there is no domestic production.

Three years ago the expectation was that Brazil’s GDP exceeded that of England, but the country is once again missing a window of opportunity to make investments and attract international investors with a misguided economic policy.

According to IMF data, India is the country that is expected to increase positions in the ranking of the ten largest economies in the world by 2019. The country will move from 10th pla-ce in 2014 to 7th in 2018, surpassing beyond Brazil, economies of Italy and Russia. Between so-called developed economies, the only change pointed out by the IMF data is the UK surpas-

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sing France in 2016 and occupying the 5th po-sition among the ten largest GDPs in the world.

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BRAZIL GENERAL TRENDS

The Brazil temporarily lost the beat and rhy-thm, the growth of the Brazilian economy di-sappoints four years ago, and currently in re-cessive economic crisis, the market increased from 2.95% to 2.99% the expected fall in GDP (Gross Domestic Product ) this year and cut from 1% to 0.86% growth estimated for 2017.

Economists also worsened to 8% the outlook for inflation in 2016. Now, estimate that the IPCA (Price Index Broad Consumer) will close the year at 6.93%, against 6.87% in the previous six weeks and, 80% for four weeks. In 2017, the projection for inflation was maintained at 5.20%. The index ended 2015 with an increase of 10.67%, above the government’s target cei-ling of 6.5%.

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ADJUSTMENTS OF EXTERNAL ACCOUNTS

With the adjustment of external accounts and a push of the recovery of commodity prices, Bra-zil is already free to integrate the indigestible group of countries considered “fragile 5” in re-lation to the exchange rate. In reports from fo-reign banks and information vehicles, the cou-ntry is still remembered as one of its members, but economists working in Europe consider the placement unfair.

The term was coined in 2013 by the Morgan Stanley bank and encompassed the most vulne-rable economies to rising interest rates in the United States and the strengthening of the dollar because of its large current account deficits and its re-latively high level of consumer inflation. The list includes the Brazilian real, the Turkish lira, the South African rand, the Indian rupee and the Indonesian rupiah.

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Since Donald Trump came to be rated as a real possibility in the White House, the term came back together with the dollar rush. Some emer-ging-country currencies simply stood at the mercy of betting on the resumption of the US economy.

“To call Brazil today one of the most fragile countries is an exaggeration.”

Given the new world political scenario, I think, it would be time for some substi-tutio”n, such as the exit of India and Brazil and the entry of Mexico, whose weight has felt the effects of the new American administration.

The analyst notes that the five countries were considered fragile because they had problems on their balance sheets. “The need for external fi-nancing was greater than Direct Investment in the Country (IDP) and these countries needed to go to the market to look for dollars.”

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THE COMMERCIAL SCALE

In 2016, the Brazilian current account deficit closed at US $ 23.5 billion, or 1.3% of Gross Domestic Product (GDP). A year earlier, the ratio was 3.3%. The main contribution to the reduction of the rhombus came from the trade balance.

It is not worth betting against the real, to for-ce a race against the exchange rate in the coun-try would have to take into account the interest rate, which, although the Central Bank has sig-naled that it will enter a downward trajectory, is still much higher than in other countries.

If Selic is at 11% per year in Brazil, in Mexico, for example, it is 5.75%. “Brazil is not the cou-ntry at present vulnerable. If the market choo-ses, it will be the one who is most unprotected. “

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I emphasize that Brazil suffered less from recent volatility in relation to other currencies becau-se a resumption of commodity prices was seen. “With this, there was an improvement in the performance of the countries that are exporters of metallic raw materials.”

Another favorable aspect of the country is rela-ted to the change in political percep-tion, with the allready approved of themes by Congress that will improve the country’s fundamentals, such as the Proposed Amendment to the Cons-titution (PEC), which imposes a ceiling on spending growth.

THE PUBLIC ACCOUNTS

Central government accounts (National Trea-sury, Social Security and Central Bank) closed another year in the red and ended 2016 with a

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primary deficit of R$ 154.255 billion. The re-sult was the worst performance in the whole his-torical seri-es, started in 1997, but it had a gap of R$ 16.2 billion in relation to the target that foresaw a negative balance of up to R$ 170.5 billion in the year.

Consolidated public sector accounts accumula-ted a primary deficit of R$ 155.791 billion in 2016, equivalent to 2.47% of the Gross Domes-tic Product (GDP), the Central Bank said. This is the worst result for a year in the BC histori-cal series, which began in December 2001. In December, the consolidated public sector had a pri-mary deficit of R$ 70.737 billion, the se-cond worst result in the historical series for De-cember.

The government’s forecast, contained in the Bu-dget Guidelines Law (LDO), was a deficit of R$ 163.9 billion for the consolidated public sector in 2016. In the case of 2017, the projection is a deficit of R$ 143.1 billion .

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In 2015, the accumulated deficit was R $ 111.249 billion (1.85% of GDP) and, in 2014, R$ 32.536 billion (0.56%). The consolidated public sector brings together the central go-vernment (Social Security, Central Bank and National Treasury), states, municipalities and state-owned companies, with the exception of Petrobrás and Eletrobrás.

The primary result for 2016 was within the ran-ge of the survey, indicating a primary deficit be-tween R $ 160.3 billion and R $ 149 billion, but above the negative median of R $ 153.650 billion.

The fiscal deficit in 2016 can be attributed to the rupture of R$ 159.473 billion of the cen-tral government (2.53% of GDP). Regional go-vernments (states and municipalities) showed a surplus of R$ 4,666 billion (0.07% of GDP) in 2016. While the states recorded a surplus of R$ 6.787 billion, the municipalities had a negati-ve ba-lance of R $ 2.121 billion . State-owned

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companies recorded a negative result of R$ 983 million in the period (0.02% of GDP).

The main challenge for the coming years is to grow at a higher rate and more sustainably. There are important issues to be addressed, is in fiscal policy, either in monetary policy, but the main thing is the acceleration and expansion of economic activity. This equation will only be ef-fectively resolved through increased investment rates and improving productivity. The problems that must be faced in the coming years in Bra-zil are much simpler and easy to be corrected than the great struggle against inflation of the previous governments, the introduction of a new currency and the adoption of new founda-tions of economic governance. The fact is that we have to restore full employment, the service sector runs relatively better than the industry and trade, credit will grow back when trying to accelerate the economy; the inflation ghost re-turns to haunt the company, this time hand in hand with the current account deficit. Another

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serious problem is the worsening terms of trade (the ratio of the export price and import), whi-ch should have an impact of increased external leak, Brazil lost ground in world trade in goods and looking at this matter forward I think that exports of commodities likely remain low, given that the expansion of investment in China is ex-pected to decrease and most of the raw material prices will decline in the coming years. For the manufacturing exporters the results of perspec-tive should be much better, given the exchange rate that favors exporters.

In the short term solution for investment lies in infrastructure and new concession model that is expected to increase private sector investment rate not only in Brazil but throughout Latin America. Brazil should create a more friendly business environment and reduce the uncertain-ty of foreign trade policies affecting the interest of investors, who generally look beyond profit stability.

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Brazil is a nation that, by type and size, has an opportunity to play an important role in the global economic environment. The downturn in the economy is not good news, but fulfilling the estimates, they point out that there are re-newed growth expectations, improvement in government accounts and control of inflation targeting from 2017.

Brazil has competitive advantages in forestry, food production and biodiversity despite the current challenges, the country can not help but look to the future and forget their advan-tages and recent achievements such as universal primary education, the system of evaluation of education, the implementation of the unified health system, reducing deforestation, the in-clusion of blacks and poor in universities, com-bat poverty policies, and fiscal responsibility law and the functioning of institutions to com-bat corruption. This set of achievements makes Brazil an interesting and promising country.

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Brazil is a young country that will mature, im-posing the need to build for the population that will need greater investment in public health.

Brazil’s agenda is full of emergencies, live in a constant twists scenario. The country needs an alliance modernizing to overcome this moment. The country needs a long-term project.

The increase in household consumption capaci-ty was an essential part of the country’s growth process, the problem is that the model adopted was founded in credit and consequently the in-crease in household debt, which is unsustainab-le in economic and financial terms.

The fact that we built a more inclusive econo-mic movement, was very well received and ca-pitalized by entrepreneurs, who were able to en-joy and launch different products for different segments of income. This model demonstrated that there are limits and ultimately failed.

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The year 2015 began with economic recession and inflation, fiscal deficit crisis in Petrobras, federal police investigation against corruption by placing important businessmen in jail and suspected involvement of dozens of leading po-liticians, this whole environment compounded by political uncertainties and finally by offside request of President Dilma Rousseff.

Initially, the federal government tried to blame the external crisis and the fact that the main po-tential have not yet reinstated the crisis of 2008. The decisive factor was the mistakes of econo-mic policy in what they termed as “the new eco-nomic matrix” had decreed death for bankrupt-cy multiple its premises.

To combat inflation, the government fumbled and ended up using the worst of medicine, hol-ding the prices of items controlled by the state and reducing artificially the price of electrici-ty. While the value of a barrel of oil reduced around the world, in Brazil the price of fuel rose

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to restore the Petrobras box. The result of this equation is the lack of inflationary targets, the economic slowdown and recession.

Another adventure of this government was the distribution of benefits and subsidies to some companies and countries without any criteria and without transparency, which some call ca-pitalism ties. Currently these benefits and sub-sidies are investigated by the Federal Police in the Zealots operation that clears suspicions of corruption in the conduct of three provisional measures and bribes to members of Carf (Board of Tax Appeals) board that is linked to the Mi-nistry of Finance who judges fines of resources applied by the IRS. The Zealots operation esti-mates that US $ 16 billion left to be received to the public coffers between 2005-2013.

In the first term of President Dilma Rousseff, he was lenient in controlling inflation targeting and re-election, made the grave mistake of ma-nipulating the economic performance indica-

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tors, changing the rules to account for expendi-tures and revenues.

With leniency in managing inflation and dou-btful accounts, it was difficult to know where the country really is, making it more difficult to map the exit routes. When the government found errors, it took too long to react and the emergency measures did not have political and popular backlash, making the most dangerous interventions.

To balance the public accounts, the govern-ment needs a fiscal adjustment of R $ 60 billion approximately and should seek increased reve-nue through credit taxation, the increase in PIS, Cofins and Cide, higher taxes for the importa-tion of goods and goods, reducing the correc-tion of income tax and try to approve the return of the tax on financial transactions, the CPMF. Other lines of alternatives would be the moder-nization of the social security factor, the search for a fiscal adjustment by reducing the size of

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government, as well as building a more decent and competent State.

Brazil will overcome this crisis and more to come, and reach higher levels of development, with a richer population, less inequality and ac-cess to health care and quality education. Brazil is the country with the greatest biodiversity in the world, with land and water in abundance.

The global climate is changing and this will af-fect all aspects of life and economy on earth. The domestic market is large and broad, stable currency and the entrepreneur has tenacity and entrepreneurial flair.

Over the years the corrections will be made, the main obstacles to competitiveness and integra-tion into the world will come from. The priority list is extensive, and the list of tasks, there are good projects in progress and advantages unex-plored. In the short term, the way of alternatives

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to Brazil is going through a road with quick-sand, the more time standing still, the deeper grows the crisis and more attached to the pro-blems will be. Go through this path is irrever-sible.

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NATIONAL GOVERNMENT

The impeachment of President Dilma Rousseff has been consolidated, there rema-ins doubt in the way that history will register its cassation/repeal. She went out the back door, being eter-nalized as incompetent and perhaps as corrupt and claiming to be the victim of a parliamentary coup.

Dilma Rousseff claimed during the whole pro-cess of cassation/repeal, not to have committed a crime of fiscal responsibility and could not be ordered to lose her mandate. In the political field claimed to be the victim of traitors, bad losers and thieves. Finally, the year 2016 closes the curtain with the mark of exceptionality. The president of the republic fell, Senate President Renan Calheiros swung. The ex Câmara Presi-dente Eduardo Cunha is in prison. The current Câmara President Rodrigo Maia is being accu-sed of corruption. No one is able to predict what

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2017 re-serves for the surviving politicians, who will be arrested and who will be free to tell the story.

In 2017 the former millionaire Eike Batista was arrested and it seems that this year the powerful ones began to suffer in Brazil.

HORRIVAL YEAR

Three testimonies, a coercive conduct and five denunciations later, former Presi-dent Luiz Iná-cio da Silva - Lula, ended the year 2016 with great difficulty convin-cing the world that he remains “the most honest living soul on the pla-net.”

The majority of the Brazilian population won-ders, which will arrive first, the 2018 election or the Justice?

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LAVA JATO OPERATION

Actions of administrative impropriety of the Fe-deral Public Prosecutor’s Office (MPF) and of the AGU (Federal Attorney General’s Office) in Federal Court in Paraná request that accused of participating in the scheme of corruption disco-vered in Operation Lava a Jato return some R$ 26 billion To public coffers.

There are 12 civil actions related to Lava Jato: eight by MPF’s task force in Paraná, three by AGU and one by the Public Prosecutor’s Office of Rio de Janeiro. These processes are the for-mer directors of Petrobras, operators, contrac-tors and politi-cians, such as former federal de-puty Eduardo Cunha (PMDB-RJ).

The actions of improbity are equivalent in the civil area to the criminal actions of Lava Jato, sin-ce by Brazilian law companies are exempt from criminal liability. “They are an important front

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line for Lava Jato,” Attorney Deltan Dallagnol, coor-dinator of the Lava Jato task force in Para-ná. Only 38 people and 12 companies are res-ponsible for the actions taken by the task force.

WHAT DOES ODEBRECHT DELIVERY APPROACH MEAN?

The facts related to Operation Lava Jato directly and indirectly faced the rights and interests of the Union, which justifies and imposes the need to bring actions of impropriety,” say the lawyers of the Union in the three actions authored by the federal agency.

In the actions of impropriety, the nature of the process is civil and administrative, and the main objective is reimbursement to the treasury. Among the penalties provided are the loss of po-

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litical rights or the suspension of the right to contract with the public administration.

LENIENCE AGREEMENTS

Even if they are convicted in the 12 lawsuits mentioned above, it is unlikely that the defen-dants will pay the total amount of R$ 26 billion charged to the lawsuits. This is because part of the accused companies has already entered into a leniency agreement with the MPF. In them, the companies undertake to pay certain amounts as compensation, which would, in theory, prevent a similar charge for actions of impropriety.

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This is the case of Odebrecht, which in Decem-ber signed a leniency agreement with the MPF. The contractor committed to pay a fine of about R$ 7 billion to the public coffers of Brazil, the United States and Switzerland - of this total, R$ 3.8 billion goes to the Brazilian treasury.

For this reason, the Lava Jato task force asked the court that Odebrecht should not be subject to sanctions in the administrative wrongdoing proceeding in the Federal Court of Paraná. Still in this action, it was requested to suspend the process against the business group. The judge in charge of the case asked AGU and Petrobras to express their views on the MPF’s request.

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ODEBRECHT CONSTRUCTION THE EX LARGEST IN LATIN AMERICA

Origin and one of the group’s main sources of resources, Odebrecht Engenharia e Construção is now less than half the size of when it was in-vestigated by Lava Jato.

The company has sacked more than 50% of its 107,000 employees and its reve-nues are estima-ted at US $ 6 billion in 2016 (R $ 18.8 billion), down 57% over 2014.

The results for 2016 have not yet been closed, but the revenue projection was passed by the construction company to analysts and inves-tors. In the 12 months up to September, the la-test available data, gross revenue was US $ 10.5 billion (R $ 32.8 billion).

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With less money coming in, Odebrecht “bur-ned” $ 2.9 billion of the cash to keep its ope-rations, as the revenues were insufficient to pay the expenses. The company’s cash now stands at $ 1.6 billion ($ 5 billion).

Despite its own difficulties, the construction company is still collaborating to the rescue of other companies of the group in worse situation and has passed $ 350 million (R $ 1 billion) to the holding company.

The main problem of the construction company is the difficulty of obtaining new contracts, af-ter the discoveries made by Operation Lava Jato of the Federal Police.

Between December 2014 and September 2016, Odebrecht’s construction portfolio surpassed the record US $ 33.9 billion (R $ 105.7 billion) to US $ 21.3 billion (R $ 66.4 billion), a De-crease of 37%. In addition, more than 40% of

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the works have been carried out at a very slow pace, due to the recession in Brazil and the crisis in Venezuela and Angola - the company’s three largest markets.

“The quality of the portfolio has deteriorated, because good projects are finalized and only what delays or is not paid remains.”

The expectation of analysts and investors is that the situation will begin to improve as of this year, after the Odebrecht Group has pledged to pay R $ 6.7 billion in fines in Brazil, the United States and Switzerland.

The sealed agreement with the US authorities, however, has revealed other cases of corruption in Latin American countries. The government of Peru, for example, has already decided to bre-ak the contract for the construction of a gas pi-peline.

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DOWNGRADE

Odebrecht’s operational difficulties are wor-rying the rating agencies, which have downgra-ded their debt securities.

The default risk, however, is not immediate, be-cause the short-term debt of the construction company is low - only $ 210 million (R $ 660 million) mature in the next 12 months.

In total, Odebrecht Engenharia e Construção owes US $ 3.3 billion (R $ 10.3 billion) in the market. Most are bonds issued by a financial arm of the group, to finance the expansion in other businesses, but guaranteed by the cons-truction company.

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THE WORST ALLREADY HAPPENED

Odebrecht believes that the worst moment of the crisis provoked by Lava Jato has already pas-sed into the construction business.

The company plans to maintain the billing and the works portfolio this year. It also says it has adjusted expenses and revenues and will stop burning cash.

Odebrecht also expects to win contracts again this year, especially after its situation is regulari-zed in the countries where it operates.

In addition to leniency agreements with Brazil, the US and Switzerland, it is close to finalizing pre-agreements with Peru, Republican Domini-cana and Colombia.

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In the evaluation of the company, another posi-tive point is the recovery of the oil price, which favors the business in Angola.

The company also says it has been gradually re-ducing its exposure to Venezuela, which faces a serious political crisis.

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BRAZILIAN INDUSTRY

INDUSTRIAL PRODUCTION

Industrial production fell by 6.6% in the first half of 2016, the Brazilian Institute of Geogra-phy and Statistics (IBGE) said on Wednesday. The analysts’ expectation was a drop of 6.90% to 6.40%, with a median negative of 6.50%.

In the comparison of December to November, the index rose 2.3%, in the series with seaso-nal adjustment. The result came within the ex-pectations of analysts, who expected expansion from 0.50% to 3.50%, with a positive median of 2.65%. In relation to December 2015, pro-duction fell 0.1%. In this comparison, without adjus-tment, the estimates varied from retrac-tion from 1.30% to 2.50%, with a positive me-dian of 1.00%.

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NATIONAL INDUSTRY PERFORMANCE

The downward trajectory of the industry still shows no signs of reversal. Novem-ber produc-tion data released on Thursday (5) by the IBGE show a growth of 0.2% compared to October.

Compared to the same period of last year, there was a decline of 1.1% - the 33rd consecutive decrease in the annual comparison.

The results surprised negatively market analysts. Research indicated an average expectation of in-creases of 2% and 1.3% in the month, respec-tively.

The category of semi-durable and non-durable goods was the one with the grea-test fall in the period, of 0.5%.

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These products, which include food and clo-thing, are directly linked to household con-sumption, which still suffer from high levels of indebtedness and restricted ac-cess to credit.

Another poor performing sector was coke, pe-troleum derivatives and biofuel, whose produc-tion shrank by 3.3%, eliminating the 3% ad-vance accumulated in September and October, according to IBGE.

On the other side, the positive highlight was durable consumer goods, with a varia-tion of 4% in the monthly comparison and 9% in the annual, interrupting a series of 32 consecutive falls.

The improvement was driven by the auto in-dustry. In November, vehicle produc-tion grew 22.4%, according to Anfavea, an association that represents the automa-kers.

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This advance, however, is linked to the norma-lization of activities in the Volkswagen plants, which had been partially paralyzed because of the company’s problems with suppliers.

The most recent forecast for the Central Bank’s Focus survey is a 3.49% decline in GDP in 2016.

MARKET CONFIDENCE

There is a slow recovery trend for the industry, whose production should consoli-date in positi-ve territory only in the second half of 2017.

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RESTORING THE ECONOMY

The release of inactive FGTS accounts should have a positive impact on economic growth of up to 0.40 percentage point. The projection was made by the team of economists of the bank Santander. The institution is more optimistic than the go-vernment and predicts that close to 100% of inactive accounts - about R $ 41.4 bil-lion - will be withdrawn by the workers and much of that money will boost hou-sehold con-sumption in the coming months. It is estimated that the release of the FGTS inactive accounts will serve as a push for the still struggling eco-nomy to try to break the recession. The bank analysts estimate that the funds should boost household consumption by up to 0.7% in the months following withdrawal.

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COMMERCE PERFORMANCE

In recent years the government has made a consumer incentive policy based on household debt. The credit was extended as a normal fac-tor. All this market dynamic has been created without the care of financial education. When unemployment rose, consumer confidence we-akened and all the concept behind this model failed acutely. The economy was a moving train, who had to stop abruptly.

The economic crisis is weighing on trade and putting the industry which is one of the main pillars of the economy into a quagmire. The ef-fects of committed income, credit enhancement, soaring inflation and rising unemployment, re-duces the population’s purchasing power, which produces devastating effects on the performance of the national economy, since household con-sumption represents 50% of Gross Domestic product (GDP).

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RETAIL PERFORMANCE

Sales in the retail trade ended the year with a 9.4% drop in sales, the worst result ever recor-ded, by the National Confederation of Com-merce of Goods, Services and Tourism (CNC).

The estimate, however, improved compared to the previous expectation, of 9.8% drop in sales. According to the CNC, the change stems from the “slow slowdown in inflation and, mainly, the reaction of consumer confidence.”

It points out that retail sales, minus the seasonal effects, fell 0.3%. With decreases of -0.3% and -2.5% in the automotive and construction ma-terials segments, the expanded retail registered the sixth drop of the year, with a decrease of 0.5%. Ac-cording to the CNC, the negative hi-ghlight was the clothing and accessories sector, which registered a decrease of 5.8% in relation to the previous year - the worst result of this

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segment in this comparative base since Decem-ber 2014, when there was a decrease of 6 , 8%. Another segment experiencing significant losses was fur-niture and appliances, down 1.0%.

This crisis in commerce only will end with the recovery of confidence of entrepreneurs and consumers.

For the second half of 2016 the outlook is better, mainly due to the loss of inflation force, should provide a recovery in specialized sectors in the marketing of non-durable consumer goods such as food, medicines and fuel. Trade has been con-ducting assessments throughout the year, but the trend continues downward. The trade must accumulate a drop of 4% in 2015. And forecasts for 2016 are not encouraging. In the second half however, things should be more directed in eco-nomic and political terms, and may have perfor-mance improvements.

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SERVICES PERFORMANCE

The services are increasingly gaining importance in the Brazilian economy and should continue to put pressure on the family budget in 2016. The services sector was the last to feel the weight of the national economic crisis. The performan-ce of services in the economy had indentation, and the diagnosis of the reasons are the same as identified in the trade performance. With the downturn in the labor market and the more mo-derate adjustment of wages and unemployment, should suggest a cooling of prices charged for the services, which should determine the trajec-tory of inflation for the first half 2016.

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UNEMPLOYMENT

The unemployment rate in Brazil was 12% in the quarter ended in December 2016, according to data from the National Continuous Hou-sehold Sample Survey (Pnad Continuous) relea-sed on Tuesday, 31, by the Brazilian Institute of Geography and Statistics ( IBGE). The country recorded a record number of unemployed, with a total of 12.342 million people looking for a job vacancy. The rate is the highest in the histo-rical series (2012).

The result means that there are more 3,269 million unemployed compared to a year earlier, equivalent to an increase of 36%. At the same time, the total employed fell by 2.1% in the period of one year, equivalent to the closing of 1.983 million jobs.

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THE PERFORMANCE OF THE SERVICES SECTOR

The service sector is starting to walk out of the crisis. Despite still showing negative numbers, the improvement in performance in recent quarters suggests that the business is about to take a recovery route.

Data released by the Brazilian Institute of Geo-graphy and Statistics (IBGE), released on Wed-nesday (16), show that the quarter ended in September closed with a fall of 0.5% in sales of the service sector - result obtained in compari-son with the quarter Immediately above.

This figure, although negative, is better than the 1.1% decline in the quarter ended in June.

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The numbers also form a “stepladder” that shows this improvement in the sector’s performance. In the first quarter of 2015, the decline came to 5%. In the second, this number improved to a 4.5% drop.

In the following quarters, the results still remai-ned in the red, but improved: 1.4% decrease in the first quarter of 2016; 1.1% decline between April and June; And now down 0.5% in the pe-riod ended in September.

ECONOMIC MEASURES

Even with this improvement in performance, the data reveal that the industry has a way to go until it comes out of the recession. He also suggests that work has yet to be done, not only by the private sector, but by the government, which acts to take the country out of the crisis.

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BRAZILIAN FINANCIAL SYSTEM

The Brazilian banking system is one of the most consolidated in the world, with extensive cove-rage, regulation and efficient structures.

There is debate about the high interest rates in Brazil, and especially on the high margins of banks in lending, known economically as banking spreads.

The annual banking profits are derived largely from income derived from interest on lending, mainly for agribusiness.

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PROFITS, MARGINS AND INTEREST BANK COMPOSITIONS

There are FIVE main factors:

• Administrative expenses (spending on physical capital, personnel);

• default (prevention against bad payers);

• reserve requirements (opportunity cost of the deposit made at the Central Bank, without in-come);

• taxes and fees;

• high profit rates of activity.

In addition, the economic environment has an impact on spreads through the legal environ-ment, the risk level of the economy, the growth rate and the prime rate of the economy.

When we analyze these factors, we find that the justification of high spreads is weak, since, gra-dually, banks have achieved greater operational efficiency by reducing its administrative costs.

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SELIC RATE

The Selic rate is a benchmark interest rate, cur-rently set at 14.25% peryear. It’s defined by the Central Bank meetings periódical. Always when the government needs financial resources, he pays the Selic rate to raise funds by issuing pa-pers the Public Debt.

For the consumer, it is worth the interest char-ged by banks. The huge differences between the selic rate and the bank fees is explained by financial institutions as the risk of default and customer billing taxes. In addition, banks inclu-de the profit they hope to achieve. The result is that, for the consumer, the annual interest may reach 160% in overdraft. Or is about twelve ti-mes higher than the Selic rate.

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BANKS

Almost all the world’s major banks are in Bra-zil (HSBC was acquired by Banco Bradesco in 2015), driven by high rates of profit made by national banks sector. They typically work more aggressively in terms of costs, and the pro-ducts are absolutely like. This competitiveness is achieved by these banks are part of the mus-cle of the federal government and thus able to finance some of the most strategic sectors so almost subsided. Get credit from the banks is important.

INTEREST CHARGED BY BANKS

Money in Brazil has a high cost and govern-ment credit lines are not competitive compared

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to what is practiced abroad, even in the most aggressive countries of capitalism.

THE PERFORMANCE OF FINANCIAL CREDIT

Interest rates have already begun to fall and ex-pectations for the economy to recover are lea-ding analysts and banks themselves to bet on the resumption of credit for 2017. But the double--digit expansion is still far off and the resump-tion tends to be slow, and Drawn by lines of credit considered safe for banks - such as payroll and housing.

The vast majority of Brazilian companies have problems accessing credit due to high indeb--tedness.

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Since January, total credit has decreased by 3.2% and, even if there is an improvement until De-cember, performance in the year will continue to be negative. Analysts have forecast a decline of 2% to 5%, the worst performance since the beginning of the 2000s. For 2017 projections are up, ranging from 3% to 8%. By 2014, the portfolio expansion rate exceeded double digits.

Behind such caution is unemployment, which reached 11.6% and should remain high. Alre--ady requests for judicial recovery are on the rise (1,479 a year, up 62%), signaling that these clients will also have difficulty making new fi-nancial commitments.

Banks will focus on safer operations such as real estate and vehicle financing and payroll deduc-tible loans. These may be the flagship cars at this time of resumption. For companies, the recovery should come in operations with recei-vables from credit cards and duplicates.

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In the financing of cars and apartments, the pro-perty can be resumed in case of default. In the payroll, the payoff portion of the loan is made on the payroll and, in case the employee is dis-missed, a portion of the severance pay is used to pay off the debt. Similar logic holds true for business operations.

DEFAULT

Demand in 2016 for revolving credit and over-draft are more linked to falling income and fi-nancial emergencies. In the coming months, the expectation is of greater demand for lines linked to consumption and, at the same time, safer.

With improved confidence, more families will once again consume durable goods, and this has an impact on the credit market. This year, fa-milies gave preference to pay off debts and for

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that reason the expressive drop in volumes. That is one reason why the default rate has not risen so much, adding that the recovery of credit by companies should be slower than in the indivi-dual.

Default in the system is 3.6%, up 0.5 percen-tage points in 12 months. And that high was not only higher due to a combination of factors. Banks, knowing of the difficult year that would be 2016, restricted the granting of credit. On the demand side, companies and households in debt, or fearing unemployment, delayed con-sumption plans, running away from credit.

Even so, the default among companies rose abo-ve expectations, reaching 3.1%. After two years of recession, much of it is idle, with no need to take credit.

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THE INTEREST RATES

Interest rates on credit operations fell for the se-cond consecutive month in January, in the wake of lower interest rates (Selic), according to the National Association of Finance, Management and Accounting Executives (Anefac).

In the case of credit cards, the average rate fell from 453.74% per year in December to 441.76% in January 2017. This month’s rate is the lowest since April 2016, according to the survey. In-terest on the overdraft was also reduced, from 314.51% per year to 309.24%, and from trade, from 98.50% per year to 97.61%.

Considering all lines of credit for the individu-al, the average general interest rate rose from 8.16% per month (156.33% per year) in De-cember 2016 to 8.12% per month (155.20% per year). Year) in January 2017 - the lowest since July 2016.

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In the case of corporate lines, the general ave-rage interest rate also fell from 74.32% per year in December 2016 to 73.92% per annum in Ja-nuary 2017 - the lowest interest rate since June 2016 .

RESTRICTION OF ROTARY USE

At the end of January, the National Monetary Council (CMN) approved the rule restricting the term of the revolving credit of the credit card.

According to the standard, the rotary can only be used until the next invoice expires. If on the due date the customer has not made the full pay-ment of the invoice amount, the re-mainder will have to be paid in installments or withdrawn.

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The Central Bank said the measure aims to make the use of credit cards more efficient and cheaper. The changes are expected to help redu-ce the interest rate on credit.

Currently, the amount of the revolving credit is R $ 37 billion. It represents a small portion of the R $ 700 billion of the amount linked to credit cards.

PROJECTION FOR INFLATION

The expectation for inflation this year has mo-ved even closer to the center of the target, ac--cording to projections by economists at the Central Bank. Economic projections for 2017, however, were worsened.

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In the survey released earlier this year, the pro-jection for the IPCA high this year fell 0.06 per-centage points and reached 4.64%, the fifth fall followed.

For the next year, the median of the projections points to inflation of 4.5%, without change for the 28th week followed. The inflation target for 2017 and 2018 is 4.5%, with a margin of tole-rance of 1.5 percentage points.

PNB PROJECTION

Due to a series of positive economic indicators, the GDP growth forecast is maintained at 1% by 2017. Confirming this expectation, we eli-minate the statistical effect of a poor compari-son basis and a good sign of reversal of the pre-viously recorded losses.

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There is much that needs to be done and im-plemented so that the economy will once again show signs of full recovery.

FIDC - INVESTMENT FUND FOCUSED IN RECEIVABLES CREDITS

Are financial agents, regulated by the Central Bank, with similar obligations to banks, are specialized in business credit, prepayment of receivables and contracts. Usually the interest cobrandos by FIDC are a bit higher than tho-se charged by banks, reaching 3.2% per month, but work well when credit limits are “taken.”

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FACTORINGS

They are agents that operate with business cre-dit, but the costs are usually very high, reaching more than 3.5% per month. They are useful for companies that have restrictions on bank len-ding.

They have space in the market mainly for in-debted companies and need outside capital to finance working capital.

ANTICIPATION OF RECEIVABLES / DUPLICATES DISCOUNT

In Brazil, the entrepreneur has two documents that are issued at the time of sale of goods and services, the first is the invoice that is tax detai-ling tool and the second is the bank slip, whi-ch is the financial mirror of the invoice. Banks

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have a modality of future credit anticipation of receiving, this method termed as discount Du-plicates, whose interest can reach to more than 3% per month.

EMPLOYEE PAYROLL AS AN CURRENCY EXCHANGE

If your company is large in terms of number of employees, banks remunerate with interesting reciprocity in terms of lower interest rates or credit concessions if they are privileged with the opening and management of current accounts payroll.

FINEP - NATIONAL FUNDING

If your company have any technological innova-tion without national similar, this is the address for you to take your project. The Finep has the

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mission to promote economic and social deve-lopment of Brazil through public promotion of Science, Technology and Innovation in compa-nies, universities, technological institutes and other public and private institutions.

It operates across the innovation chain, with a focus on strategic, structural and impact on the sustainable development of Brazil.

The ability to fund the entire R & D system, combining reimbursable and non-reimbursable funds, as well as other instruments, provides to FINEP great power induction innovation ac-tivities, which are essential for increasing the competitiveness of the business sector.

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BNDES - NATIONAL BANK FOR SOCIAL DEVELOPMENT

The National Bank for Economic and Social Development (BNDES), a federal public com-pany, is now the main long-term financing ins-trument for investments in all segments of the economy, a policy that includes the social, re-gional and environmental dimensions.

For projects financially large, which means di-rect access to the coffers of the BNDES, requi-rements documents, projects and business plans are more complex and the stages of approvals are numerous and require more time and pa-tience, but they are not impossible to obtained.

BNDES stands in support of agriculture, indus-try, infrastructure, and trade and services, offe-ring special conditions for micro, small and me-dium empresas. The Bank is also implementing lines of social investments, targeted to educa-

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tion and health, family agriculture, basic sanita-tion and urban transportation.

BNDES support takes place by means of finan-cing investment projects, acquisition of equip-ment and export of goods and services. In ad-dition, the Bank operates in strengthening the private capital structure and provides non-reim-bursable financing to projects that contribute to social, cultural and technological development, being the cheapest source of credit in the cou-ntry, with annual interest rates that can reach 4%. The BNDES credit lines are also offered by other state or private banks, but with the relea-se of more limited amounts and usually for the purchase of machinery, equipment and vehicles.

BNDES has 56 years, is an important institu-tion, have missed a lot in passado.As criticis-ms are not against the bank, which has always financed the Brazilian industry by providing cheaper capital than the banks, sometimes with great benefits, but against certain policies.

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In recent years the BNDES lent too much mo-ney to companies, this is their function. In 2008, BNDES loans totaled R $ 9 billion in 2014 came to a volume of R $ 470 billion. The Lula government and Rousseff were alerted re-garding this folly, but both ignored the warnin-gs. The BNDES started to lend money as a part-ner, or lender, and this practice has proved very harmful. BNDES loaned money to the wrong companies and non-transparent criteria and the worst is that it was funded with debt. The Tre-asury issued bonds, increased public debt, emr-pestou to BNDES for a lower rate than paid to its lenders and the bank also gave credit with subsidized rates. The cost of these transactions are not accounted for, but who will pay this bill is the taxpayer.

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SERASA

Serasa means - Banks Service Centralization. The Serasa is a Brazilian private company that does research and analysis of economic and fi-nancial information of the people, to support credit decisions, such as loans.

Serasa was created by banks in order to centra-lize information and make their administrative costs lessened and also decrease the margin of error for the information to lend credence to people. Serasa provides business consultations on their customers, direct and indirect.

Serasa verifies that the individuals listed in its database, that is, when a person is some value to a business establishment, Serasa then includes the person on that list, and you can then pay to the query that database.

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Serasa then disseminate the information to their members, especially banks and shops, and if the name of an individual to be included in the da-tabase, only after payment of the debt, the bank may request deletion of the name of this data-base .

If a company appears in SERASA list, it means you are without access to credit, until his name skirt registration.

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THE POLITICAL ORGANIZATION

To govern the country are required: one Presi-dent and one Vice President, 31 ministries, 31 ministers, 03 powers (executive, legislative and judiciary), 32 political parties, 1 President, 1 Vice President, 27 governors, 81 senators, 513 deputies (federal and state), 5,570 mayors and 56,810 councilors, 200,000 federal commissio-ned positions and 35 political parties, and only the existence of eight parties would be sufficient to represent all currents of opinion in the cou-ntry.

In this way, we realize how much can be com-plex and challenging task to politically manage a country like Brazil. In the case of the Sena-te, the government needs 41 votes for approval, and the House of Representatives needs at least 257 votes, which makes voting a true counter business and concessions.

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In this environment and organization easy a ru-ler end up becoming a hostage of a parliamen-tary base that can put first their personal, regio-nal and electoral interests. To govern a country like Brazil is necessary to have the majority of votes in Congress, so the conspiracies, conces-sions, favoritism, “mensalões” find fertile envi-ronment for the proliferation. If there are no reforms and modernization in the architecture of national political organization, no different from a new ruler can do, your performance will be symmetrically similar to the others soon will become a hostage of the “circumstances”. Ima-gine that to be approved a policy reform will require the votes of the politicians involved in the system does not give us a satisfactory pers-pective on the changes.

In 2015, two political parties were founded and the Judicial Supreme Court decreed the end of the contribution privata political elections. It was a blow to the political class, but this change

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can produce a climbing cash crimes 2, which today have quite lenient court sentences.

Brazil started in 2016 with various political un-certainties, but we are sure that even with the most dramatic changes in the political scope, are to take place within the constitutional rules.

The domestic political environment is nervous, but it’s not a scam environment or authoritaria-nism outbreak.

The political situation in 2016 is to establish a consensus to guide the country to the resump-tion of sustainable growth.

There is widespread dismay in Brazil in rela-tion to the federal government and politicians, mainly because they are inefficient both in iden-tifying and in the solution of the problems that afflict the majority of Brazilian society.

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The Brazil will undergo several political refor-ms, even because one is just not enough. The governance model is flawed and severe disabili-ties, the current model is sold out, but this in no time endangers national democracy.

CORRUPTION IN BRAZIL

Corruption is inherent in any form of govern-ment phenomenon, whether democratic or des-potic, in rich or developing countries.

PRIVATE CORRUPTION

It is misleading to think that the practice wins this nomenclature only when it comes to large corporations or government agencies. Private

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corruption is present in attitudes of our every-day life, such as embezzling money from the condo, evade a tax, paying extra to have a ser-vice done before the legal time, bribing a traffic policeman to avoid a fine or pay for a best place on restaurant row.

In the latest ranking of corruption, organized by Transparency International and released in De-cember 2014, Brazil is in 69th position among 175 countries. The ranking measures the per-ception of corruption index. To calculate the note that defines the position and will of 100 (least corrupt) to zero (most corrupt).

Brazil appears behind countries such as Uru-guay and Chile (both in 21st place), Botswana (31) and Cape Verde (42). Denmark maintai-ned first place in the ranking with a grade of 92, followed by New Zealand (91); Finland (89), Sweden (87) and Norway (86). At the other end of the table, Somalia and North Korea appear last with eight points.

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In addition to the low levels of corruption, Denmark, Finland, Norway, Sweden have so-mething else in common: invest in high educa-tion. There is a relationship between corruption and education.

POLITICS CORRUPTION IN BRAZIL

In Brazil, much of the perception that we are a corrupt country is due to successive political scandals of public money deviation and impu-nity of those involved in most cases. There ari-ses another “maximum” of common sense: that “power corrupts”.

The frequency of complaints and the lack of pu-nishment created an image that politics here is necessarily corrupt. For scholars, this notion is misleading and contributes to corruption is ac-cepted almost natural way, that is, if you have

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been elected to public office, since it is expected that you are not honest.

Among the most common corrupt practices in politics are nepotism (when the ruler chooses a relative to hold public office), patronage (vote buying), embezzlement (money or public goods diversion for their own use), two box (accumu-lation of unaccounted funds), influence ped-dling, use of “oranges” (companies or indivi-duals that serve as a front for illegal businesses and activities), fraud and works tenders, sale of sentences, administrative corruption and illicit enrichment.

For many, corruption is a moral and cultural factor. Change this behavior would only be pos-sible with mechanisms of control and supervi-sion that restrain or reduce the conditions for corrupt practices. Today corruption is not just a moral issue, but understand the scenario that allows it to be so frequent is critical.

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“It is not the man who shapes the environment, but the environment that shapes the man. Are the material conditions that govern interactions between people that determine the greater or lesser propensity they meddle in dishonest ma-chinations. According to this perspective mat-ters very little whether an individual is honest or dishonest. What matters is that, if the subject is dishonest, the conditions under which it acts leave you little room to act dishonestly.

CORRUPTION CONTROL AND INSPECTION

In Brazil, the regulatory agencies began to emer-ge especially after the constitution of 1988. To-day, the state has several institutions of control and oversight of government activity, as TCU (Federal Audit Court), the Audit Courts of the

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States and several municipalities, and the CGU (the Comptroller General), established in 2003.

TCU has the function of controlling public spending. The rulers are accountable to the body on their spending decisions. The prose-cution also receives complaints and makes the judgment about criminal and civil remedies for improper conduct by the prosecutors.

Another tool is the Law 12,846 / 2013, known as anti-corruption law. Of non-criminal charac-ter, establishing and regulates objective and lia-bility of companies for the commission of acts of corruption against national or foreign gover-nment. Already the Clean Record Law, which entered into force in 2010, prevents candidacy in political elections with convictions for col-lective bodies, an important step for ethics in politics.

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The Law on Access to Public Information (Law 12,527 / 2011), which states that every citizen has the right to examine documents produced or held in custody by the State, provided they are not protected by confidentiality or refer to personal information also serves to monitor go-vernment spending.

But beyond the law, we still have to develop the habit to investigate and monitor the activities of public office holders with the help of these me-chanisms. In Sweden, for example, information access law has existed for 200 years, and is now a routine part of citizens, who see in law an ally in the fight against corruption.

And even with these various mechanisms, the-re are many cases where the gaps in justice and law allow politicians and companies involved in scandals are not punished or meet short period in prison, receive benefits in exchange for in-formation and are not banned from public life.

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There arises another famous expression: “Brazil is the country of impunity.”

Although much talk today that corruption in Brazil is more widely reported than in the past, without the proper punishment of those invol-ved is as if nothing adiantasse aware of illegali-ties. If today denounced more, maybe it’s time to move on to times which also punishes more.

Corruption involves moral factors, the absence of punitive measures or compliance and, in the case of Brazil, in a relative way it is a cultural issue. As described by anthropologist Sérgio Bu-arque Netherlands in the book Roots of Brazil (1936), the Brazilian would have developed a historical tendency to informality, which would be reflected in its relations with other individu-als, institutions, laws and politics.

Today, to better monitor spending in public ad-ministration, the state has several institutions

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of control and oversight of government activity. However, Brazil still denounce more than pu-nish those involved in corruption scandals..

THE PUBLIC OFFICES

Like many countries, Brazil has under its ad-ministration and control companies in strategic sectors such as energy, oil, mining and others. The government machinery has been histori-cally much more extensive, intense and present, but with the movements of privatization, con-cessions and PPP projects that form a partner-ship between the public and private sector, the state managed to attract world-class investors and should be able to equalize the accounts and public deficits ultimately may re-invest in pro-jects of social and economic scale, at least that is what we have been repeatedly told several times.

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The Brazil errs and endangers its strategic asset when you put in the basket of potential trade and political negotiations, the positions for ad-ministration of what is public.

It is very normal terms chairmen of public com-panies or mixed economy running without any professional skills, no experience in management and administration or without both preliminary and qualifying skills. Thus, what is strategic is in the hands of unprepared and often inept to work. This does not mean that a politician who is taking ahead of a public office has the free-dom to take isolated or business decisions whi-ch aim to benefit their interests or this or that political party.

The reasons political positions in public enter-prises are played hard is the fact that they provide opportunities to help “this” or “that” company in exchange for various favors and / or public funds diversion diverted to political campaigns or into the pockets of those involved. In this en-

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vironment, the patronage and the collusion are intense and only harm the overall performance of Brazil.

BRAZILIAN AUTO INDUSTRY

One of the sectors that suffered the 2016 cri-sis was the automobile industry, which had its worst performance since 2008. There were em-placados 2:57 million vehicles, representing a decrease of 26.6%. There is no prospect of im-provement in the short term.

The industry has been under pressure for the loss of sales in scale, the exchange rate, inflation, tax increases and the cancellation of benefits and government subsidies. There is no antici-pated increase production out, what jeopardizes the sector’s workforce, which cut about 28,000 jobs, and there is still an army of workers away

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from their jobs and others working with the re-duced charge.

The federal government launched a protection program for employment, in which the com-pany agrees not to lay off employees and in re-turn the government help in paying the salaries of employees. This program not only covers the auto industry and has been extended to the en-tire national business sector.

Most investors in this sector will continue to in-vest, even though the recovery will not occur in the short term and it is estimated that in 2016 will be about 2.2 emplacados vehicles (light tru-cks and buses).

The auto industry bets on the nationalization of the components in order to circumvent the ex-change rate and the high dollar, and perhaps the return of a former national project requirement for fleet renewal, removing “old” vehicles and

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are dangerous on the roads and re-boosting the market of the automotive industry.

RE-OPENING TO THE WORLD

An alternative to ending the crisis is at the ope-ning of Brazil to the business world. Brazil re-mained closed in the last year, did strong trade agreements with the US, Europe and Asia, now the exchange rate is helping, has no market. The entrepreneur should be is providing opportuni-ties better this time. The adjustment in foreign trade must generate a very positive impact on the domestic market to restore growth and bet-ter employment rates, these conjugates facts with a very small external deficit and high fo-reign exchange reserves make it the right time to accelerate a priority agenda to increase the exports.

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The fact is that Brazil will hold its trajectory in the XXI century in a faster, troubled world, with new paradigms, major technological bre-akthroughs, climate change and geopolitical surprises.

The reality is that no one will wait for Brazil and world leaders are making decisions to acce-lerate progress. Brazil needs more open to doing business globally, we too closed.

After so many years fighting against the dic-tatorship, hyperinflation, earning billions in financial reserves, consolidated democracy, di-versified economy, promoted the emerging cou-ntry, Brazil in 2015 receded.

The country has to have the maturity to look its flaws and opportunities, we have comparative advantages that should be well used when we have the opportunity to achieve development with inclusion and overcome the current chal-

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lenges. Brazil has a market size, biodiversity, lar-ge economy and democracy. We have to move this country forward.

BUSINESS GENERAL ENVIRONMENT IN THE LONG TERM

In general, expectations remain positive about Brazil and favorable predictions about the futu-re of our economy (in the medium term). Most entrepreneurs believe in solving short-term agenda of issues regarding the return of growth and the generation of greater opportunities in the coming years.

Especially among the 40 million people who have left poverty in the last decade, their belief in the future remains firm. This resulted in the large consumer confidence.

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A decade of sound fiscal management left Bra-zil in a financial position that can give envy to developed countries. Brazil’s foreign debt is just under 40 percent of GDP, and that number has steadily fallen in recent years, mainly due to ex-change rate issues.

Part of the relatively positive position of Brazil is due to favorable demographics, with a median age of 29.6 years, compared to 37.1 in the Uni-ted States and 43.8 in Italy. Brazil may inevita-bly face financial dangers of an aging popula-tion, but it must still take two or three decades.

Brazilian companies in various sectors have shown better results than the world average, especially when compared to the Brazilian sub-sidiaries located in more traditional markets. There is a growing international companies in-terested in entering the Brazilian market or ex-pand their operations in the country.

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BRAZILIAN CAPABILITIES FOR INTERNATIONAL ATTRACTIVENESS

The attractiveness of a country can refer to the attraction capacity exerted by their social, cul-tural model or geographical features; by its eco-nomic dynamism, diversification and stability; or even by more specific elements such as the presence of a group of competent private com-panies, a higher level of innovation and, no less important level, a friendly tax regime and invi-ting the capital, these would also be the prero-gatives and initial demands for the investor and the inner entrepreneur.

Highlight some pillars of Brazil’s attractiveness in order to point out the basis of development where there is the Brazil and the areas where the country needs to invest to consolidate as a hub for investments and attractive business.

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THE MACROECONOMIC ENVIRONMENT

A continuous and steady economic growth and low uncertainty on interest rate levels or the exchange rate are examples of conditions that underpin the development of investments and businesses in a country. By 2014, Brazil stood out positively, today being the eighth economy in the world, expected to rise to fifth by 2030, so that there is much to be done in terms of planning short, medium and long term.

The domestic market has been strengthened by the increase in the share of economic class with purchasing power: classes A, B and C accounted for 55% of the population in 2002 and now re-present 69%;

To make primary surplus the government has to do with the dynamics of revenue growth rate is higher than the growth rates of spending. It

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implies also that the intention of increasing re-venues by increasing taxes for society depends on GDP growth. Now, predicting that GDP will be negative in 2015, a partial derivative, it is expected that revenues decrease, given the current rates, which in turn compromises the fiscal result. On the expenditure side, also with the possibility of negative GDP for 2015, for partial derivative, it is expected that the govern-ment reduce the growth rate of spending on pri-mary surplus target environment. But when it comes to reducing the growth rate of spending in recessionary macroeconomic environment, the measures become unpopular, either for ci-vil servants, judges, Congress, Senate, unions, retirees, pensioners, states, municipalities, etc. . Enter the political issues and the electoral cam-paign commitment with the people who voted for the continuity of power to the detriment of the offer given by the parties of the situation. With the reduced fiscal space in output grow-th model environment based on consumption, inflation added negative GDP above the target,

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it remains possible spending cuts in public in-vestment in infrastructure and growth accelera-tion program, to try reach the result of primary surplus.

Well, with magnifying glass in the Brazilian ma-croeconomy in 2015 and with horizon answers to 2018 (new elections), and knowing that me-asures in the economic sphere, by definition, must be appropriate to the main political ob-jectives of longtime federal government to man-ter- in power, I ask: why observe the recent contractionary monetary policy of the Central Bank of Brazil and the recent attempt of fiscal contraction by the Ministry of Finance with the support of the Ministry of Planning, Budget and Management?

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INSTITUTIONAL ENVIRONMENT

Despite the troubled political and economic en-vironment and investigation of the Federal Poli-ce and the Public Ministry in progress, institu-tions are fully operational. A solid institutional environment ensures the stability of the rules of the game, the speed and efficiency of doing bu-siness and is an indispensable condition for the attractiveness of a pole. The Brazil achieved im-portant milestones in this pillar, consolidating its political and institutional system. The capa-city of a country like polo, especially in relation to other centers, also resides in a state of solid right in the possibility for economic agents to quickly fulfill their obligations, and the trans-parency and efficiency of administrative pro-cesses. Here, Brazil stands out as a consolidated democracy for over twenty years, including re-cognized to be at a level similar to that of the United States, France and Britain, according to the World Bank’s ranking on political stability;

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Despite the social demonstrations that took ac-count of the worldwide news in 2015, we hi-ghlight the absence of ethnic or religious in-ternal conflicts and also the lack of actual or potential conflicts with neighboring countries in the region. Institutional frameworks that de-fine national borders are well-developed and pe-acefully;

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TALENT AND HUMAN CAPITAL

A set of sufficient talent both in quantitative and qualitative terms, a strong alignment be-tween academic skills and the needs of the labor market, and the ability to attract experts from outside the country are some of the requirements to be met by an applicant to international polo. Here, Brazil stands out positively for having de-mographic availability of economically active population: Brazil is the largest economy in ex-pected growth and human potential has enough to meet the highest rates of growth.

PHYSICAL INFRASTRUCTURE

Multimodal transportation options that allow the entry and exit pole and the inner drive, and competitive access to a telecommunications ne-

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twork performance and costs are evident ele-ments between success factors of a pole. In this dimension, Brazil is positively in some ques-tions, such as the large telecommunications co-verage, especially in urban centers. The level of access to water and sanitation in urban areas is comparable to that of other developed nations.

FINANCIAL INFRASTRUCTURE

The presence of qualified financial interme-diaries, continued access to various sources of financing and the existence of instruments to mitigate risks directly help the development of a center of investment and business. Brazil has se-veral strengths in this dimension: the regulation of the financial system is recognized worldwide as a reference; Despite the momentary restric-tion of access to credit, availability of financial resources for businesses, typically through the

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use of credit for corporate and capital markets; a negotiation model and centralized record of leading international derivatives; the financial system is strong and profitable, with the last five years one of the greatest creations of sharehol-der value in the world. Brazil is going through a difficult time, and proved to be vulnerable as imagined.

International reserves exceeded the symbolic mark of $ 300 billion, according to the Central Bank. It is the first time in US history that the volume of international currency reaches this level. The exact figure, released by the Central Bank, is US $ 300.271 billion, more than half a trillion reais.

The increase in reserves sells to the internatio-nal financial community, the internal liquidi-ty strengthening image and gives support for dealing with crises such as speculative attacks against national currency or as the crisis that hit the world’s economies from September 2008.

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But keep this significant volume of reserves, however, it is at a cost of high load, it increased the public debt by about $ 24 billion last year with the issuance of securities and the conse-quent payment of commission fees.

COMMERCIAL CONNECTIVITY

A heavy flow of trade in goods and services, ca-pital movement and people are crucial to conti-nuously foster a center of investment and busi-ness. As positive highlights of the current stage of international connectivity in Brazil and Latin America can be cited: the country leads to at-tracting foreign direct investment in Latin Ame-rica. There is already free in accordance residen-ce involving Brazil, Argentina, Chile, Uruguay, Paraguay and Bolivia, and may also be expanded to other countries.

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COUNTRY EXTERNAL IMAGE

The external perception of the general condi-tions of a country is an important asset for the consolidation of a pole, in particular to attract talent and companies. Brazil has highlighted the positive image in multiple rankings of cultural, tourist and hospitality aspects. The ranking of the best cities to do business in Latin America points Sao Paulo and Rio de Janeiro in 3rd and 5th places respectively.

However, this was the point where Brazil lost the most in recent years.

REASONS TO INVEST IN BRAZIL

First, the infrastructure is old and in full ob-solescence and should encourage new invest-

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ments. The resumption of economic growth, the relative resistance to the effects of the global economic crisis, the occupation of the first glo-bal positions in production and export and food raw materials, increasing the population’s qua-lity of life and, consequently, the evolution of export market they are positive indicators that illustrate the current situation of the nation. The country is a giant on the continent and is expected to grow even more sustainability in the next decade, strengthening its links with the major economic powers. The emerging view is to consolidate Brazil as a regional center for in-vestment and business, with global connectivity. It is natural that the country follows this path, developing its foundations and thus expanding its global projection in line with its growing role in the world.

Other countries with similar potential lost their window of opportunity. Success requires public--private strategic coordinated action in the long term and on multiple fronts, including impro-

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ving infrastructure, simplifying the tax system and bureaucratic regulations, education develo-pment, increased international cooperation and the private sector consistent with the desired in-ternational insertion.

By dawn on the world stage, Brazil has also ob-tained thus important position in Latin Ame-rica. With 40% of all the territory and 35% of the population, the country accounts for about 40% of the regional GDP and also excels in the share of trade flows, capital and business and is already recognized as one of the most important poles of region.

The country needs to take advantage of this negative moment, consolidating its position to recognize and promote their strengths, identify and address its shortcomings and promote fur-ther economic integration with the world.

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Brazil must overcome this crisis stage and stop being just the promise of “country of the futu-re”, it is necessary to ensure the transformation of Brazil into a country of services and into a center for investment and business.

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HIGHLIGHTS OF THE NATIONAL ECONOMY

The infrastructure has a lot to develop, our deficiency in this area is an alternative to the solution of the macro economic problems. We invest where we have an important motivating factor to create jobs and boost the economy.

The surplus of agribusiness increased from $ 10 billion to $ 90 billion in the last 10 years. No country has more available arable land than Brazil.

Brazil’s harvest of cereals, legumes and oilseeds closed 2015 with a production of 209.5 million tons, exceeding by 7.7% in 2014. As for 2016, the third prognosis indicates a production of 210.7 million tons, exceeding by 0.5% the number 2015.

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The estimated area to be harvested is 57.7 million hectares, with high of 1.8% in the area harvested in 2014 (56.7 million hectares) and a reduction of 14,711 hectares compared to the forecasts of the previous month. Together, the three main products of this group (rice, corn and soybeans) accounted for 93.1% of the fore-cast production and accounted for 86.3% of the area to be harvested.

Compared to 2014, there were increases of 6.1% in soybean area and 0.8% of corn and 8.4% re-duction in the rice field. In production, there were increases of 1.1% in rice, 11.9% in soybe-an and 7.3% in corn.

The interior of the country should continue to grow above average mainly due to agribusiness.

Education will continue to grow faster than GDP in Brazil because people now are better able to study. The entire health sector will also

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grow at a faster rate than the average of the Bra-zilian economy, including hospitals, laborato-ries, pharmacy chains and health plans. What the government fails to deliver and generate opportunities for the private sector profit;

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51 REASONS TO INVEST IN BRAZIL

1. It is the fifth largest market for mobile pho-nes and home computers in the world.

2. It is the world’s largest exporter of beef and chicken and the fourth largest pork exporter.

3. It is the second world exporter of soy com-plex (grain, meal and oil).

4. It is the world’s leading exporter of sugar and orange juice.

5. It is the fifth largest market and the sixth lar-gest producer of vehicles.

6. It is the world’s largest exporter and the se-cond largest producer of ethanol.

7. It is the world’s second largest iron producer and the third largest producer of bauxite.

8. It is a world leading producer of eucalyptus pulp.

9. It is the eighth consumer market in the world.

10. It is the third consumer market for cosmeti-cs in the world.

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11. Has the fourth portfolio tankers ordered in the world.

12. It has an area of 8.5 million square kilome-ters.

13. It has 187 million inhabitants and an econo-mically active population of 100 million people.

14. annual population growth of 2.5 million pe-ople.

15. It is a gateway to Mercosur.

16. It has borders with ten countries: Argenti-na, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay and Vene-zuela.

17. it occupied the seventh place in the economy in 2014, according to the World Bank.

18. It accounts for half of the South American economy.

19. It has the largest and most diversified indus-trial park in Latin America and the Caribbean.

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20. It is the world’s leading producer of regional jets and fourth largest producer of commercial aircraft.

21. It is the world’s largest producer of coffee, orange and guarana.

22. It is the largest producer of sugarcane, along with India.

23. It houses the largest forest based industry in Latin America.

24. It is one of the largest producers and expor-ters of raw and processed mineral products.

25. It has large deposits of manganese ore, tin and gold.

26. It is one of the largest producers of biofuels.

27. Takes the seventeenth place in the world ranking of oil reserves and appear in eleventh position among the largest producers in the world.

28. It has vast coastline, with several harbors.

29. It is one of the largest producers of food.

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30. It has the largest commercial herd in the world, more than 198 million beef cattle heads.

31. It is the second largest producer of organic food.

32. It is the third largest producer of fruits.

33. It is the third largest producer of GM foods.

34. It has one of the most modern telecommu-nications systems.

35. Holds the most modern and advanced banking system in the world.

36. Holds the durable goods production that stands out as one of the fastest growing and have a very positive balances in the country.

37. It has modern and competitive textile in-dustry, accounting for 4.9% of total Brazilian industrial GDP.

38. It is the country that has free space to ex-pand its agricultural frontier and has the largest area of arable land in the world.

39. It offers excellent infrastructure for tourism.

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40. Receives over 5 million foreign tourists per year.

41. It is the third largest producer of footwear, with a highly competitive leather industry.

42. It is the third in world production of soft drinks.

43. It has the fifth largest rubber industry and ranks second in the world ranking of tire retre-ading.

44. It has the seventh largest chemical industry in the world.

45. It is the eighth largest producer of steel (27 million tons per year).

46. It has the tenth largest paper and pulp in-dustry.

47. It is peaceful and multiracial.

48. Respects the immigrants and their beliefs.

49. Live in the democratic regime.

50. It has stable public institutions such as the Chamber of Deputies, the Senate and courts.

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51. It is free of conflicts, defends international law and promotes peace and progress among na-tions.

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20 BUSINESS OPPORTUNITIES

I selected some business opportunities that have a positive outlook for 2016/2017, noting that I do not intend to make performance predictions of this or that sector in particular, but to help with a vision of what my craft taught me that to obtain positive results we depend on the quality of the map to follow to reach the goals set.

1- MILLIONS OF MARKET CONSUMERS

The wealth of emerging countries will in the co-ming years a archive a target audience of billions of new consumers. Brazil is the 8th largest ne-twork of the world’s consumers. It is defined as “consumer class” people with purchasing power (income adjusted local prices) of over US $ 7000, or about US $ 28,000 per year.

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Brazil has only 33% of the population included in this “consumer society”. Brazil has this crite-rion, 57.8 million consumers.

Five major factors that consolidate the Brazilian consumer:

• The significant growth of the class purchasing power “C”;

• The population assuming their sexual orienta-tion and revealing a consumption profile tur-ned to their tastes and needs;

• The young consumerist population;

• Increased participation of women in the labor market;

• The increase in the elderly population.

Although there are differences among consumers in developed countries, this growth will repre-sent a new consumer of large proportions. The contribution of developing countries to global GDP will be increased by the amount of consu-

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mer mass that has been formed gradually, either by redistriuição income, are the social programs that is the lowest unemployment rates.

To achieve this new target audience, industry and retail network will require a different cost structure. The next decade will reward entre-preneurs who identify the identity and the con-sumption potential of the new billion for con-sumers for service, innovations and the new demand for food, appliances, transportation, entertainment, should enter the adoption of new concepts in retail sales. The entrepreneur who does not see and understand the need for change in marketing, customer service and sa-les techniques through innovation, will be over-come by the competitor. In short, it is a large market and that is forming, with much lower average prices, due to the relatively lower level of income, the products and services offered will be different from those sold to consumers in developed economies.

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Companies will have the opportunity to make an impact on the preferences of those who are entering the consumer market.

CONSUMPTION AND RETAIL

With the return of inflation, the habits and cus-toms of the national population is changing, has many families who now carry their purchases in Atacarejo networks (wholesale + retail). In 2015 about 3 million households now consume in lar-ge wholesale networks, where the products are often cheaper compared to supermarket chains.

A key change takes place by the fact that the general population started to stockpile food and cleaning products in an attempt to escape from the rising prices.

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According to surveys, the wholesale markets grew 26% last quarter, compared to the same period last year, and one of the largest Brazilian wholesale networks opened 11 new stores.

Another change of habit is the collective buying, where families turned shopping communities and began to meet to buy commonly used pro-ducts and began to share the costs, expenses and the storage of these products. The reason for this new consumer habit takes place by the fact that about 80% of the products sold in the attack is 15% to 20% cheaper than those found in supermarket chains, an obvious benefit to the consumer.

Families that once accounted for 30% of actual purchases at wholesale, and 70% of the remain-der was represented by traders who resell the products began to be distributed among 50% to 50% among households and traders. This mo-vement means a new change in market behavior.

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This year the increase in retail sales should slow down to something closer to 3%. But still it will be a growth above GDP.

Following the movement of billions of consu-mers that should arise in developing countries, the retail growth depends directly on employ-ment levels and income, which we have seen, are at unsatisfactory levels, but still with great strength and dynamism. The movement of in-come deconcentration (government transfers) contributes to the widespread and homogeneous expansion between the various regions of the country. A growing portion of the population is expanding and sophisticated a consumer basket of goods and services. The general consensus on the subject is that the average income is growing but is also increasing the inclusion of the popu-lation with the lowest income classes in middle income categories.

Changes in economic structure, together with the changes in culture and technology, have

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been impacting the new economy and the new consumer profile. Examples of cultural changes: increasing participation of women in the labor market; changing eating habits to eating out; re-ducing the number of children; greater search for practicality and convenience; increase in the number of people living alone; growing demand for knowledge and information; demand for better quality of life and health; increased life expectancy; social and environmental responsi-bility; among others.

The retail sector in Brazil presents profound changes due to changes in the credit markets and consumption due to the development of a range of competitive strategies and increase their coverage nationally. Competition is in-creasing between identical and different for-mats and between suppliers and retailers, there are few business models promoting ruptures in business concepts, especially in the case of su-permarkets, which leads to the need to establish partnerships between the various components

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of the production chain. In the specific case of the suppliers, there is a dispute between brands, and among peers, various cooperation strategies through the creation of business centers and the expansion of groups and networks.

The way found to achieve economies of scale implies better management: training and staff retention; supply chains; space management and category; adoption of advanced tools of infor-mation technology for supply control, demand, inventory levels and reducing disruptions and commercial automation; among others. The fo-cus on specific market niches and specialization is also evolving.

The pursuit of operational and financial effi-ciency generates competitive advantages by fo-cusing on cost structure, quality and service. In this context, the consumer’s perception highli-ghts the actions aimed at loyalty and knowled-ge of their preferences, in addition to offering a greater number of differentiated products. Eco-

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nomic stability has led to strategic partnerships with financial institutions in order to expand sales, and ensure a more accurate management of credit.

The potential for expansion of activity attrac-ted the entry of foreign participants which led to and facilitated the adoption of more modern concepts of operation. However the changes in consumer habits have always shaped the beha-vior of the entire supply chain.

In general, small and medium retailers have be-come increasingly, simple, fast and convenient purchase option.

Consequently, retailers began to make smaller and more frequent requests to suppliers. That is, the average ticket fell, and increased the level of fractionation.

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The industry, in turn, always concerned to en-sure the presence of the product at point of sale, also began to work with the need to reach this consumer, which increased the importance of working with efficient and committed distribu-tors and to improve through technology loyalty cards traceability consumption and above what has not been consumed and which is in stock at the residence of the end user.

Every movement brought further development of the distribution sector, which expanded the search for modern and efficient solutions on the market. The segment is responsible for su-pplying more than half of what is consumed in the country, ie, has the task of ensuring that the products are available where the consumer is. We are talking about more than 1 million points of sale.

Importantly, in every aspect and habit, the con-sumer always expects to have the product you want at your fingertips, which makes the distri-

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bution of the most important steps in the pro-cess, making the challenges even greater logisti-cs.

The small retailers, or the famous neighborhood grocery stores, are the most demand from dis-tributors due to the profile of consumers who attend. Are people who go daily (or almost) the establishment and take either necessary product at that time.

To be supplied 2 or even 3 times a week, it is ne-cessary that the retailer has as a partner a good distributor and make sure that it uses effective solutions and technology services. This level of service is essential for small and medium retail satisfaction guarantee and fidelize increasingly customers. All with financial health, guaranteed by lower stocks and competitive prices.

Thus, the retail sector, once considered one of the most rigid, increased pressure on distributors

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with respect to timeliness, accuracy and quality of the delivered products and made available to consumers.

In the diversity of items, it is common to see vegetables, fruits and legumes changed daily, which in many cases does not occur in super-markets. Nobody is going to the same place se-veral times if you leave unsatisfied. Therefore, the range of products should always be adapted to the consumer. And the distributor is the key element to achieve this premise

Another important factor is the internationa-lization processes, the segment presents a con-solidation movement led by medium and lar-ge retailers, especially in the food area, as the Brazilian retail market is still fragmented and continental. Some retail industry mergers and acquisitions movements also very changed the design of the national competition.

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Currently, the activity has benefited directly from the advances experienced in the levels of income and employment of population and economic integration of new and potential cus-tomers that extend while more sophisticated the various segments. Globally, the adjustment pro-cess to the new configuration involves all pro-ductive activities, reaching the levels of employ-ment and income of consumers. The gradual resumption of growth depends on the effective-ness of the measures adopted, which ultimately lead to a reassessment of the profitability of cor-porations as a whole.

THE RETAIL SECTOR IN BRAZIL

The Brazilian retail sector is seeking to increa-se its regional coverage, to disseminate specialty stores and increase the presence of groups and chains nationwide.

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In this scenario promoted an improvement in relationships in terms of supply chain, which now aim not feather the commercial, prices and payment methods, as well as better management of freight flows.

Beside a standard family-run, is the improve-ment of governance through the use of informa-tion technologies, which harmonize the standard of management of companies and their level of professionalism. Currently, there is the growing use of saving technologies of skilled manpower and better training of employees, essential for an intensive sector in less skilled labor and high turnover.

In Brazil there are about 1.5 billion business, and the retail sector accounts for 84% of all bu-siness enterprises in Brazil, this is the strength of this sector within the economy and the sector accounted for 42% of the turnover of trade in the country.

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The number of supermarkets in Brazil in rela-tion to the population and territory is still less than the existing number in countries like the United States and Europe, such as France, Ger-many and England, as well as some South Ame-rican countries like Chile, indicating a great po-tential for expansion.

The food retail sector in Brazil is still fragmen-ted despite the consolidation process led by medium and large food retailers. The twenty largest networks and companies in the super-market segment represents approximately 80% of net sales of the companies in the market, and a large concentration of stores in the same re-gion. In addition, the ten largest supermarket chains account for about half of all industry sa-les. However, there is strong competition from small food retailers and regional networks, na-tional and international retail.

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HYPER AND SUPERMARKETS

The supermarket activity, one of the largest Bra-zilian retail sector, representing more than 20% of the overall trade is still highlighted. The ex-pansion of social programs brought very positive effects on activity, although signs of exhaustion in some regions (Northern Region). The seg-ment goes through a negative phase, with loss of growth rates in the sections food and nominal revenue of around 8% per year. A portion of the growth of ad is only passing on inflation indices and rising producer prices and do not increase in profit margins or gross revenues.

RETAIL DYNAMICS

Recent developments in the supermarket seg-ment includes, multiple simultaneous move-

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ments including the preparation for the ex-pansion of sales; the search for more profitable operations; proposals for new store formats; and diversification of product mix. Beside the inter-nal consolidation and structuring movements, supermarkets seek to expand its store base and acquire other networks and new formats. In recent years, the expansion of consumption of low-income classes, by raising the wages or fede-ral income transfer programs, has been driving the growth of the sector, mainly in the North and Northeast and small format stores located in neighborhoods of large cities. In 2016 it is expected that this sector will re-organize throu-gh mergers and acquisitions and movements with the departure of some players in the Brazi-lian market.

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4 - BRAZILIAN INFRASTRUCTURE FUTURE PLANTS

The renewal and revitalization of the Brazilian economy certainly will occur through invest-ment in essential infrastructure. Most of that was created in Brazil has more than 50 years old and urgently needs to be reformed and expan-ded.

There is a lot of pressure so that the tax burden is reduced or stabilized and that the scenarios of public finances to become more productive in terms of return to society. This way there will be increasing opportunities for public and private partnerships (PPP), it will be necessary that the infrastructure continuously develop to monitor the growth and set the foundations of the new economy and future expansion.

It does not help that Brazil is connected via the Internet and have an intense e-commerce if the

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goods do not arrive. The world will enhance the flow of information, goods and people. It is inevitable that Brazil invests in northern trans-portation infrastructure south of the country, and these investments should cover the entire logistics system, highways, railways, ports, air-ports, waterways, coastal shipping. If not car-rying out the planned form of investments and urgently demanded, will stop growing, kick and will completely lose their ability to compete, the logistical bottleneck has to be faced, there is no alternative for the country. In terms of logistics and infrastructure, Brazil has to look to the fu-ture, We have to draft a reform plan to ensure sustainable and quality growth in the coming decades. The next few decades we have great ad-vances in all areas of the economy and 2016 is an important year for consolidating the moment of profound changes to ensure a brighter future.

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THE PUBLIC CONCESSIONS

Most of the investments will actually be started only from 2016. Thus there is a positive outlook for the sector in the coming years with invest-ments in airports, highways, railways, ports and power sector, so with the highways and airport concessions must warm the infrastructure seg-ment.

The most recent highlight was the auction of airports whose total investment is estimated at R $ 5.7 billion by the end of the concession.

RAILWAYS

In the coming years will be several auctions for the construction of 10,000 kilometers of new railways in the country, with an estimated value

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of R $ 91 million in investments for the coming years.

As we see, it is imperative for Brazil to be rea-lized new investments in new lines of railways in order to reduce the current distribution costs and Logística and reduce dependence on high--cost flow on highways. Initially, it was hoped that the awards began in 2013, but there was a delay in the process. The first section to be auc-tioned should be to Lucas do Rio Verde (MT) to Campinorte (GO). Much of the remaining portions still depend on approval of TCU.

AIRPORTS

Air transport of passengers increased by 32.5 million passengers to 98 million between 2002 and 2014, due to the increase in real gains of the middle class and wealth redistribution po-

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licies, the disadvantaged sections had access to air travel.

Now it is time to raise the profile of public con-cessions of Brazilian airports, the first conces-sions, as the Guarulhos airport in Sao Paulo, was won by an investment fund with little ex-perience in the same-sized airports. The Brasi-lia airport concession was won by a company that today we found to be involved in Opera-tion lava jet. Concessions must be made more refined way to prevent what did not work, come to get even worse.

Concession Galeao and Confins. Investment of $ 7.3 billion for modernization and impro-vement of 270 regional airports (medium and small), and an incentive plan to encourage re-gional aviation, with passages of subsidy and ta-riff exemption at airports with up to 1 million passengers a year

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PORTS

The highlight for 2014 is the beginning of in-vestments for Strategic Waterways Plan (PHE), launched in October, which provides for a in-crease of 380% on the amount transported by waterways (from 25 to 120 million tonnes a year) by 2031. To this end, it is planned to build infrastructure in more than 3000 km, and improvements in at least 21,000 km of rivers already navigable.

It is also expected to project bidding for dred-ging the Port of Rio de Janeiro with completion of the works in early 2016.

Concession 5 public ports - Manaus (AM), Por-to Sul (Brazil), Deep Water (ES), Ilheus (BA) and Imbituba (SC); relicitação 98 terminals in public ports leased to the private sector. New re-

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gulatory framework for the port sector is being developed, which should bring great transfor-mation, modernization and investment to this sector.

HIGHWAYS

On concessions in federal highways, is schedu-led for the first half of this year making various auctions and the government he considered the possibility that the doubling of the track is made for inclusion in the Growth Acceleration Program (PAC) or via the National Department Transportation Infrastructure (DNIT).

The alternative of granting operation with in-vestments of some of the main Brazilian hi-ghways was created by assumptions that finally justified the execution of the project, including:

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Investment Generation in the recovery and ex-pansion of road infrastructure, already severely degraded by applications deficit in anteiores ye-ars, including the current maintenance;

Introduction of supply aid services to the user (medical rescue, towing, mechanical assistance, telephony and traffic control), characteristic of the Brazilian model, to improve the quality of the service offered (greater safety and reliabili-ty);

Lack of proper financing mechanisms;

Application of private capital in the form of own resources of the shareholders (the DNER required minimum proof of 20% of equity; sta-tes, in turn, required 10%), to leverage adicio-nal resources to the sector.

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ELECTRICITY

Brazil has created its own problems in this sec-tor. The current government made a correct diagnosis that energy was expensive. But the way chosen to tackle the problem was wrong. Government shyly lowered taxes and charges on the electricity bill. The main measure was lower the value of the rates reduced profitability and attractiveness to industry investment. Entrepre-neurs shelved new investments, and supply con-tinued to grow. At the same time demand has increased due to lower prices.

Energy investments are expected to grow subs-tantially in the coming years to keep pace with growing demand and eliminate the historical bottlenecks in the sector.

It is planned for this year’s auction of the hy-droelectric plant Three Brothers (SP), the dam of the São Luiz do Tapajós (PA) and the main

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transmission system of the Belo Monte Dam (PA). Furthermore, they must be initiated in-vestments for hydroelectric São Manoel (MT--PA), topped by Newfoundland consortium in December, provided a total of US $ 2.7 billion by 2018. The new sources of energy are also part of new basket of investment opportunities in the country.

5 - B2B SUSTAINABLE

Large companies are beginning to reduce the impact of its production processes on the en-vironment, and this is an opportunity for small and medium-sized developing technologies and services to help them in this task. It is a market that is expected to hit $ 10 trillion worldwide by 2020. Some possibilities of action are in the planning of actions to neutralize the emission of harmful gases, developing alternative energy

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sources and the development of less polluting materials.

6- REVERSE LOGISTICS

Some sectors of the industry (batteries, tires, lu-bricating oils, lamps and electronics) will have to take responsibility for the final disposal of their products. From 2014, manufacturers will manage the removal of items that consumers discard and give these products the correct des-tination, in partnership with governments and retailers. That’s where carriers and recycling companies and certified destruction. According to the Council of Reverse Logistics of Brazil, the sector generates R $ 18 billion annually and is expected to grow by 2015, the deadline for ma-nufacturers to fit.

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7- SOCIAL COMMERCE

Transform social networks in the digital version of Word of mouth is the main trend of e-com-merce in 2015, as envisioned in 2011. Compa-nies are beginning to open stores on Facebook that his followers share with known what is in the window. But to stimulate sales through social recommendation, we need to engage the public. One of the largest national retail chain, allows some followers in social networks assemble a showcase with their products and make purcha-sing suggestions your friends, in exchange for a commission of up to 4.5% of sales value.

8 - SMARTER AND HEALTHY POPULATION

The major stimulus for the growth of a coun-try is certainly the investment in human capital,

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which moves the economy and that can solve the shortage of funds equations. In Brazil there are many challenges in the allocation of public resources for investment in health and educa-tion, but this also is that there are opportunities to fill gaps. Access to education and health are key factors for Brazil to carry out successfully the transition to a mature economy, with in-dustry and services with greater added value to society. The federal government feels pressured by society to build a basic health system and integrated by technology and absorb a larger proportion of investment than those made in the past, a model of which we know to be ineffi-cient for the population. However there is a part of the population that is aging and that there will be new and better medical treatments, thus promoting changes in payment systems should increase the efficiency of spending on private health care, all this encourages investors to in-novation and reform.

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Equipment manufacturers, medical centers and the Federal Government will suffer pressure im-prove the supply and quality of services. More efficiently, reducing per capita costs and impro-vements in the state of the patients will conti-nue to be an excellent business.

The investors see opportunities in products and support services more consumers oriented and preventive medicine, in which patients are more willing to pay more and more.

9 - BETTER QUALITY IN EVERY THING

We have followed an improvement in quality in all products and services in Brazil. Improve-ment of customized furniture, clothing, con-sumer durables, construction, cars, appliances, and etc. The more the economy progresses, the

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greater the increase in the proportion of costs and a consequent increase in the number and quality of offers on the market.

Innovations are subtle, usually generated in pro-cesses, design, business models, market percep-tion or consumer will become increasingly im-portant. The consumer will be more willing to increase the consumption of physical goods and intangible with some added value than in con-trast to the mere innovation in efficiency, which lowers costs and price levels.

For the business environment, companies will have an even greater commitment to direct in-vestments to full customer satisfaction. Such in-vestments will be part of the competition strate-gy and survival in the market. Will be produced for the new millions of modern consumers and will continue to sell to traditional markets.

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Mergers and acquisitions, marketing, innova-tions in business models will be very important in creating more economic value, far beyond market gains.

For the richest, the search for better quality, for the poorest will be oriented access to consump-tion in large quantities.

10- TECHNOLOGY AND INNOVATION

The great needs and inventions come true major revolutions and social quality leaps of mankind. Brazil has great potential to participate in the technological innovation market, our natural vocation for creativity and uniqueness of a set of attributes allows us to conquer a place in the his-tory of world technology. We see that the great contribution of technological innovation has yet to emerge in the world, have big bets and gains

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on the horizon, led by large funds and investors in the creation of incubators, the development of new drugs together with the pharmaceutical industry, innovations in nanotechnology, bio-technology, artificial intelligence, robotics and a new wide range of applications for industrial production and linked the area of health.

In Brazil the future we will have less traditional jobs and lower new business entry barrier, with the trend of appreciation of the intellectual work of ideas, niches, training. Despite the current la-bor laws do not follow a global trend of separa-tion of work location and letting the employee decide for themselfes what is the best workplace. The Brazilian will also be more willing to “buy” the free time, “buying” less hours and making more flexible productive hours.

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11. COSMETICS INDUSTRY - VANITY & BEAUTY

The Brazilian people, especially women are among the most vain people on the planet, it is noted that the significant growth rates of the sector, whose growth expectation for 2015 is within the industry are used to, actual growth between 4% and 7%, a higher growth of the national economy.

The Brazilian market has shown over the last 17 years, an average deflated growth of 10% per year.

One of the factors responsible for part of the loss of performance, are resistant inflation, lower credit availability and interest in elevation. Another striking fact that certainly affected the performance of the cosmetics market, was the delay in the approval of grade products 2 by the National Agency for Sanitary Surveillance (An-

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visa), the average waiting period for the relea-se of processes went beyond the usual 45 days and It reached the 200 day mark. The cosmetics industry has strong new launch appeal - in ge-neral, more sophisticated products, value-added ceased to make about R $ 1 billion, generating 6,500 jobs and collect about R $ 340 million in taxes. The consolidated figures relating to the product categories in 2015 were not yet availab-le, but the segment of sunscreens, whose perfor-mance will surprise the market very positively, thanks to uninterrupted days of heat, since the end of December. In the personal care segment, the significant growth in the category of deo-dorants, which increased 12.4% in volume and 21.66% in sales up to August 2013. Of note is the strengthening of perfumery in the franchise market, “there was an increase highly significant (in the perfumery segment) compared with the traditional market and the direct sale. “ Today the cosmetics sector represents 1.8% of national GDP. Brazil ranks third in the world market, only surpassed by the United States and Japan.

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In Brazil are installed 2,412 companies working in the CT & F market. As for the geographical location, 46 of them are in the north; 169 in the Midwest; 242 in the Northeast; 1487 in the Southeast; . And 468 in the South Another sig-nificant finding is that, of this total, 20 are large companies - mostly multinational - with net sa-les above R $ 100 million, representing 73% of total industry revenue.

12 –MALE BEAUTY MARKET

Brazil is already the second largest market of cosmetics for men, second only to the US. In 2014, this specialized segment earned US $ 3.73 billion in Brazil, a 14% increase over 2013.

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13. AFFORDABLE BEAUTY

Brazilian wants to look pretty, especially those that are now coming to the labor market. Among women of class C, 69% invest in appearance to grow in their careers. From 2003 to 2010, the sale of enamels for that market share went from 40% to 53% of the total. Beauty salons are also billing, but with families of Class B (income of R $ 4,854 to R $ 6,329), the more they spend on this service - R $ 281 million monthly.

14 - PORTION FOR ONE PERSON

The number of people living alone has risen from 8.6% of the population in 2000 to 12.1% in 2013. Porto Alegre is considered the capital of the lonely, representing 21.6% of the popula-tion. It is worth investing public NSSE singles,

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elderly or divorced, you are looking for specia-lized domestic services, such as repair and clea-ning, and products made for unit consumption, especially food.

15- MEDIUM SIZED CITIES

The medium-sized cities, which are betwe-en 100 000 and 500 000 inhabitants, already contains 25% of the population. They are the fastest growing. The economic boom in these regions increases the purchasing power of an audience that craves more sophisticated pro-ducts and services. “It’s a good opportunity for e-commerce in segments such as babies, wine, pet and fashion.

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16 - FOCUS ON MIDDLE CLASS

The class that brings together families with in-come between R $ 1,126 and R $ 4,854 repre-sents more than half the population (55%). It was the only social group that grew last year: won 4 million members. These consumers prio-ritize quality rather than price, search the web before buying and focus their attention on edu-cation – for 66% of them that is the priority of their budget. Social inequalities are not good for the economy and there is no risk in combat it. One of the most effective ways to combat it is through education.

17 – THE EXCLUSIVITY MARKET

For the public class A, the new luxury facet is to consume a lesser amount, but with greater

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demand for exclusivity. Expensives bags leaves the scene to make way for unique pieces, hand-made, and very high added value. The customer is aware that the item is expensive due to the long production time, and this is as true for an aged wine and for an amazing bag, with unique materials.

18. PERSONS WITH SPECIAL NEEDS

About 24% of the population has some type of physical or intellectual disabilities. Are 45.6 million people, according to the Brazilian Insti-tute of Geography and Statistics (IBGE). Meet them is a priority for the federal government: by 2014, US $ 7.6 billion should be invested in No Limit Living program, which includes projects related to education, health and accessibility. The government will also supply the Financier of Studies and Projects (Finep) with R $ 150

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million for research and development of assisti-ve technologies. Need more reason to pay atten-tion to this market?

19. FUNCTIONAL DRINKS

The consumption of these two types of beverage is starting to take off in Brazil, in Latin America grew by 22% of the segment in 2010. Another branch-related quality of life, functional drinks that bring health benefits, following warm: It earned $ 24 billion worldwide in 2013 and has grown above average power market.

20 - FINITE RESOURCES

Food, water, energy, industrial commodities and the rise in global prosperity, cause a struggle for

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these basic products. Or companies from deve-loped countries continue to invest in scenario planning to prepare for the shock of the changes or start to plan a more flexible Business models in terms of strategic alliances. We find that Bra-zil has modernized some protection tools for the acquisition of productive land, as well as restric-ted foreign participation in the exploration of ores, among other strategic sectors.

The growth in demand for oil and natural gas, grains and protein, drinking water and ores, such as copper, aluminum and rare earth me-tals will cause volatility in prices and shortages in the coming decades. The volatility together with inflation in commodity prices will incre-ase over time, as well as increasing consump-tion and demand, are increasingly interrelated, for example, is a food that is a source of energy (ethanol) used for transport.

The human demand exceeded supply for the first time in the 1980s, and this deficit has been

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growing since then, mainly because of the rapid growth of the carbon footprint, which measures the use of electricity and fossil fuels.

Three quarters of the human population now live in countries that are ecological debtors, de-manding greater biocapacity that exists within its borders. However, the relative demand for resources between these countries varies greatly. The footprint of an average individual in the United States is 9.4 global hectares (equivalent to about ten football fields); in EU countries is 4.7 hec tares overall, although the country with the highest per capita footprint is the United Arab Emirates (9.5 global hectares). The avera-ge per capita footprint in Brazil is 2.4 global hectares, lower than the world average, althou-gh higher than the shared global quota of 2.1 global hectares per person.

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Haiti, Afghanistan and Malawi are the coun-tries that boast smaller footprints, lower than 0.5 global hectares, and, in most cases, too small to meet the minimum requirements of food, housing, infrastructure and sanitation. In many poor countries with smaller footprints, popula-tion growth is causing the increase in the overall consumption of resources, even if it means re-ducing per capita consumption. China and the US are the countries that carry the highest total pressure on the world’s resources, each consu-ming 21% of global biocapacity - together re-presenting nearly half of human demand on na-ture’s services.

It is obvious that the human economy cannot continue to operate as if the ecological resources were unlimited. Not only is the health of the natural environment that is at stake. If this con-tinues, the ecological deficit spending will cause serious economic and social consequences. The scarcity of natural resources and the destruction of ecosystems should shoot the prices of food

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and energy, while the value of long-term invest-ments will collapse.

In a world with about 6.7 billion people, we need accurate and effective measurement tools capabilities that enable us to manage our natu-ral capital and make decisions that fit our eco-logical budget. There are still chances to reverse the current trends: creating efficient cities and infrastructure in the management of natural re-sources; the promotion of best practices in green technology and innovation, putting the limited resources as a central point in decision-making - which the ecological assessment plays a key role.

In approaching the future with increasing limi-tations of natural resources, the most success-ful companies will be those that invest in the green economy. This effort not only favor those nations that adopt but can begin to reduce the global footprint of vital process, ensuring the natural resources on which depends the welfare of humanity.

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Increasing world food consumption, from the growing world population with rising incomes, it also represents an opportunity for Brazilian agriculture. Among the major agricultural pro-ducers, Brazil is the country with the greater availability of water resources, and this will re-present a competitive advantage in the long run.

Almost 50% of the country’s extension posses-ses underground water and only 50% of the municipalities exploit this supply mode. Brazil has the largest aquifer in the world: The Alter do Chão (AM), whose water is estimated to be enough to supply the entire world’s population for 100 years.

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OVERVIEW FOR MERGERS AND ACQUISITIONS IN BRAZIL

A key change in this sector will be the more ac-tive participation of private equity funds in the disputes in the public concession from 2016, disputes previously reserved for large construc-tion companies.

Disputes of private equity funds will occur mainly in the airport concessions, ports and contracts in infrastructure. Brazil is providing more transparency and fairness in the conces-sion rules, a factor that is making the most fa-vorable environment for new competitors. The year 2015 has been most affected by the uncer-tainty of who would win the elections than the recession frame.

The moment is favorable for mergers and acqui-sitions, asset prices have fallen to more realistic levels and the Brazilian businessman this much

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more cautious when it comes to pricing their assets. The loss of investment grade and politi-cal questions did not influence the environment for mergers and acquisitions, as usually inves-tors look for a long-term horizon.

Highlight one of the major cultural differences between Brazilian entrepreneurs with the most aggressive countries in terms of mergers and acquisitions, it is that Brazilian entrepreneurs build their businesses targeting the growth of their personal and family assets, generally refu-sing third party capital inflow to evolve, while the others start their business purposes, aiming from the outset capital from third parties as a business thrust lever. These differences reflect the initial barriers to mergers and acquisitions environment companies in Brazil.

Brazil possesses one of the most fertile soil for mergers and acquisitions in the world in the first half of 2015 were 401 operations imple-

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mented the number of mergers and acquisitions involving Brazilian companies.

Although Brazil is facing a less favorable econo-mic times, businesses still have sought to fulfill their business strategies through mergers and acquisitions is to expand or strengthen their bu-siness, with the largest decrease in turnover It occurred in Oil, Mining and Energy sectors.

Another highlight was the growth in the number of transactions relating to Brazilian companies acquiring Brazilian companies in Brazil, which in the second quarter, up 82 negotiations. After falling in the first quarter of the year, domestic transactions rebounded between April and June.

It is also important to note that the operations of Brazilian companies buying foreign compa-nies established abroad were a major highlight in the first half. The operations of this kind re-

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corded its best performance since 2010, with 32 transactions.

HIGHLIGHTS IN MERGER AND ACQUISITIONS

The Information and Internet Business Techno-logy sectors continued to lead the number of transactions (75 and 43 respectively). It is also noted that the education sector registered grow-th of approximately 90% over the previous year (9 transactions), with 17 operations.

On the other hand, for some sectors significant decreases were recorded. The Oil & Gas seg-ment, for example, recorded four operations, 75% lower number that registered in the first half of last year (15 transactions).

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These numbers could be even better if we had not low growth, the effects of the devaluation of the real, street demonstrations and government intervention of memory in the electricity sector,

Actually what happened was that buyers, espe-cially foreigners, were more reticent and, there-fore, the operations took longer to materialize.

The movement of the viewpoint was very inten-se, but in cases effectively concluded, there was a smaller number. This means that the trading time is greater or no withdrawal halfway.

In siintese, interest in Brazil remains high, but is not the same thing than a few years.

The market for buying and selling companies reflects the investors’ perception of what will ha-ppen in the country in the coming years. When the outlook is positive, the tendency is to run to

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acquire companies expecting a high return with the explosion of sales and consumption.

Already in times of uncertainty, many choose to further analyze your options, bargain values or grow through the own business expansion.

Who are contemplating operations will have to be more diligent. The transactions tend to be longer and designed.

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INITIAL APPROACH TARGET FOR MERGERS AND

ACQUISITIONS

As we saw earlier, a volume many large busi-nesses are performed annually in Brazil, but an even greater number were frustrated by inse-curity, distrust or lack of clarity in the persis-tence in mergers and acquisitions. Many cases occur when the entrepreneur has real pretense of selling your business, but feel insecure in pro-viding Any extra basic information about the fi-nancial and economic history of the company, sometimes the entrepreneur requires receiving a potential investor Letter of Intent, which which does not You have any knowledge of the attribu-tes of interest or risk of supply.

In this way businesses are losing productivity and efficiency between the requirements and demands of the seller side and the buyer side.

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It is suggested that the first direct approach to the entrepreneur, if is not accompanied by a lawyer, that usually brings some discomfort and distrust of Brazilian entrepreneur. Having won the “trust” of seriendade of purpose between the parties becomes normal for the entry of other professionals in the business processes.

PERFORMING BUSINESSES DUE DILIGENCES

As already stated, the Brazilian can often take some form of “knack” in managing their bu-sinesses, thereby conducting due diligence is mandatory, but it must go beyond the usual au-dit investigative process, as there are many me-thods and processes that can “hide” devices with little legal protection. In Brazil we call skeletons in the closet.

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When fall suspected contingency risks, and it is normal that part of the business value to be deposited in interest-bearing account until the deadline for the probable risks are dispersed completely.

DETERMINATION OF BUSINESS VALUE ACHIEVING THE VALUATIONS

The Brazilian entrepreneur has over the last few years getting used to the growth of international investor interest in relation to its business, and therefore to receive any proposals for mergers and acquisitions. However determining the bu-siness value is the first challenge that must be overcome by the applicant, since there is a “po-pular belief ” that - “Any company has its sales value based on monthly gross sales, multiplied by 12 times” discounting this value in the gene-ral debt, reaching the final value of the deal.

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Another unique factor in the negotiations is the applicant attempt to increase the business value adding attributes of personal experience, things like: Family effort, time spent in the construc-tion of heritage, abdicated dreams along life to the detriment of the business and other intan-gibles. It is recommended to be hired an inter-mediary negotiator to conduct this process step.

CHARACTERISTICS OF THE BRAZILIAN MARKET

The Brazilian market has undergone major changes since the late 90s, as a result of a series of advances and economic changes that promo-te the improvement of living conditions of the poorest, such as controlling inflation, reducing rates unemployment, expanding and reducing the cost of credit and the creation of social programs and various mechanisms for income transfer.

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This is reflected in the good performance of three key variables, households’ average inco-me had an accumulated growth of 12% over the last five years, the concentration of income has declined and there has been a diversification of consumption patterns, with smaller portion of committed income with expenses essential (food and housing) and therefore more disposa-ble income for consumption of other goods and services.

Last year, the household nominal income per capita average Brazilian was R$ 1.052 million (US$ 263.00), estimates of household nominal income per capita in 2014, with the national average and each of the 27 states of the country.

The largest household nominal income is all lo-cated in the Midwest, South and Southeast. In São Paulo, which has the largest industrial park in the country, the value is R $ 1,432 (US $ 358.00). Goiás, has household nominal income per person of R $ 1,031 (US $ 257.00). The Fe-

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deral District has the highest household nomi-nal income per capita among the 27 states, with R $ 2,055 (US $ 513.00). The lowest per capita income was recorded in Alagoas (R $ 604) or (US $ 151.00).

Behind the Federal District and São Paulo, the three southern states are: Rio Grande do Sul, with R $ 1,318 9 ($ 329); Santa Catarina, with R $ 1,245 (US $ 311.00), and Paraná, with R $ 1,210 (US $ 302.00). Next is the Rio de Janeiro (R $ 1,193) (US $ 298.00).

All states of North and Northeast have family nominal income per capita below US $ 1000, as values of R $ 604 (US $ 151.00), in Alagoas, and R $ 758 ($ 189.00) in Sergipe.

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MARKET FORECASTING

Imports account for about 9% of GDP, a relati-vely low by international standards percentage, revealing a large room for growth going forward, especially in light of a solid framework of ma-croeconomic indicators and favorable prospects for growth in domestic demand in the medium term.

In the last five years imports grew at an average annual rate of 15.2%.

More than half of the products that Brazil im-ports are intermediate goods used as inputs in domestic production. There is a significant amount also fuel imports (16% of total) and ca-pital goods (15.1%). Consumer goods still have a small share of just over 10% of the total.

Brazil has a dense industrial structure, with sig-nificant production level in almost all sectors.

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However, in most cases the industry is not able to supply the domestic demand throughout its volume and diversity.

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SEGMENTATION MARKET AND PROFILE OF BRAZILIAN

CONSUMERS

Until a few years ago, the consumer market in the country is focused on the so-called class A and B, which, although representing an impor-tant contingent in absolute terms left the cou-ntry far short of its potential. Recent develop-ments in the economy allowed the inclusion in the consumer market, a new and large number of people of so-called C and D classes, which are increasingly the target of marketing activities of the companies.

In Brazil there are about 20 million househol-ds, or something like 60 million people, whose average monthly income is at least R $ 2,500.00 (about US $ 625.00, the exchange jan / 2015).

Individuals C and D classes are, in general, peo-ple whose consumption needs are not fully met

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and that, according to several qualitative rese-arch, are optimistic about their future income prospects and great willingness to increase their consumption, either in quantity either in varie-ty of products. The economic crisis and infla-tion has changed consumer behavior, the way of doing business has changed, the way to con-vince the public target changed, new business rules deverrão take place in the business world. The population is more selective, with no in-tention of returning to debt and unsure about employability. In a general context, it was much more complex convince a Brazilian doing bu-siness, will require a new architecture in offers and more creativity to become competitive, those who do not understand this moment of transition, should not survive.

Therefore, foreign companies must face the Bra-zilian market not as a sophisticated and restric-ted market, but as a diverse and broad market, which presents a number of opportunities for

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producers of all kinds of goods in various price ranges and Of Quality.

ECONOMIC AND SOCIAL CLASSES

Brazil is a country with profound differences in social classes, despite the progress there is still a gulf separating rich from poor.

Brazil’s problems unfortunately are old and well known, as the growth of government expenditu-re, the accumulation of federal, state and local taxes, as well as currency issue, among others, are concerns of the business sector and society.

The driving force for the resumption of Brazil’s growth is at the very core of your problem, it is as if the problem was also the solution of the economy, the extreme deprivation in terms of general infrastructure, make the country a real

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construction site we have almost an entire cou-ntry to be built, with investments in roads, hou-sing, hospitals, schools, prisons, ports, airports, Logistics, creating jobs and opportunities, brin-ging foreign capital through public works con-cessions, reducing interference and investments of State.

POTENTIAL REGIONS TO INVESTMENT IN BRAZIL

Brazil is a country of continental dimensions and it also presents great contrasts between its different regions.

Far from being a problem for outside vendors, the great economic, social and cultural diver-sity means an almost unlimited set of business opportunities.

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The Southeast and South regions are the richest and most developed, with a pattern of more di-verse consumption, which makes them a priori-ty interest market, especially for companies that want to sell products of higher unit value. Be-cause they have well-developed industries also represent a large market for the sale of industrial supplies and capital goods.

This does not mean, however, that other regions do not offer good opportunities. The Northe-ast, for example, has a population of 54 million inhabitants and, over the past decade, experien-ced rapid economic development. The Midwest is the most economically dynamic region of the country, being a major center of agricultural production, and the northern region, although still sparsely populated, has an important indus-trial center (Zona Franca de Manaus) and has great growth prospects based sustainable exploi-tation of the wealth of the Amazon rainforest.

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INVESTING IN SOUTHEAST

It is the richest region and developed the coun-try, concentrating about 50% of GDP, or $ 770 billion - larger than most countries in the world. The per capita income is US $ 9600.

Encompassing the states of São Paulo, Rio de Janeiro, Minas Gerais and Espirito Santo and occupies about 11% of Brazilian territory. Its population is about 80 million inhabitants and a population density of approximately 87.5 inhabitants per km2.

It’s in the Southeast region that concentrates most of the industrial park in the country, also having a services sector well developed, espe-cially in Rio de Janeiro and Sao Paulo, plus a large agricultural production, notably within the states of São Paulo and Minas Gerais.

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The region’s imports totaled US $ 82 billion on average in recent years (just over 10% of GDP). Intermediate goods dominate the agenda of im-ports, due to the purchase of inputs to feed its broad industrial sector. The capital goods also play an important role, as well as fuel.

Consumer goods purchases account for just over 10% of total imports, but still represent an important market in terms of volume: about $ 9 billion on average in recent years. Most im-ports are chemicals, machinery and equipment, petroleum, motor vehicles and electronic ma-terials and comunications. There are registered significant volumes of imports of products the most varied, from food and drinks to office ma-chines and Computing.

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INVESTING IN SOUTH

It is the second richest region of the country, with about 15% of GDP and per capita income of $ 8200. It imported about U$ 29 billion on average in recent years.

It is composed of the states of Parana, Santa Ca-tarina and Rio Grande do Sul, with population of about 28 million inhabitants and a popula-tion density of 49.2 people per km2. It has many colonization centers with original population of the coldest countries in Europe.

Although relatively small in area (only 6.8% of the country), it also has great economic dyna-mism, grain production highlighting (primarily soybeans, corn, beans and wheat), livestock and textile, footwear and automotive.

Intermediate goods also dominate the agenda of imports from the region, but are also very

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important foreign purchases of fuel and capi-tal goods. Consumer goods purchases represent just over 10% of total imports, but with a sig-nificant volume in absolute terms: $ 3.8 billion on average in recent years.

Most imports are chemicals, petroleum, motor vehicles, machinery and equipment, and basic metallurgical. There are registered significant volumes of imports of a wide variety of products such as agricultural, electronic and communica-tions equipment and rubber and plastic.

In Joinville (SC), there is the country’s largest industrial condominium (Built To Suit) is a private enterprise, with over one hundred com-panies established (Perini Business Park), they pay a condo fee of $ 1 41 per m2 and do not care about the safe management, trash, waste collection and treatment of sewage and there is a customs broker that works within the con-glomerate. This project has won international companies like Sherwin-Williams, Bosch and

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BMW and there is room to receive many other companies.

NORTHEAST REGION

Occupies about 18% of the country and con-sists of the states of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraiba, Pernambuco, Ala-goas, Sergipe and Bahia. Its population is 53.6 million inhabitants, with a population density of 34.6 people per km2.

The Northeast produces 11.5% of GDP. Des-pite the per capita income still well below the more developed regions of the country (only US$ 3300) has presented a great economic dy-namism in recent years, with growth of 5.9% pa on average in recent years, well above the na-tional average. The region’s imports totaled US $ 12.7 billion on average in recent years. The

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region already has a purchasing power estima-ted at nearly R$ 450 billion. The middle class is expected to reach 50% of the population in five years, it’s rise is just beginning.

It is a region with great contrasts between the coastal region and the so-called “hinterland”, semi-arid region inside.

The first is fairly developed, especially the su-garcane industry and other activities related to agribusiness, as well as textile, chemical, auto-motive and food. The hinterland is the poorest region of Brazil, with a climate marked by long periods of drought, which does not prevent the existence of important centers of agricultural production.

The region’s imports are concentrated in in-termediate goods (47.3% of total) and fuels (31.5%). The consumer goods purchases accou-nt for only 9.2% of total imports).

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Most imports refers to the following sectors: oil refining and fuels, chemical products, metal mineral extraction, Vehicles and Machinery and equipment.

Imports still have low participation in the re-gion’s economy for a simple reason: the great Northeast suppliers are the industries of the Southeast and South of Brazil. But as the region grows, diversifies its production and increasing the level of income and public consumption, imports tend to grow more quickly, as happened in the last five years, in response to a wide range of products demanded.

BENEFITS TAX APPLIED TO THE NORTHEAST

The Northeast is located in an area of social deprivation, this form to the Federal Govern-

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ment in conjunction with the State Govern-ment grants various incentives and tax benefits, which are sourced from reduction of income tax and non-refundable, based on operating profit, and are intended for people juridical holders deployment projects, modernization, expansion or diversification of productive enterprises. The NDF (Northeast Development Fund) aims to ensure resources for investments in infrastruc-ture, public services and productive enterprises with large germination of new businesses and new productive activities. The resources of this Fund have to focus the funding at the corpora-te interest of enterprises that will be deployed, expanded, modernized and or diversified in the area of SUDENE (Northeast Development Agency) and will be destined to partially cover the investments total.

It is up to the investor to put in the balance se-veral cost factors and benefits in obtaining tax incentives and benefits, compared to the other challenges of access to skilled labor, geographi-

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cal positioning and the inherent logistics and distribution issues.

The current shift shaft regional country growth, which now returns to the Southeast, does not mean that the Northeast do not go grow, impor-tant states such as Bahia tend to go beyond cash transfers as they have relevant industrial dyna-mics. In addition, cash transfers via Exchange - Family and raising the minimum wage should continue to grow.

This type of policy helps the population of the Northeast, but does not create mechanisms to encourage the professionalization and increased employment in the region.

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NORTH REGION

It is the most extensive region of the country, with 45% of the country, encompassing the sta-tes of Acre, Amapá, Amazonas, Pará, Rondônia, Roraima and Tocantins. The current total po-pulation is around by only 15.8 million peo-ple, with very low population density (only 4.0 inhabitants per km2). There you find the most of the Amazon rainforest.

It produces 4.5% of GDP and has a per capita GDP of US$ 4.4 mil. It has also shown a rate of economic growth higher than the national average (6.6% pa between 2004 and 2007). Its imports were US $ 9 billion on average in recent years. The main economic activity of the region is the extraction, the main products latex, acai, wood and nuts. It is also the main mining area of the country, the Serra dos Carajás, Pará, with iron ore extraction.

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The large industrial center of the region is the Zona Franca de Manaus (Amazonas state capi-tal), especially the electronics manufacturing with high proportion of imported components.

As a result, imports from the region are highly concentrated in intermediate goods (76.8% of total), notably in the electronics sector and communication equipment (35.3% of total), also significant is the capital goods purchases (17.4%).

Plants, ports and mines generate wealth, but may lead to imbalances. The mineral wealth and potential of the basin of the Amazon made a new focus of investments in Brazil. By 2022, the volume of works announced in the region amounts to more than US $ 130 billion, inclu-ding mining projects, hydroelectric and portuá-rios. Many port terminals will be seen ahead, as there are several ongoing studies. The problem is around the environmental impacts that many of the projects will bring to the region.

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NEW STRATEGIC IMPORTANCE OF THE AMAZON

The mineral wealth and potential of the basin of the Amazon made a new focus of investments in Brazil.

If we think in the long term, the Amazon actu-ally provides an environmental service for hu-manity. If the planet does not care for the des-truction of the Amazon, this would accelerate the process of climate change. Somehow Brazil could be paid for services serviceos regulating climate and carbon sequestration.

The biotechnology industry can turn the Ama-zon and its biodiversity into effective products, unfortunately Amazon’s gene bank almost little is known.

Over the past few years, there has been an in-tensification of the struggle over the Amazon

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in various arenas, agribusiness, energy, mining, grilheiros, everyone will want a piece of this ter-ritory and the indigenous lands are central to these disputes. The problems will only mitigate if environmental laws become as rigid and ef-fective as labor laws governing the country. The government’s power cannot be timid or ambi-guous. Almost all of the electrical energy supply of the future will come from Amazon and it is inevitable that produce food in the region, but the reconciliation of these interests with the protection of biodiversity asset should change as a priority.

Exists in the Amazon about 16 thousand species of trees, of the total 6000 are considered rare or endemic, that is highly vulnerable to extinc-tion. It is estimated that are standing about 400 billion trees and 70 billion have already been felled.

Nobody wants to paralyze the development, but it must find an order to progress. The projects

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currently under development will help boost the economy of Norte. Between 2015 and 2018, the states in the region will grow 3.8% per year - above the national average of 2.9%.

Family income must follow the same rhythm and go up more than the rest of the country: 3.8% against 3.0%. Consequently, the popula-tion will increase by 1.35% per year over the period (in the South and Southeast, the rate will be 0.7%).

Last year, the North reached 17 million of it’s population. Untill 2018 will be 18.2 milhões. During this period, the unemployment rate will decline slightly from the current 6.6% to 6.4%.

There is a new investment cycle in the Amazon, the reflections on the life of the local population and the indigenous community and the impacts in the areas of environmental protection toge-ther with benefits of billionaires projects. “The

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country needs to revise its look on Amazon and redesign the standard occupation of the region “. Otherwise, 30 years from now we will be dis-cussing the coexistence between growth and po-verty.

With the depletion of hydroelectric potential and the port system bottleneck of the South and Southeast, the solution has been to raise plants and ports in the north. The movement began with the plants on the Madeira River and Belo Monte and should follow with another 13 me-gawatts (MW) over the next ten years. About 60% of the hydroelectric potential is in the nor-th, but we know that only a portion will be ex-plored.

To allow the early studies of São Luiz do Tapa-jós and Jatobá, the next plants to be auctioned, an interim measure has changed the boundaries of the Amazon National Park and a variety of forests, fields and areas of environmental preser-vation was created.

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In addition to the environmental issues, the la-test construction has caused serious social pro-blems, such as swelling population in cities with poor infrastructure. When a billion reais project comes to a small town, often with absence of the state and precarious indicators, it destabili-zes the little balance that people have. Although it is the second largest balance of trade balance, a major producer of energy and ore and have 4 or 5 largest cattle herd, Pará has a per capita income of a little more than half the national average.

For ports, the impact tends to be lower during the works. But with the increase of trucks on the roads towards the terminals and the expansion of the railway in the rivers, the daily life of the local population changes radically. The benefits of capture are further difficult. The terminals are fully operated by few people, as it has a high degree of automation.

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In the 70s, the northern region was the safety valve for the agrarian reform and now to be the depletion of logistics.

INVESTING IN MANAUS FREE TRADE ZONE

The goal of a free trade zone is to stimulate tra-de and accelerate the industrial development of a given region. The Brazil, South Korea, Chi-le, China, UAE, Spain, Portugal and France are among the countries that have free trade zones.

The Manaus Free Trade Zone was established in 1967 and the federal government proposes to extend until 2073 the incentives for the Manaus Free Zone.

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Manaus is the Amazon state capital, was little industry. To stimulate industrialization, the fe-deral government created the Suframa (Superin-tendency of the Manaus Free Zone). The Ma-naus Free Trade Zone covers the states of Acre, Amazonas, Rondônia and Roraima and the ci-ties of Macapá and Santana, in Amapá.

To attract companies had to grant tax benefits, such as exemptions and tax relief, to the local economy to become competitive. More than five decades later, fact Manaus became a center of major industries.

The Free Zone is an enclosed area where they enter domestic or foreign goods benefited from tax incentives and reduced or absent tariffs. These regions are isolated and are usually loca-ted in a port or the surrounding area.

Today more than 500 companies operating in the Free Zone - as the Honda motorcycle maker

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and electronics manufacturers Lenovo and Sam¬sung - billed together 75 billion reais, and generate 127,000 direct jobs and 500,000 indi-rect jobs. Only it was not possible to get rid of incentives, without which the pole would risk unravel.

In Manaus, as expected, it is hard to find anyo-ne opposed to the existence of the Free Zone. Companies there installed are among the big-gest advocates of the model.

Only the social impact caused in the region with the creation of jobs would justify the Free Zone, outside the Amazon, however, many analysts advocate the revision of the model. For them, after five decades of incentives, a competiti-ve industry has not yet been created. The Free Zone has brought more productivity in Brazil, Manaus and has not won a significant position in foreign trade.

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MIDWEST REGION

Occupies approximately 19% of the country and consists of the states of Goiás, Mato Gros-so, Mato Grosso do Sul and also the Federal District, where is located the capital. Its popu-lation is about 14 million inhabitants, with a population density of 8.6 inhabitants per km2.

The region produces about 8% of GDP and has a per capita income of US $ 4800. Its imports totaled U$ 7.4 billion on average in recent years and have been growing rapidly in recent years, the rate of 26.2% per year.

Its main activity is the agriculture industry, es-pecially the production of soybeans and cotton, but also has an industry booming, related not only to the agricultural industry, but also the chemical industry and to the production of au-tomóveis.As imports region are highly concen-trated in intermediate goods (43% of total), and

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fuel (26.3%), but already records a significant volume of consumer goods imports (US $ 1.6 billion on average in recent years). imported products relate mainly to the chemical, oil and automobiles, and machinery and equipment, metallurgy and food and drink.

INVESTING IN PARAGUAY TAX PRIVILEGES OF PARAGUAY

Paraguay managed to seduce hundreds of Bra-zilian entrepreneurs through the “maquila” sys-tem, companies produce goods or services with imported products at low prices and cheap la-bor.

The Maquila Project, better known as Maqui-la Law, created in order to industrialize Para-guay through exports, ie a drawback legislation with expanded incentives for various sectors. Its

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objective is to establish and regulate the opera-tions of industrial assembly companies engaged wholly or partly to make industrial processes or services incorporating labor and other national resources for the transformation, elaboration, repair or assembly of goods of foreign origin , temporarily imported for the purpose of “re-ex-port” pursuant to a contract signed with a com-pany domiciled abroad.

“Firm up an alliance with a Paraguayan com-pany, which can be subsidiary of the Brazilian company or an existing company and Paraguay, through a maquila contract it holds the maqui-lação process. For example: in the case of clo-thing, the Brazilian businessman opens a com-pany in Paraguay, imports raw materials from anywhere in the world, processes and finishes the product in Paraguay, exporting to Brazil or any other country. “

The import of raw materials and capital goods can be from anywhere in the world without any

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tax. The product is processed internally in Pa-raguay, with a single tax, including income tax of 1% on the value added in the country, with the obligation to export production. In this case we have two characters: a mother, a company located abroad, which makes the purchase or-der; and the maquiladora, now installed in Pa-raguay, in charge of industrial production for the array. And there is still a supporting: sub-contractors, known as “submaquiladores”, the maquiladoras service providers. “All this chain - maquiladora and submaquiladora - have the same tax exemptions. For example, a Brazilian production in Paraguay (maquiladora) hires a local industry fabrics to meet the production, all working with the same tax exemption. Para-guay is the only country that can give Brazil the possibility of our industries significantly reduce its production costs to compete in our own do-mestic market with the Chinese.

But beware: to make the maquila, the presenta-tion is required for a project in which it details

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the entire production flow and inputs to be used as well as the disposal of waste. Some entrepre-neurs think they do the maquila and fulfill all your requirements is something simple, but in reality it is not. It requires planning, production control and sales calculation, management fac-tors that we know to be deficient in many of the micro and small Brazilian companies.

Currently, the Paraguayan cities that have stood out in the sector are clothing manufacturer Ciudad del Este, Puerto Franco and Hernan-darias, west of the country, and San Lorenzo, Luque, Lambare and Pilar, neighboring the ca-pital, Asuncion. There is a partnership of the business center with a Paraguayan city conside-red “capital of the seam” where the tradition of sewing and embroidery is secular, with 12,000 seamstresses prepared to work in the industry, working now in cooperatives and small units, mostly individual.

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BUSINESS MISSIONS

Several trade missions, especially in southern Brazil, are taking place in order to show how the production in Paraguay. This is due, in addition to ease of being close to the borders, the tech-nical cooperation projects between the Brazilian government and the Mercosur countries, which realize the importance of strengthening and bu-siness environment favoring among neighboring countries. “We can not have growth and deve-lopment of our products across the border this improvement is not accompanied or perceived”. In the specific case of Paraguay, with which Bra-zil has always had an excellent relationship, the maquila has been a stimulus for investments of Brazilian businessmen in various sectors, such as manufacturing. Have an environment that pro-motes tax exemption in the processing of pro-ducts, abundant labor, low tax burden, access to more attractive credit lines in Brazil and access

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to other markets, such as China undoubtedly it has contributed to this integration.

The growth of business between Brazil and Pa-raguay has shown that Brazilian businessmen are seeking this alternative in another country also the issue of lack of manpower in manufac-turing, for young people, especially, have been leaving the industry to work in shopping sto-res, example, even with a lower salary. Howe-ver, what happens in Paraguay is the reverse: in 30 years, the Paraguayan population has tripled and today 70% of it is in the range of 30 years of age, aiming to formal employment in manu-facturing. The item “qualification” must be bet-ter worked out, young people there want and need jobs, struggling to learn it soon. Compa-nies from Santa Catarina and mostly from São Paulo come quite enjoying this incentive.

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OUR NEIGHBOUR

The Maquila project can be organized in two ways. The first is to know the country in which they want to invest and, therefore, have access to professional bodies, government, and espe-cially in the commercial sector of the Brazilian embassy in the country. The second is the study of technical and economic feasibility, which will be presented the OAS information necessary for the operation of format, taxation, costs, invest-ments, market potential and estimated revenue.

The bilateral trade amounted sector last year, US $ 105 million, half of Brazilian exports to Paraguay. If we consider the tissues, the amount is more than doubles. “The Brazilian industry requires that the fabric comes from suppliers in Brazil, such as jeans, one of the world’s best, and even swimwear and fitness. As the cost reduc-tion is enormous, the business owner does not need to appeal for the Chinese tissue. With the

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productive complementation, we are helping the Brazilian textile sector that internally suffers great competition with the Asians.

MADE IN PARAGUAY

Appear on the label the origin of the product, such as Made in Paraguay, it is one of the requi-rements for those who want to produce in that country through the maquila. There is no pre-judice against it, and in my opinion have a pro-duct with the label Made in Paraguay, or Made in China is the same thing. As a consumer, what I want is to have a quality product at the right price, and this quality we realized in the facto-ries whos settled in Paraguay and produce and export there.

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DIFFERENCES OF COSTS OF TAXATION IN RELATION TO BRAZIL

For those who want to produce in the neighbo-ring country, there are strong incentives within the Maquila Law, such as: single tax (1%); tax recovery above the value added tax (VAT); sus-pension of customs duties; remittances abroad tax-free; zero rate for Mercosur, provided it rea-ches its source. In total, this decrease being 15% to 50% depending on the products.

The maquila companies are nourished by worke-rs who earn little more than the minimum mon-thly salary of 1,658,232 Guarani (R$ 832) and benefit from more flexible labor legislation.

Inspired by the Mexican model, Paraguay is of-fered as a “strategic ally” for companies from neighboring countries who want to reduce costs, especially Brazil, which guarantees cheap labor

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and a single tax of 1% on the value added to their products.

In the first quarter of this year (2014), the ex-port volume reached nearly US $ 74 million, which confirms the success of a regime that has attracted mainly companies in the textile sec-tor but also the chemicals and pharmaceuticals, footwear and leather, electronics or services of “call center”.

Matrices are exempt from any tax or customs duty and only take a single 1% tax on the value of the product within the Paraguayan territory. With this tool, Paraguay is strengthened as a ga-teway to Mercosur, offering the investor good condition in production costs and tax, which transform the country into “strategic ally for the production and participation in international trade,” announces the Industry Ministry Para-guay on its website.

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In fact, 72.5% of exports in 2013 were made to other Mercosur countries, especially Brazil and Argentina, and the other went to Thailand, In-donesia, China, USA, France, Italy, Mexico and India.

Companies maquila fed by workers who earn little more than the minimum monthly salary of 1,658,232 Guarani (R $ 832) and benefit from a more flexible labor legislation in Brazil or Ar-gentina.

The maquila is positive for the initial stage of development of a country, is a small step fo-rward for the fledgling Paraguayan industry, but in the long term is not the solution, because it creates a working class conditions with more than questionable.

Technically, it is a system of temporary admis-sion, the company settles in Paraguay with raw materials brought from anywhere in the world

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and has a preferential tax treatment; your mer-chandise never arrives directly to the Paraguayan market, so no taxes are levied them.

The immediate precedent model is Mexico, which created an industrial network of assembly plants “and attracted 99% of foreign investments from the US. But has good and bad things, you can create an industry, but the huge benefits not return to their country of origin, Mexican offi-cials working in a very tough situation and there is no transmission matrix technology.

In Paraguay, most maquiladoras are Brazilian, although there are also those of Argentina, the Netherlands, Germany, Taiwan, China, Cana-da and South Korea, so the investment is “more dispersed and there is no dependence on a single client, such as In Mexico”.

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LOGISTICS AND DISTRIBUTION IN CONTINENTAL DIMENSIONS

There is not a single multinational industry that ignores Brazil in their growth strategies for the coming years. The Brazil attracts businesses and investors from around the world. More than ever, our country is a market of great opportu-nities, however the choice of where they will be held investment is vital for a country as large as Brazil. The choice can be the difference between loss and profit of a company in our country, is the regional tax incentives, is the cost of logisti-cs, because when we assess the logistics perfor-mance of Brazil from the logistics cost in dollars - which includes the cost transport, storage and storage - we see that Brazil Cost is quite high compared to its competitors.

Transport in Brazil is very expensive, it is esti-mated that the logistics costs commits 13.1% of net revenues of Brazilian companies.

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The higher the logistics cost, the lower the mar-gin and not always companies have condition to pass on to the final price of products an increase in logistics costs.

The logistics costs in Brazil are around 12% of GDP, while the ratio is 8% of GDP in the Uni-ted States. If the Brazilian logistics had the same performance of the US, the country would have a savings of R $ 83.2 billion per year.

Our logistics infrastructure investment level ne-ver rose from 2% of GDP to just the last year.

The sector that has the highest revenue com-mitted to logistics cost is the capital goods (22.69%), followed by construction (20.88%). The smallest commitment is the chemical in-dustry (6.29%). In the case of capital goods, the equipment will assembled and, sometimes, the truck carries only one device. In the case of

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soybeans and iron ore, you have to own rail or truck with more capacity.

The long-distance transport is what has most contributed to the Brazilian logistics costs. This item is responsible, according to the companies for 38% of spending, followed by storage (18%) and urban distribution (16%).

Among the main reasons given by companies for the increase in logistics costs in Brazil are roads in poor condition (54.5%), government bure-aucracy (51.2%), loading and unloading restric-tions in major urban centers (49.6 %) and lack of modal competition (48.3%).

To reduce logistics costs, 70.7% solution would be a better management of highways with mul-timodal integration as a solution.

The railway is a transportation alternative would leave the road down by the lower rail freight,

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which would increase competition and thus re-duce the amounts.

According to estimates, the Brazilian logistics costs would be 15.4% of GDP, more than 2 ti-mes the American percentage. It is noteworthy that Brazil has a much higher logistics costs as a proportion of GDP than other Latin American countries such as Chile and Mexico.

It is observed that the logistics cost of exporting industries 48% refers to the share of transport and 21% for the port cost, the share of stock cost corresponds to 22% of the total and storage installments and administration correspond to 5% and 4% respectively. As for the agricultural sector, the shipping cost is 80% of total logis-tics costs, with the port portion accounting for 14%.

The reasons for the high representation of these costs is given by reason of the road transport

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accumulates nearly 60% of Brazil’s cargo trans-port, despite being the most expensive means of transport after the airlift.

Given the size of Brazil and the predominance of bulky and heavy loads, such as minerals and grains, the use of road transport at the expen-se of rail and water modes becomes even more apparent the inadequacy of the current array of Brazilian transport.

The mesh Brazilian railway is 28,445 kilome-ters. While the US is 23.4 km of railway per thousand km2, Brazil has only 3.4 km per km2.

In addition to small compared to the length of the country, the rail network is also poorly dis-tributed; almost all the railways are in the South and Southeast.

The extension of the road network is about 5 times greater than the extension of the railway

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when we consider only paved roads; when we consider the non-paved roads too, we got an extension of the road network 50 times greater than the extension of the Brazilian rail network.

As regards the logistics are not prepared to meet global trends mainly due to lack of investment in transport infrastructure in all modes but par-ticularly in port, rail and water sectors.

River transport suffers from the same problems of navigation and seaports, which is the lack of government resource for proper maintenance of waterways, and another problem is the ma-nagement of water resources and water dispute for irrigation, generation electricity and water transport;

Brazil has more than 40,000 km of navigable waterways between and potential for naviga-tion, its current use is very low, we have to value / invest in transport model.

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The administration of Brazilian ports, with the exception of Imbituba port in the state of San-ta Catarinal (south) is public, and the model adopted in Brazil, the terminals are private, but services such as port infrastructure, dredging, water, energy electricity, access to the terminals it is the Administration which is public. Lack of public funds does not permetido the adequacy of Brazilian ports to international competitive-ness.

The ports are the most important parts of the logistics systems of a nation and its moderniza-tion will be the key to becoming more competi-tive with international benchmarks.

Although there has been significant improve-ment in the service offered by the railways since the grant, trucking services are inefficient albeit only possible lower rates due to overloading of trucks and, in most cases, not including the cost of depreciation of vehicles for the calculation

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per person. This makes the fleet is in poor con-dition because they lack money to renovate it.

The result of the overload translates into very negative effects on the road network that, by it-self, already suffers from a lack of maintenance.

This scenario affect the adoption of integrated logistics door-to-door, to meet the just-in-time and reduce inventories, technological develop-ments in production processes along the produc-tion chain, adding value along the chain - pro-cessing, reduzed cost, increased production, the introduction of new non-traditional products from the raw material, increasing the scale of production, among others. It is estimated that to correct the current desquilíbrios and stop the deterioration of infrastructure as well as to build new infrastructure Brazil would have to invest about US $ 20b / year or double that invests to-day. Countries that are growing at 7% annually invest about 5-7% of their GNP in infrastruc-ture while Brazil is investing only 0.6-2.1%. In-

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vestment in roads, railways, ports and airports attract more private investment and will be the wave of growth for the next decade, due princi-palmenteo Deficit infrastructure across the cou-ntry. Expand investment opportunities and in-crease the return on private investment. Over the past six years there have been many investments available for new railways. But implementation has been slow and sobbing for lack of good en-gineering and environmental. The private sector is increasingly concerned with its logistics and is professionalization it’s staff, preferably using suitable operators and better managing their in-ventory and tracking their burdens.

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BRAZILILIAN COSTS

There are several reasons why Brazil is compara-tively more expensive than other countries, but the most important are related to investments related to infrastructure that have not been able to keep up with the explosive growth of the last decade, putting great pressure on roads and ports. This means that farmers often pay four times more than their American counterparts to carry their goods.

Another important reason is the taxation system. Brazil collects about 35 percent of its economic output in taxes, well above the Latin American average. The tax code is too complex, forcing companies to spend on average 2600 hours cal-culating how much they owe to the government. It is around 14 times the time typically spent in the United States and by far the largest in the world.

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High tariffs and an absence of trade agreements mean that Brazil is essentially a large and auto-nomous domestic market. This helped the cou-ntry shielding the supercar world crisis of 2008 and to nurture an active manufacturing base, but also makes it difficult for the Brazil find other sources of growth.

Companies also face difficulties in finding skil-led labor, and having to pay higher wages to keep employees they already have, another ma-jor cause of the “Brazil cost”.

ATTEMPTING TO EXPORT THE BRAZILIAN COSTS

For a group of large Brazilian companies ex-pand their activities abroad is vital. Only in this way can gain scale and compete on equal terms with its competitors. We know that globaliza-

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tion brings many benefits to the country, which gains the opportunity to increase exports and create jobs. Yet our government has other plans for this created a Provisional Measure, which deals with, among other things, the taxation of profits earned abroad.

If approved the text, companies will be at a di-sadvantage compared to its competitors. The profits of foreign subsidiaries are taxed at 34%, ie the same rate charged on the profits made in Brazil. Few countries have as a high income tax, and the average in developed countries is arou-nd 25%. To pay less tax, national companies establish holding companies in countries where Brazil has double taxation agreements.

The Provisional Measure comes to collect the difference between what is paid abroad and the internal rate. Companies that do not recognize their debts receive billions in fines. No commer-cially relevant country does not tax profits ear-ned abroad by the host country of the company.

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In the United States, only the profits remitted is taxed, while in Brazil, profits are taxed at 34%, even without the remittance of dividends, so it is cheaper to transfer the headquarters of the na-tional capital company abroad, making Brazil has branches of its own companies. Unable to reduce the effect of cost Brazil, our government has found a way to export the costs, but has hit the national business expansion plans.

BRAZILIAN COST IN COMPARISON WITH THE REST OF THE WORLD

Comparing across countries considered emer-ging and has presented a reasonable economic growth, Brazil is one of the most expensive cou-ntries to live and do buisinesses. In practice, Brazil is less competitive in terms of costs for companies than China, India, Russia and Mexi-

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co needs structural reforms to improve compe-titiveness.

Compared the cost competitiveness of Brazil, Russia, India, China and Mexico, China and India are the leaders among all countries, with overall business costs, respectively, 25.8% and 25.3% below the base reference, which is the United States (basis 100) .The low hand labor costs increase the competitive edge to China and Índia.A China has the lowest costs in the manu-facturing sector, while India has the lowest cost in the industry services.

The Brazil as well as being less competitive among the emerging business costs in Brazil is approaching the levels of developed coun-tries. For example, the cost in Brazil are only 7% lower compared to the United States, whi-le China has cost 25.8% less than Americans, followed by India (-25.3%), Mexico (21%) and Russia (-19.7%).

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Brazilian wage levels, including the minimum wage, are significantly above those of other cou-ntries of high growth and high tax burden also impacts the overall performance of Brazil costs.

The UK and the Netherlands, among develo-ped countries, are the low-cost leaders, where it is business recommended. Currently the UK is in the first position in the ranking, driven by a combination of lower costs with hand labor in post-recession period, lower cost of utilities and efficient industrial facilities. The govern-ment also promoted tax cuts for corporations. The devaluation of the pound sterling relative to other currencies due to the European debt crisis, has further improved the country’s com-petitiveness.

The hand labor costs vary greatly among develo-ped and the emergings countries. But other bu-siness costs incurred in developing countries are similar to those in developed countries, or even higher in some cases. Canada and the United

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States, for example, offer rental costs of smaller industrial facilities than those offered in China, Mexico, Russia and Brazil. Already India, the Netherlands, Mexico and Germany are the cou-ntries with the lowest costs on office rent. The high tax burden, especially with regard to indi-rect taxes, also negates the savings with low-cost labor in some of the emerging countries.

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STARTING A BUSINESS IN BRAZIL

One of the main characteristics of Brazilian cor-porate governance is the high use of the bure-aucratic machine. To start a business is required 03 months in a slow process and requires many documents, certificates, notary certificates and stamps, which often do not mean and are use-less. Depending on the industry and the cor-porate sector, the rules and regulations can get for the upcoming six months. If your business depends on environmental reports and certifi-cates, we could be talking years for approval. To close a business are required 06 months and the exercise is even more painful and long, because the need for evidence of federal, state and local tax debts only after proven that your company is not liable for the tax machine, your company can be considered closed. The offer shortcuts and “facilitators” processes are common and inadvisable, usually pay more for the same.

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REQUIREMENTS FOR INTERNATIONAL INVESTORS

The foreign individual entrepreneur - individu-al mercantile firm holder, commercial manager of a company or cooperative resident and domi-ciled in Brazil, the government require proof of permanent visa

In practice one should attach to process the cer-tified photocopy of the document provided by the Federal Police Department with an indica-tion of the record. In other cases the temporary visa is required. It is noteworthy exception in which citizens of member countries of Merco-sur and Associated States who have found tem-porary residence two years may exercise business activity provided entrepreneurs, owners, part-ners or directors of companies or cooperatives.

The individual, Brazilian or foreign, resident and domiciled abroad, and the legal entity ba-

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sed abroad, taking part of a commercial com-pany or cooperative must file a specific power of attorney granted to the representative in Bra-zil, is able to receive service of process in ac-tion against these proposals, based on the law governing the respective type of company. The signatures must be certified in accordance with national laws, and approved by the Brazilian consulate in the respective country. Care should be taken to mention that faculty professional overseas who writes said attorney and a transla-tor enrolled before the Boards of Trade.

It is necessary that individuals attach a certified photocopy of your identity document and legal person proof of their legal existence.

Documents from abroad must be authenticated or certified by Brazilian consular authority, as appropriate, in the country of origin, accompa-nied by a translation made by a translator en-rolled in any Board of Trade, except the identity document.

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Foreigners who want to open a company in Bra-zil, in addition to all these formalities must be registered with Securities and Documents all fo-reign origin documents accompanied by trans-lations. Said registration is required to produce effects in the EU agencies, the states, the Fede-ral District, the Territories and the Municipali-ties or any body, tribunal or court.

Interesting to mention the possibility of indica-tion of a foreign non-resident administrator in Brazil in commercial companies without proof of their residence permit. In this case the elec-tion, term of investiture as an administrator, will depend on getting your permanent visa.

The national mercantile society are composed only by individuals residing abroad and or fo-reign legal entities, shall be appointed resident administrator in Brazil.

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Before registering a company where foreign par-ticipate, check the restrictions and impediments as certain corporate purposes. Fulfilling these requirements, the foreigner may file the cons-titution or ownership interest in your company without any hindrance.

BRAZILIAN COMPANY WITH FOREIGN PARTNER OF

PARTICIPATION

The performance of an economic activity by fo-reigners in Brazil, be they individuals or legal entities as well as foreign capital contribution, can be done in two different ways: by operating authorization of an existing company abroad, or through participation in a Brazilian company.

Just to clarify, national society is one organized and incorporated as Brazilian law, and which has its headquarters and management in Brazil, and

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the foreign company (duly incorporated in their country of origin), subject to authorization to operate in Brazil, and need to keep permanently resident representative in the country.

AUTHORIZATION FOR THE OPERATION OF A FOREIGN

COMPANY IN BRAZIL

Is the procedure used for opening “branches”, however, it is a complex procedure and inadvi-sable. This is because the authorization shall be given by the Brazilian Government, through the Ministry of Development, Industry and Foreign Trade, and can be revoked at any time in defen-se of the national interest.

The company does not need to have its head-quarters and management in Brazil, but should, however, keep permanently representative au-

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thorized to answer for all acts of society, inclu-ding service of process in lawsuits.

PARTICIPATION OF FOREIGN COMPANIES IN BRAZIL

Foreign participation in Brazilian companies is largely regulated and permits, including the incorporation of a company formed exclusively by foreign partners (individuals or companies), since named a resident administrator in Brazil.

In the case of nationalization of foreign com-panies operating in the country, through the transfer of headquarters and administration.

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TYPES OF COMPANIES IN THE BRAZILIAN LEGISLATION

Brazilian law describes several formats for legal entities, and the most used are the micro and small enterprises, registration as an entrepre-neur, society and the corporation.

In none of these types of companies there is res-triction on the participation of foreigners, being resident in Brazil or not. Only for micro and small, the law prohibits foreign participation domiciled abroad.

In other cases, the temporary visa, is sufficient for entering the foreign request for residence in the country. The partner in Brazil needs nothing more than the permanent visa.

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INDIVIDUAL ENTREPRENEUR

It is anticipated the possibility of alien registra-tion as an individual entrepreneur in Brazil.

The advantage of registration as individual en-trepreneur lies in dispensing other business part-ner. In this mode requires permanent residence in Brazil and allows for personal accountability for any actions that may be performed in the name of the legal entity.

LIMITED LIABILITY COMPANY

Established through the participation of at least two partners, who can administer personally or by appointing an administrator.

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The partners are liable for acts of society to the extent that the capital invested (paid-up capital), and your personal assets will only be reached in extreme cases, usually when configured purpose of deviation from the company or equity confu-sion. However, for certain acts that require au-thorization, such as import / export of goods, great investments mounts or in strategic sectors, public agencies may deny approval if formally paid-in capital by shareholders (those indicated in the social contract) is negligible.

ANONYMOUS SOCIETY

Company whose equity is divided into shares, unlike limited companies whose capital is divi-ded into limited liability.

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If the corporation is opened, its capital is free-ly traded in the capital market, open to invest-ment from individuals or groups of investors. If the company is closed, the sale of shares is not open to investors.

Corporations follow a series of procedures and formalities regarding its functioning, precisely because configure large companies focused on large investments. Due to the significant impact that the performance of their activities may have on the economy, they are also required to prepa-re and publish reports and standardized econo-mic swings internationally.

Thus, companies are not flexible, but allow the input of anonymous investments in which the partners need not be involved in management decisions, only receive dividends and monitor the increase or decrease in the value of its sha-reholding.

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Admit, such as limited investment by foreign partners without residence in Brazil, since the-se are not your administrators. In the case of a group of companies, the administrator needs to be a Brazilian citizen

ACTIVITIES IN THE FOREIGN PARTICIPATION IS PROHIBITED OR

RESTRICTED

Some economic sectors are closed to foreign ca-pital, due to its strategic position in the national economy or the public interest involved in the performance of the activity. Are set mostly in the Constitution, they are:

newspapers companies and sound and image broadcasting companies may not have foreign participation. As for the cable TV companies such participation is permitted, provided that at least 51% of the capital as well as the adminis-

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tration, whether belonging to native Brazilians or those naturalized for more than ten years;

mining companies and hydroelectric power: should consist of more than 50% with Brazilian capital, and managed by Brazilian citizens;

airlines, bus companies and cargo: the grant will only be given to companies based in Brazil and at least 4/5 of the share capital with voting ri-ghts must be Brazilian, and that must be admi-nistered by a Brazilian.

cabotage: the companies operating in this area must be more than half of Brazil’s capital, and managed by Brazilians.

Health services: health care companies may not have foreign participation except through dona-

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tions from international agencies of UN Coo-peration entities Technical and Loan Financing.

The participation of foreign capital in financial institutions is subject to approval by the Bra-zilian Government, if it considers that there is national interest.

It is prohibited or restricted (in some cases) the participation of foreign capital in the following activities:

Development of activities involving nuclear energy.

Ownership and management of newspapers, magazines and other publications as well as ra-dio and TV networks.

Health services.

Rural properties and businesses in the border area.

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Post office and telegraph services.

Airlines with domestic flight concessions.

Aerospace.

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PUBLIC BIDDINGS

The brazilian policy on protection of bidding competition is governed by the law number 12.529 of 30 November 2011. Exploring the Government Procurement and enter the Brazi-lian public sector, as indicated by international investors is the acquisition of a company with a set of technical assets suitable for competi-tion in public procurement contracts and go-vernment procurement. The fusion process and national business acquisition will make it quick and assertive framework process laws, rules and regulations of the activity.

WHO REALLY MAKES A BID

Normally, the body responsible for the purcha-se is the one who prepares all biddings. Some

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public agencies have purchasing department. Others departments have responsible employe-es.

There are also agencies that use the structure of other departments more familiar with the pro-cessing of the licitação. Other existing form is when government agencies create the so-called Standing Committee of Licitação.Essa commis-sion is formed usually by a president and two other officials. Depending on the bidding, a te-chnical body, called “support team” is included in the committee so that the technical details is discussed by experts.

The problem begins when the government has no structure, technical capacity or adequate re-sources to develop all public procurement noti-ces, since it inserts in high administrative costs. Thus, “may” be that responsible for the prepa-ration of biddings is the same companies that are already contracted or who wish to be hired. So these notices may undergo subtle changes

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that end up distance and eliminate competitors in bidding contests. Can be additions of single items or unique requirements that go to direct the winner of the contest. Therefore companies that begin to provide services remain for several years and end up perpetuating within the pro-cess. “You can” be quite normal for a bid already has one or a group of winners previously esta-blished. Surely it is fully possible to consecrate the legitimate winner of a public tender without the use of some devices considered unlawful, for this is due to count on a team of staff well trai-ned and able to identify the full scope of the bidding process, is what that is expressed in the announcement or what is not written, provided that the following procedures are followed:

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WHO CAN PARTICIPATE

Any company can participate in a tender, in-cluding micro and small companies. However, several parameters are required for each bid. A major one is that the applicant must be current with their taxes.

The company must be regulated legally, or have updated social contract and in force. The com-pany must also have the financial capacity to join the business and technical expertise to the service that will provide or product you provide.

STATE ‘CAN’ PAY MORE EXPENSIVE THAN NORMAL MARKET?

When a public agency will make a purchase, it is a small price research on the market (by pho-ne and email, for example), and provides the

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amount that will be spent. This research process although is very fast, and it is very important since the price that is determined is the value limit for the bidding. The government cannot pay more than the searched value.

At the time it is decided the value, it is possible to set the bidding modality to be used in ac-cordance with the law 8666. For the choice of trading, the criterion is not price range, but the nature of the product or service.

The state “can” pay more for that hires and con-sumes comparatively than practicing in the pri-vate market for two main reasons; the first is the probable existence of tuition fees, which majo-ram prices and secondly because the pay schedu-les are not respected by the State inflicting the contractor a default which will certainly genera-te stresses of cash flow, which are usually equa-lized by financial leverage third parties (banks), generating interest payments and thereby rai-sing the final price. As these delays in payment

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schedules are already public science, prices are already experiencing increasing the likely delay of payments and its financial consequences.

Other late payments are voluntary and occur by the need of the government was to “close” the accounts in accordance with the Law of Fiscal Responsibility, so the default is more elastic en-ded a term of government.

The default is quite pronounced in periods of late political mandates, with the worst receiving schedules are the 03 first months after the elec-tion and may become more pronounced in case of change of government, because who assumes will definitely make a compliance aditoria.

Thus depends on the public agency’s choice of modality. However the Brazilian legislation re-cently forced the government to give preference always to electronic trading.

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TYPES OF BIDDING

There are three basic types of bidding. As you will see, the lower price modality is not always the best:

Lower price - in this case, what counts is the lowest price. Theoretically, the lowest price may reach zero (or even negative price). Many com-panies end up accepting lower prices than the economically viable because it interests them other factors such as linking the image to a par-ticular project or the conquest of a new custo-mer. For some bids, the lowest price is limited to what can be feasible. This is the case of major public works.

Best Technique - In some cases, especially when the work is complex, the public agency may be based on technical parameters to determine the winner.

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Cheapest and Best Technique - In this case, the two parameters are importants. The bidding re-quired documentation itself must be clear and complet, without any lack of information.

DISCLOSURE OF THE BIDDING

Bids have been seen as a bureaucratic and len-gthy process. In Brazil, they lasted four to six months on average. However, with the creation of trading average time to proclaim in hiring mode is 19 days.

The company must prove:

Legal Empowerment - are documents such as commercial registration or articles of associa-tion of the company.

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Regularity Audit - are documents such as regis-tration in the General Taxpayers’ Registry and regularity tests on Public Finance (federal, state and municipal) and Social Security.

Technical Qualification - are documents such as registration with the competent professional body and fitness of proof for the activity signed by third parties.

Economic and Financial Qualification - are do-cuments such as balance sheets and financial statements of the company and negative certifi-cate of bankruptcy.

It is common after bidding, public bodies pro-long the contracts and the maximum terms ex-tension allowed are five years.

It is important, however, keep in mind that des-pite winning the bid, the company must fulfill the contract to the letter, if not it is subject to

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penalties such as fines, contract cancellation and even have the name of your blocked company to other bids within a period of up to five years throughout the public administration.

DIFFERENTIAL SCHEME OF BIDDING (DRC)

The federal government introduced a new type of bidding, the Differentiated Regime of Bid-ding - DRC in order to “increase the efficien-cy” in public procurement and competitiveness, promote the exchange of experiences and tech-nology and promote technological innovation. The DRC was only applies to tenders and con-tracts for carrying out:

Olympic and Paralympic Games in 2016;

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infrastructure projects and contracting services for airports of the capitals of the federation sta-tes distant to 350 km of the host cities of the world;

Growth Acceleration Program - PAC;

engineering services under the Unified Health System - SUS;

to bids and contracts necessary for the execu-tion of works and engineering services within the public school systems.

CRITICAL TO DIFFERENTIAL BIDDING SYSTEM

The approval of this project must cause gre-at damage in Brazil because the new rules will apply to states, municipalities and the Union.

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The new procurement model that “eliminates basic design complicates the monitoring and control of costs (of works), the quality control”. The special arrangements for hiring transforms a public work in a private work of whoever is in government and it’s a open door to corruption.

The new model opens loopholes for interested contractors in the bid, in the absence of a re-ference price set by the government, can raise the final cost of the works. “It will be another instrument problems and distrust.

TAXES BURDEN

The Brazilian tax system is complex, dynamic, changing and should be considered as one of the most important elements in the decision to enter the Brazilian market process, either by im-

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porting goods and services or the internationa-lization of operations for the Brazilian territory.

Brazil is one of the countries with the highest tax burden in the world. This is also a promotion force of evasion, informality and thousands of dilatory legal questions and a number of other factors.

Are 91 types of fees, levies and taxes that remo-ve the productive and employment sector more than 1.5 trillion reais per year. Part of this value returns in social programs for hyposufficient part returns on utility, part finance infrastruc-ture projects, but large portion disappears in go-vernment funding.

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THE MAIN TAXES

The Brazilian tax system, about 50% of the tax burden falls upon consumption and about 30% on equity. Thus, the vast majority pays taxes, but the general public cannot see the weight of taxes on your daily consumption.

They are divided as follows:

• Balance: In this case the tax will incindir on certain assets, such as the property tax (real es-tate), property taxes (cars) and ITR (farms).

• Income: In this case the tax is calculated based on the income of a person or entity for a cer-tain period. The best example is the income tax.

• Consumption: Here, the tax may be charged indirectly, are taxes levied at each stage of the purchase. Are taxes that fall several times on the same product throughout its sales cycle. Occurs for example with the ICMS and ISS.

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FEDERAL TAXES

Federal taxes are those aimed at union or gover-nment federal.

• II - Tax Import.

• IOF - Tax Financeiras.Incide Operations on loans, financing and other financial transac-tions, and also about actions.

• IPI - Tax Product Industrializado.Cobrado in-dustries.

• PIT - Income Tax for Individuals. Focuses on the citizen’s income.

• Income tax - Income Tax Jurídica.Incide on corporate profits.

• ITR - Tax on Rural Land Property.

• Cide - Contribution on Econômico.Incide Domain on oil and natural gas and their deri-vatives, and on alcohol fuel.

• Cofins - Contribution for the Financing of So-cial.Cobrado Security enterprises.

• CSLL - Social Contribution on Net Income.

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• FGTS - Service Time Guarantee Fund. Percen-tage of the salary of each worker on the payroll deposited by the company.

• INSS - National Social Security Institute. Per-centage of the salary of each employee charged the company and the worker to health care. The amount of the contribution varies accor-ding to the area of operation.

• PIS / PASEP - Social Integration Pro-gram and Service Asset Forma-tion Público.Cobrado companies.

PROPOSED TAX REFORM - 2016

The government’s proposal to reform the PIS / Cofins can raise the tax burden of the servi-ce sector. The proposed reform of PIS / Cofins being finalized by the economic team to be sent to Congress is already criticized. Parliamenta-

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rians, tax experts and representatives of the pro-ductive sector fear that the plan, which provides for the unification of the rates of both taxes and their collection for only one of the schemes in force today, end up increasing the tax burden segments of crucial economy to the Gross Do-mestic Product (GDP set of goods and services produced in the country).

This is the case of services. Nowadays, most of these companies pay the PIS / Cofins under the presumed profit regime. This means that the payment of taxes is made on a cumulative ba-sis at a rate of 3.65%, which does not genera-te credits. What the government has indicated behind the scenes is that the collection will be made of non-cumulative, with the highest rate of 9.25%, from generating credits for the pur-chase of all raw materials purchased in the pro-duction chain. The problem is that the service sector has almost no inputs can generate credit. That is, in practice, the weight of tax would be greater.

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The service sector is very sensitive, and an incre-ase in their tax burden would now having a very negative effect. The companies would go to the informality. The government is punishing the segment more surrender in the economy, noting that the sector accounts for almost 70% of GDP.

BRUTAL INCREASING TAXES

Another segment that fears the reform of PIS / Cofins is construction. As in the services sector, there are several companies that have more costs than labor inputs and thus would be unable to reduce the tax already paid. Recalling that the intensive sectors in manpower will be the har-dest hit: The big problem is that labor does not generate credit, and this is the biggest cost to sectors such as services and construction.

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The problem is not the unification of the rates, but the mechanism to be adopted for the contri-butions, on the value added.

Most service companies are small. They have no way to credit why not buy almost anything, only material for their own use. And there is an aggravating factor: most of these companies profit clears the deemed profit method without the need for bookkeeping. Depending on the rate and size of the company, there will be a bru-tal tax increases, between 80% and 90%. The government will kill the service sector, at a time when it should minimize the effects of the crisis on the economy and avoid layoffs.

STATE TAXES

• ICMS - Tax on Circulation of Goods. Also fo-cuses on the interstate and intercity transpor-tation and telecommunications;

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• Property taxes - Tax on Motor Vehicles Proper-ty;

• ITCMD - Tax Cause Transmission Mortis and Doação.Incide on inheritance.

MUNICIPAL TAXES

• Municipal taxes are intended for the cities go-vernment:

• Property tax - Tax on Land Ownership and Territorial Urbana.

• ISS - Tax Serviços.Cobrado companies.

• ITBI - Tax Inter Vivos Property Transfer. Fo-cuses on the change of ownership of real estate.

ESCALATION OF TAX BURDEN

A problem that occurs in some cases double ta-xation or call the cascading taxes, which occurs

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more than once in the tax on the same taxable event.

As the tax burden in Brazil grew 9.33%, a per-centage higher than the national economy grew in the same period, so more and more compa-nies have difficulty in honoring the tributary obligations and go on to become delinquent.

From time to time, the Federal Government launched the tax debts refinancing program (REFIS), but these special installments are not really effective for installments of taxes that are owed to the Union are in fact measures inefi-cientes. Many companies adhere, are a period, and they end up being excluded by default. They end up having differentials against those taxpayers who pay on time and, therefore, end up having “temporary advantages,” a prize to bad payer.

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RECORDS IN TAX COLLECTION

The mark of R $ 1.5 trillion in taxes paid by Brazilians in 2015, shows that, once again, the collection grows faster than the economy. The amount reached today confirms that the total taxes for the government coffers this year has registered real increase of around 3%, the per-centage is higher than expected economic grow-th in 2016.

TAXATION RETURNING TO THE SOCIETY

For the fifth consecutive year, Brazil is the cou-ntry that provides the worst return of amounts collected with taxes on quality of life for its po-pulation.

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United States, Australia and South Korea occu-py respectively the first ranking positions. Bra-zil is in 30th place, behind Argentina (24) and Uruguay (13th), when analyzing the return of taxes on quality of life for society.

PUBLIC SPENDING

The Brazilian government is too big, whatever the rule that you use to measure it: the public debt, the tax burden or the total expenditure. High and inefficient public spending, which, over the years, forged a heavy state, is among the main causes of many of the country im-balances such as overvalued exchange rate, the stratospheric interest rates, the large bank spre-ads, endemic corruption, low economic growth.

Each of the three components of the “great sta-te” (taxes, spending and debt) generates macro

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and micro-economic impacts that negatively af-fect the drivers of long-term economic growth: private investment, exports, productivity and inovations. The load of high tax levied on pro-duction, discouraging investment and reducing the competitiveness of exports.

The government resumed in 2016 the CPMF return speech that would generate a additional revenue of R$ 80 billion, even after facing ba-cklash of public opinion. O budget foresees a deficit of R $ 30.5 billion in 2016, the gover-nment is on the challenge cut costs to achieve balance public accounts.

There are ways to achieve this goal the reduc-tion of so-called “discretionary spending”, those not mandatory and that represent about 10% of the budget.

Survey of the NGO Open Accounts, which makes monitoring of public spending, has iden-

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tified about US $ 20 billion in non-compulsory expenditure “capable of cutting” . According to the institution, these expenses are utility bills, cleaning services, flights and rental properties, among others.

In the evaluation, the government will only make an adjustment “to the necessary extent” when you try to modify the structure of com-pulsory taxes or raise spending. But as for that it needs the Congress, “it is necessary to adopt their own measures.”

“One of these measures could be a reduction in non-compulsory expenditure.

Even though they are only 10% of the budget, of these expenses totaled R $ 20 billion in 2014 [expenses “subject to court”]. If the government has cut 30% [of R $ 20 billion], which is not much, already would be R $ 6 billion less “in an account roughly.

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A reduction target of 20% to 30% with non--compulsory expenditure is feasible. To get the immediate result of this [cost-saving], you need to control and cutting mandatory costs.

The “focus” of the government should be cut-ting spending on expenses such as telephones, property rent and electricity bill.

One of the problems to be faced is that the go-vernment cannot move on compulsory expendi-ture because it passes through Congresso.Então, has no alternative. The government has to redu-ce non-mandatory spending. “

The current model of development and imple-mentation of the budget is “extremely cast” and, because of that, the government has reduced in-vestments.

The government should cut discretionary spen-ding.

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A BRAKE ON GROWTH

In Brazil, it works to five months a year just to pay taxes. The calculation takes into account ta-xes on income, wealth and consumption.

The highest rate (27.5%) falls on lower inco-me than in countries like the United States, England and Argentina. Brazilians with lower income also collect, proportionally more than higher extracts workers. We are in a process of private sector efficiency of extraction to finance public funding. This finding may trigger erro-neous conclusions, such as the need to increase taxation on higher incomes, but the tax is alrea-dy too much for everyone.

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ICMS - TAX ON THE MOVEMENT OF GOODS

The ICMS is a “plurifásico” tax, is a tax levied several times over in the chain of a particular commodity and also has different aliquots in different States and that creates a national tax War, contributing to some, harming other, but who pays the bill is the society. The greater au-tonomy of states in GST management, in turn, generated a fiscal war in search of investment attraction.

To escape the taxman many companies remain small and informal, which makes them less pro-ductive. The lack of roads, ports and airports raises business costs and prevents access to new markets at home and abroad. The financing of the public deficit drains saving the country, which could be being invested in expanding production.

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The chaos in large urban centers generates in-dustry lost productivity and services. The tax war creates legal uncertainty for businesses and states due to legal challenges that entails.

In addition, states compensate for the loss of revenue generated by the incentives increased taxation on sectors such as electricity and te-lephone, which translates into higher costs of production enterprises.

TAX SUBSTITUTION

To give you an idea of tax complexity, describe a form of taxation where there are several species of tax substitution: replacing forward, replace-ment back (or deferred), and the replacement it-self. In the first case (replacement forward), the tax relative to taxable events that should occur is subsequently collected in advance way, on a

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presumed tax basis. Thus, the example guide, the industrial establishment that sells a certain product, collects the tax due by himself, and also the tax that would be payable by the distri-butor and the retailer. In order to calculate the state should disclose an alleged tax basis, in ac-cordance with criteria defined by law. This cal-culation basis must observe the reality of each market, for purposes of determining the final price in each transaction.

The replacement back, or deferral, what ha-ppens is just the contrary. Only the last person who participates in the goods movement chain is paying tribute, in a comprehensive manner, including to those already practiced operations and / or its results.

In the pure and simple substitution, the taxpayer in a particular operation or provision is replaced by another that participates in the same legal business.

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The amounts paid as tax substitution are con-sidered final, unless the presumed taxable event does not take place, in which case the taxpayer may request the tax refund.

A DEFAULT IN TAXES TO STRENGTHEN THE BUSINESS CASH

FLOW

The national tax burden is too heavy a burden for the vast majority of domestic entrepreneurs, and is really very difficult to identify a company that has no debt or taxes in installments throu-ghout its history.

One of the primary symptoms of problems of lack of competitiveness of a Brazilian company it is noticed when she goes to misappropriate taxes due to meet in order to finance their own working capital. This practice is observed that

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the interest rate charged by default by the go-vernment is lower than the interest charged by banks in this way is an obvious choice to be in-debted to the Government of that duty to the banking system that charges high rates interest. The Government is also very time consuming to perform a charging and when it does, can be tri-ggered installment and use tax planning to delay the payment.

Some companies however, cannot and will not be able to become competitive due to factors related to import goods and the lack of defense instruments of the internal market and end up being “forced” to adopt survival practices and go on to become delinquent or adopt malprac-tices.

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TAX EVASION “CASH FLOW 2”

The term two cash refers to funds not accoun-ted for and not declared to the relevant super-visory bodies of the executive branch, and the Money Laundering and Criminal Organization of the Judiciary, the Supreme Court, crimes far more serious.

The Box 2 is used by some companies that fail to deliver or send invoices with a lower value to the transaction carried out, so that less taxes are due and must pay the difference to the public treasury, with fine. In a way to declare values of the invoices to the regulatory agencies, shall examine lower taxes payable to the treasury. The difference is the slush fund, “forgetting the Company Counter” thus only accounting and book-and thus scripturally fixed under the Na-tional Treasury, with due penalty interest and also due to the public treasury.

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Ie, two box is one of the instruments used for tax evasion, which is financial crime, technical - financial in Brazil, with penalty provided for in Law No. 7,492 of June 16, 1986, when com-mitted in the financial field. More broadly, it applies to Article 1 of the 1990 Act for 8137 tax relations, economic and consumption. The Solitude can vary from one to five years and a fine; “” “When not be characterized as money laundering and Organization Criminosa.Muitos politicians and companies are accused in court (first instance), by using slush funds, when of course, also not involved in Money Laundering and Criminal Organization, in instances supe-riors of Brazil Cortes.

TAX EVASION AS A MARKET RULE

In some sectors of the national economy, infor-mality is an obligation and tax evasion is part

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of the own business engineering, is inserted, in-tegrated and resident and has no way to avoid this practice alone. Or participates or is off the market. This occurs when the buyer does not accept pay for the product with the inclusion of all taxes in costs, as this would make the price uncompetitive final sale. This is a systemic way when there are other competing products that offer the same product with the “discount” from the evasion.

Sometimes this type of evasion requires suppliers to issue invoices with half or even a quarter of the original amount of sale, bringing down the amount corresponding to the tax.

This practice completely undermines fair com-petition between companies that have tax com-pliance rules, those that compliance rules are more “flexible” or follow the rules dictated by the market.

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In this environment the decision is not to par-ticipate or take the risks described committing financial crimes and respond to them.

Typically Brazilian entrepreneurs at risk and choose to participate in market rules as they see their business succumb, many never end up answering for the crimes, many receive fines that are paid in installments for a long time and end up going back to the same system.

As the financial system and Brazilian tax are in-terconnected, this practice has been reduced to just the times.

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THE BANKRUPTCY APPLICATION FOR PAYMENT COERCION

The court action for bankruptcy companies de-btor entrepreneurs have been increasingly used for debt collection, it has proved the most effec-tive means for credit pursuit of the specific legal procedures for the collection, such as the very execution or small claims court.

What is interesting to note that the absolute majority of cases, the author of the bankrupt-cy filing does not want to achieve the purpose of the action, which is the declaration of the company break. In fact, his greatest interest is to press the debtor company to make payment to avoid the risk of having declared bankrupt.

Another element that helps the lender is extre-mely negative publicity of the bankruptcy filing, especially in those places where the courts have agreement with Serasa, as from the distribution

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of the action shall appear in the bankruptcy pe-tition against the company business in the da-tabase the credit reporting agency. The applica-tion of constant breaks on behalf of the debtor tarnishes its image and ultimately restricts your credit with suppliers and banks. Other creditors of the company before the bankruptcy filing, also start to adopt more incisive collection pro-cedures to try to ensure receipt before the break decree.

The procedure of bankruptcy action also con-tributes to the success in credit recovery, as the debtor, although it has every right to contest the bankruptcy filing, is obliged to carry out the ju-dicial deposit in the full amount of the debt, with all the extras, at the same time presenting the challenge. What, though the deposit is not required, it rejected the challenge, the bankrup-tcy court must have to enact banckruptcy. The only way to completely stave off bankruptcy and its harmful consequences is to perform eli-sivo deposit preventively.

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The completion of the deposit does not repre-sent the debt confession. In reality it is a very clear demonstration to the judge that the com-pany is not insolvent and that failure to pay is due to the non-recognition of the debt, totally or partially. Even with the deposit, the defen-dant’s opposition will be assessed and, if suc-cessful, the full amount of the deposit will be refunded, duly updated.

In addition to the refund of the deposit, the company sued for non-existent or unenforcea-ble debt may request the payment of compen-sation, which even can be set by the same judge who accepted the defense case becomes evident that the plaintiff acted with manifest intent. Ie, filed for bankruptcy with clear interest in har-ming the other parte.Essa damages may also be pursued in the action itself if the judge absent understand the manifest intent.

So while it is indirectly a persuasive means of collection, the creditor must be careful to not

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sue for questionable debts (eg, prescribed, par-tially or fully paid), you run the risk of having to indemnify the defendant and still have to support conviction for collapsing (payment of the costs and attorney’s fees to the lawyer of the other party).

INSTRUCTIONS TO BANKRUPTCY

Note that not all debt authorized the request falência.Para examine the application on the ba-sis of lack of punctuality, title or enforcement documents must obviously be liquidated and losers, and protestados.Outro important requi-rement is that the debt exceeds the equivalent of 40 salaries minimum.

Fixing a minimum ceiling aims to prevent the filing of informed bankruptcy actions in non--payment of debts from smallest values and tri-

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vializing this type of action, since its real pur-pose is not debt collection itself but recognition of the state of insolvency and the consequent removal of the debtor of its activities to preserve and optimize the productive use of the property, assets and productive resources of the company.

Thus, taking due care, the application of bankruptcy can be used as an effective tool for the collection of debts of individual entrepre-neurs and business companies that were not paid at maturity, provided they meet the requi-rements described above.

There is, however, the ironic risk objective of the action to be achieved, ie, be declared bankrupt the debtor company, although not shown the classic insolvency (lower equity to the value of the debt). In this case, depending on the au-thor’s credit rating in the tender execution, it may be deprecated in receipt of debt credited highest rated, such as taxes and labor rights.

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BRAZILIAN LABOR WORK MARKET

With the decline in GDP of around last year and the unemployment rate reached about 8.5%, the Brazilian labor market is declining. There were about 870 bankruptcy filings in 2015 and it is expected a higher number for 2016.

Brazil is in 37th place in the world ranking of skilled labor, which agree, we are committed to raising the competitiveness in general of our organizations. Our workers are on average five years of school, as opposed to First World coun-tries, which have 10-12 years of school.

In recent centuries the workers were loyal to their jobs, their businesses and their employers.

With regard to companies and careers; they were designed for the employee to rise “step by step”, vertically climbing the chart functions.

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The home time was the scales for a possible pro-motion and / or salary increase. The merit was passed over by companies. The career advance-ment rules were estas.Não was discussed this model.

On the other hand, employment is a contrac-tual employment relationship, which, as a rule, the worker has a term given their qualifications, expertise and experience in exchange for money, symbolized by salary.

Our country is going through a major transfor-mation of the industry workforce for the area of services, and wage labor for standalone as well as the change in the worker’s profile in view of the rapid introduction of information techno-logy and the restructuring effort of companies, leading to an increase in demand for more skil-led workers.

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THE MARKET PREFERS ALREADY EMPLOYED PROFESSIONALS

When the unemployment rate is high, the situ-ation becomes even more common. Many com-panies think that if the worker is unemployed, then you probably made a mistake and it’s his fault. Thus avoids this professional and prefer someone who has the ability to keep their jobs and look for new growth opportunities. This mindset can be considered prejudiced, but still should not be ignored.

The same way as a diploma, hiring can be used as a criterion to evaluate it. The company has no way of assessing the job, then trust the cre-dibility that hiring guarantees to be employed. Companies think: “if current employers trust enough to keep him in the company, then we also want him as our employee”.There is a lack of capacity of those who are unemployed, only one criterion.

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Some skills, different to know cycling, are for-gotten with time. Nurses, for example, staying for a very long time without performing certain procedures need to be re-educated when they return to trabalho.Algumas companies do not have the patience to wait for this process.

Another possibility is that is not updated to the trabalho.Por example market, in the case of wo-men who go out on maternity leave and return two or four years later, it is necessary to update the profession and readequamento the known previously acquired.

THE COST OF STAFF LAYOFFS

Dismiss an employee in Brazil is very expensive, depending on the contractual termination, whi-ch can occur at the request of the worker or the

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employer’s initiative and occurs in many forms, with different labor rights.

Brazilian businessmen may resign, but has to pay for this freedom. To dismiss must be ho-nored or indemnify the prior notice of 30 days and you also need to collect the 50% penalty on the amount deposited in the employee’s FGTS account.

The Early Warning 30 days actually would not be a cost in the dismissal, if the entrepreneur would prefer that the sacked fulfilled. But given the mutual distrust that characterized labor rela-tions in our country, entrepreneurs prefer to pay 30 dias.Dessa way, notice ends up representing a portion of the compensation to desmissed. The other portion is the FGTS fine, equivalent 50% of FGTS deposits made during the period in which the employment relationship prevai-led. Are thus two parts: a fixed, equivalent to a salary, regardless of the bond length. Another

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variable proportional to the time in which the employee has retained ties to the company.

There are different ways of dismissal and for each of them different ways of how to act.

If exploring for example the total cost of dis-missal a worker in textiles and clothing in Bra-zil we’ll find that for a contract of employment where the employee is dismissed after a year of work, the cost to the employer is, on average, 2.83 times the amount of salary received by the worker. Thus, for the employee receives a salary of R$ 730.00, the cost to the company reaches the total amount of R$ 2,067.44. And what’s worse, these costs borne by the formal employ-ment, but does not bring direct gains for worke-rs.

In the production of an automobile, for exam-ple, it is estimated that the direct cost of labor is low relative 10% of the final cost of the car.

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But automakers employ a set of outsourcing ser-vices for operating purposes, such as logistics, maintenance, IT, surveillance, advertising, law, among others, in which the weight of the labor ator is too large.

Additionally, the automaker has auto parts as primary feedstock. These atorentes, they are of-ten installed by the supplier, the cost of directly allocated ator working in manufacturing is close to 40%. In addition, the auto companies need raw materials such as steel and plastic, which, in its manufacture, also use labor. Thus, the in-fluence of labor costs in the final cost of goods and services, and therefore on corporate compe-titiveness levels is very significant.

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DESMISS WITHOUT A CAUSE

The first mode is the unfair dismissal occurs when the employer dismisses the employee, but does not provide a justification. In this case, the worker will be entitled to notice, the balance of salary, compensation for the whole vacation (not taken and proportional plus a constitutional third), the proportional Christmas bonus (13th proportional salary), the compensatory damages of 40% of deposits of Service Time Guarantee Fund (FGTS) and the lifting of the existing ba-lance in the escrow account of the fund.

In addition, it also receives the unemployment insurance guides and additional compensation in the amount of a monthly salary, when dis-pensed in the 30 days prior to the record date of its category.

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DESMISSAL FOR CAUSE

But the worker who is dismissing for cause, ie, one of the justifications provided for in the legal cases of serious misconduct, you will receive the balance of salary and compensation for untaken holidays, plus a constitutional third salary.

DISMISSAL FROM A VOLUNTARY REQUEST

The employee is entitled to receive the balan-ce of salary, compensation of untaken and pro-portionate whole vacation, plus a constitutional third (even if the employee has not completed a year in the company) and the proportional Christmas bonus (13th proportional salary).

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LABOR CLAIMS

Every employee has the constitutional right to enter with a labor action by juridical way, just that there is some disagreement of valroes or completeness of severance pay. Often the em-ployer has complied with all contractual requi-rements with the employee, but this does not mean that the employee does not will join with labor action trying to get extra earnings, to the existence of rescentimentos the relationship or-der between the parties or by the lawyer’s advice.

It is clear that in Brazil there is a tendency that the judge who will hear and decide the fairness of the labor concerned towards the complainant, mainly by the fact that labor laws have not kept up the modernization of work.

Thus, no matter how correct, fair and equitable his company will manage the relationship be-tween employee and employer, there will always

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labor claims and thus their expenses and invest-ments in legal departments.

THE SAFER WAY TO DISMISS A EMPLOYEE

When it comes to employee layoffs, “who does wicked people pay agreements folded” because the vast majority of employees end up joining with a labor claim.

To avoid double pay, the fire causes the dismis-sal occurs Without Cause, do not perform any payment of severance and direct funds to the employee immediately enter with their labor claim and finally after six months and Labour Judge presence make the definitive labor ocor-do. By doing so you will avoid the risk of un-due payment of labor claims, reducing the legal structure and saving financial resources.

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LABOR INDEMNITY

Regarding the deadlines for the payment of se-verance pay, there is a difference if the notice is working modality or indemnity. If is worked, the severance pay will be paid off until the next business day 1 at the end of contract. If the war-ning is indemnity type, the severance pay should be settled by the 10th day after the date of the layoff notice.

IN BANKRUPTCY CASE

In the case of bankruptcy, is the termination of work contracts and the worker has the same ri-ghts as the unfairly dismissed. Labor claims in this case will be processed and adjudicated by the courts of Trabalho.É important to note that after the enactment of the company’s bankrup-

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tcy, this is not subject to penalties for late pay-ment of severance pay provided for.

THOSE WHO WANTS TO BE DISMISSID

The contractual working relationship is, as a rule, the worker provides for a specified pe-riod their qualifications, in exchange of a salary. Many times, this rule is broken by the employee himself, prefering to remain in the unemploye-ment program.

Added the severance pay and fines, salary unem-ployment allows temporary financial assistance, granted in three to five installments, as the value of the last worker’s salary up to the limit of R $ 1,235.91 (2013 values). If the unemployed person, gets a temporary job or without offi-cial registration for the same period of the salary

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unemployment course, he will get a substantial extra income and as we saw above, the return of the individual to the labor market with current unemployment rates showing records low, being unemployed temporarily is a way to improve the liquidity of the personal box. The employee also has a widely used resource to joining Justice with a labor claim, where 90% of cases are favo-rable to the employee.

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NEW WORKERS LIFE’S STYLE AND THE OLD EMPLOYMENT LAWS

Paradoxically, to face the challenge of increasing their levels of competitiveness, Brazil has a labor law of the 40s of the last century. About to turn 70, Consolidation of Labor Laws (CLT) is grou-nded on the premise that all workers are hypo-sufficient because it was conceived in a histori-cal period marked by the predominance of labor in agriculture, by an incipient industrialization process, workers still with low level of training and qualification. There is a strong trade union movement that calls for tougher legislation as the main alternative to govern labor relations and ensure labor rights. No one cannot deny the important role of this legislation has fulfilled for decades, bringing relevant concepts and values for a more humane working relationship.

After seven decades, however, Brazil has beco-me the world’s sixth largest economy, Brazilian

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institutions have been consolidated, the trade unions have been strengthened and the instru-ments of collective bargaining have been valida-ted by the Constitution of 1988.Contudo, the system is still governed, essentially, by the same law, that is, old and inadequate to current times.

It is clear that progress has not occurred so ho-mogeneous. In Brazil coexist today’s realities of the nineteenth century with the other twenty--first century, but the labor law that all must follow is the same. An executive or a qualified researcher for example has his employment con-tracts governed by the same parameters of a ru-ral worker illiterate. Workers are different, with different productive dynamics, with different needs and desires, but treated the same as hypo-sufficient.

On the other hand, if a citizen, even with limi-ted education, solves generate jobs, their level of responsibility grows enormously, even thou-gh he has no knowledge of it.

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Basically, the existing legislation requires that he who is not employed, is hipersuficiente.

Microentrepreneurs can work 80 or 100 hours per week to survive, not lunch right, not a va-cation, not work with personal protective equi-pment. Moreover, an employee, even with high skill and protected by a representative union is perceived as a disadvantage. Negotiations are viewed with suspicion. Not accepted, for exam-ple, that a union negotiate a lunch break of 45 minutes to allow workers to leave a little early from work.

The more you talk the world’s modern work of highly skilled workers who primarily use know-ledge, the more you realize disconnection from the labor system with reality. This limits pro-ductivity, reduces worker gains, increases their discomfort, reduces the legal certainty of the contractor and increases costs, among other ne-gative impacts.

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LEGAL INSECURITY

The mismatch between the legislation and the needs of different situations, the absence of clear rules and the limited space given to negotiations create an environment of legal uncertainty in la-bor relations. In many circumstances the discor-dant interpretations of labor law made by the government amount to make up the uncertain past due to retroactive changes in the applica-tion of legal provisions. In fact, when deciding from overviews that particular standard should have been interpreted differently from that of the law, or even of differently exposed in conso-lidated jurisprudential understandings, it moves the rule for the previous five years, generating liabilities often incalculable.

This framework limits the possibilities of knowing the real dimension of labor liabilities and previden- ciaries and reduces the propensity

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to invest with consequent negative impacts on job creation.

LABOUR COSTS AND PRODUCTIVITY

Another aspect that limits the expansion of competitiveness levels in Brazil is excessive en-cumbrance of formal employment. In addition to wages, formal employment is burdened by social charges for the time not worked, for be-nefits of collective bargaining and company po-licy for ancillary obligations and management expenses, in addition to difficult to predict lia-bilities arising from the interpretation conflicts the legislation.

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LABOR AND SOCIAL CHARGES

The following are costs that should be conside-red as labor and social security contributions:

• The cost to the company opting for Fiscal Re-gime SIMPLE (Commerce and Industry) - Sa-lary salaried is 33.71%;

• The cost to the company opting for Fiscal Regime SIMPLE (Commerce and Industry) - Time Salary is 56.51%;

• The cost to the company not opting for Fiscal Regime SIMPLE (Commerce and Industry) - Salary salaried is 68.17%;

• The cost to the company not opting for Fiscal Regime SIMPLE (Commerce and Industry) - Salary salaried is 96.75%.

For positions of directors, there is the possibi-lity of hiring without the incidence of Social and Labor charges through the adoption of the Statutory Director or Director not employed by

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the laws, but hired in services ruled by particu-lar contract.

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WORKERS LAW MODERNIZATION

To promote labor modernization in Brazil, it should be noted that labor relations model the country wants for the future. It is not difficult to find convergence on the idea of replacing the model currently in place on the other empha-sizing negotiation, based on the representative-ness of the actors and able to adapt to different situations and maximize gains for companies, workers and the country. A modern labor sys-tem consists of a legal framework that addresses the fundamental rights and establishes the rules of the dialogue process between the parties in-volved, with the remainder set for negotiations that take into account sectoral specificities, re-gional and even each company and each worker. In these sense, it would be necessary to replace a model that almost everything is defined by law and very little is traded for another emphasizing negotiation and reduce the homogeneous state supervision.

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Although this is a process of long maturation, there is much to be done in the short to me-dium term. There are many issues that deserve immediate attention because of their potential for irreversible damage to productive activities. Additionally, in the institutional field, and in spite of the recognition of the need to expand the levels of the Brazilian economy competitive-ness, we must reverse the movements that have taken place mainly in the opposite direction, creating additional costs and with the tighte-ning of legislation.

101 CHANGES PROPOSED IN LABOR LAWS

It prepared a document containing a set of proposals aimed at contributing to the moder-nization of labor relations in Brazil. Delivered to the Federal Government through the FIEP,

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this work is called “The 101 proposals,” and in-volved different labor and employers classes, as well as regulatory agencies and proposals have different degrees of complexity.

Many propositions require only normative acts for its implementation, and is only linked to de-cisions Executivo.Outras power are more com-plex and depend on legislative processes. Some others may be implemented by the judicial power. Although the document the document contemplates structural issues of long-term, in it a lot of immediate issues that, if there is provi-sion of social actors, are relatively easy to cope.

a significant number of situations, from a busi-ness point of view has been identified, could be better equalized. In each, we sought to identify an “irrationality” that featured a problem and then evaluated whether its negative impacts. On that basis, it was then prepared proposals related expected earnings and specifies the measures ne-cessary for its implementation.

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The topics are diverse, involving issues such as, for example, negotiation, contracts, hours, be-nefits, ancillary obligations, qualifications, he-alth and safety, social security, labor inspection, labor law, social inclusion and productive and bureaucratic processes, among others.

Were included in the document only those pro-posals related to normative existing reality. So legislative proposals currently proceed through the Congress and, if approved, may adversely affect the levels of competitiveness of the Bra-zilian economy, we were not addressed in this paper.

A decision has also to include only the main pro-blems in the area of Safety and Health at Work, since in that case there would be room for the identification of at least over 101 other propo-sals. However, issues associated with excesses in Regulatory Standard 12 (NR-12) related to the protection of machinery and equipment, the mistakes of the Nexus Technical Epidemiolo-

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gical Pension (NTEP), the lack of appropriate methodology in the framework of Insurance Work Accident and “ban work in the open, “for example, could not fail to be included in the agenda. It is a silent schedule, very little known or EXPORT AND INCENTIVES

discussed, but whose harmful effects can be im-pressive and therefore should be addressed im-mediately.

The study was conducted by a multidisciplinary group of professionals and addressed a large universe of varying degrees of complexity. The-re are different readings for different situations, especially when it enters the field of legal in-terpretations. However, what was sought was to bring more elements to enhance the debate and facilitate progress.

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LINES OF MODERNIZATION

Some central lines guided the construction of proposals for modernization. No doubt, the most emblematic and with the greatest poten-tial to change the system’s base is the “appre-ciation of the negotiating process.” The work starts thus with two concrete proposals in this direction.

A second line relates to the establishment of “clear rules, safe and fair for all concerned.” This line emerge proposals such as modulation overviews effects of the Superior Labor Court (TST), the electronic control, the National So-cial Security Institute (INSS), medical certifi-cates and the creation of a council of resources within the MTE.

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Solutions for increased productivity form a third line with proposals as strategic compensa-tion systems, journey of compensation and fle-xible working for a specified period. The work also includes proposals to “reduce the risk as-sociated with hiring,” transferring to the social security responsibilities relating to it’s mission. Thus proposals relating to maternity, the lack of stability for a fixed period contracts and health plans are treated in absenteeism due to disabili-ty. The “exemption from formal work” is a com-mon feature of many proposals, involving, for example, payroll reduction, the termination of the additional 10% penalty on the Service Time Guarantee Fund (FGTS) and not incidence of social security contributions on line with resti-tutions. Other funds would be the “reduction of bureaucracy and irrationalities,” which has the “electronic point” for example. Many proposals were designed to “away obstacles to benefits to workers.” These proposals involve aspects rela-ted to restrictions that hinder access to supple-mentary pension, the possibility of negotiating

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a reduction in intra-day range and extent of Ali-mentarius tion Worker Program (PAT) to com-panies that do not work with real profit.

There are even proposals to stimulate the adop-tion of “pro-employment policies”, especially given specific population groups.

Examples vocational rehabilitation, incentives for hiring former prisoners and the partial main-tenance of the Continuous Cash Benefit (BPC) in employment of people with disabilities.

Finally, many proposals are associated with is-sues related to mainly to the impossibility and / or total unreasonableness with respect to how they are currently treated, such as NR12, cha-racterization of slave labor, ultratividade and prohibition of work in the open.

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EXPORT AND INCENTIVES

Brazil is the eighth largest economy in terms of GDP and to export a paid on average container US $ 2.215,00.Na Latin America the price is US $ 1,283. Compared to OECD member cou-ntries pays US$ 1.070,00, or less than half the cost and Brazil to ship cargo in the port, will require about seventy days.

The government recently reissued some stimu-lus to the domestic industry, aimed mainly for export, which follow:

The Reintegra regime, which lasted between 2012 and 2013, becomes permanent, but mo-bile rates ranging between 0.1 and 3 per cent, to be set each year. For 2014, the rate that takes effect immediately is 3 percent;

Fixing, at 25 percent, the margin of preference for the domestic industry in government pro-

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curement of manufactured goods and domestic services. This means that, in bidding of the fe-deral government, domestic products can cost up to a quarter more than the foreign compe-titors. The measure applies by 2020, this is a controversial measure, because it stimulates the lack of transparency in government procure-ment and the higher cost will be paid by the Brazilian society.

Government reduced the percentage that the companies will have to give input for joining the tax debts of REFIS refinancing program. For companies with debts up to $ 1 million, for example, the input percentage was reduced to 5 percent, compared to 10 percent. Debit tax of 1 million to 10 million reais will have to pay 10 percent input. For debts between 10 million and 20 million, the entry becomes 15 percent. Finally, up to 20 million actual speeds, the input must be 20 percent. Debts can be paid in up to 180 months;

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Extension of the Investment Support Program (PSI) BNDES until December 31, 2015. The program, which credit line offer for investment with subsidized interest rates, would end in De-cember this year;

rate of zero maintenance of the Tax on Indus-trialized Products (IPI) for construction mate-rials and capital goods;

Ad PSI-Leasing for the modernization of the in-dustrial park, with conditions similar to other lines of PSI;

The most obvious purpose of public instru-ments for the promotion of exports is of course, increase exports of goods and services. However, the motivation and rationale for creating such instruments by Brazilian state should have been based on the most fundamental aspects linked to their own national development process and

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key financial and tax public instruments of ex-port promotion.

Financial Nature of the instruments: BNDES Exim, Proex Financing Proex equalization and PROGER Export.

The instruments of tax, are as follows: Customs Special Regime Drawback and Customs Special Regime Drawback Green-Yellow, Special Ta-xation Regime for the Export Platform for In-formation Technology Services (REPES), Spe-cial Capital Goods Acquisition for Exporting companies (RECAP), Export Processing zones (EPZ), Customs Special Crude Oil Import regi-me and its derivatives (Repex), Special Customs regime of Industrial Warehouse under reinsta-tement basis of tax values for exporting compa-nies reintegrates.

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BNDES- EXIM

The EXIM is a product of BNDES, operated through financial agents whose goal is the ex-pansion of Brazilian exports, by creating credit facility at competitive terms with similar lines offered in the international market. This instru-ment provides financial resources to stimulate the domestic production of goods and services to be exported, linked to different types of ship-ments. BNDES support for export of domestic goods and services can be applied both in the pre-shipment stage and post-shipment stage.

TERMS EXIM PRE-DEPARTURE

In this mode, finances the production of goods, especially long-cycle, to be exported in specific shipments, aimed to export companies of any

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size, incorporated under Brazilian law with head quarters in the country. The payment periods up to 36 months and can not last shipment exceed the period of 12 months and the settlement of the transaction, six months.

The agile preshipment modality finances the national production of goods to be exported, together with the export commitment for a pe-riod of 6 (six) to 36 (thirty six) months is aimed at companies of all sectors and sizes.

SPECIAL PRE-BOARDING

Finances the national production of exported goods, not linked to specific shipments, but with predetermined period for its effectiveness, is aimed at companies of all sectors and sizes.

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Provides resources to finance the sale of goods produced in Brazil for micro, small and medium enterprises through exporting company (anchor company), is intended for large companies from all sectors (Anchor).

PRE-BOARDING CARS

Provides funds to finance the pre-shipment sta-ge, the production for export of passenger cars, intended for micro, small, medium and large companies in the automotive sector.

POST-SHIPMENT

The Post-shipment line offers two types of lo-ans: refinancing the exporter (supplier credit) and credit to the importer (buyer credit). The

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first case is the refinancing of loans to exporters - promissory notes, bills of exchange or letters of credit - acquired by importer. The second mode of funding is established directly between the importer and the BNDES. The Buyer Cre-dit has higher costs than Supplier Credit. The assets financed by these arrangements must sub-mit nationalization index, in value, equal to or greater than 60%, according to BNDES criteria.

FUNDING PROGRAM TO EXPORTS - PROEX

PROEX was created by the federal government in order to provide the Brazilian export finan-cing conditions equivalent to those of the in-ternational market. The program supports the export of goods and services, for example, en-gineering services, and installation services, as-

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sembly and operation abroad, machinery and domestically manufactured equipment.

The program operates through financing arran-gements and interest rates. Some rate equaliza-tion of any arrangements the exporter receives, will be in cash and corresponding the total value of the exports, unlike the BNDES Exim, PROEX is only available in the post-shipment stage. It is administered by the bank of Brazil, the financial agent of the union, and the request for funding is made by completing the Credit transaction record in integrated Foreign Trade (SISCOMEX). The exporter may also ask for a letter of accreditation to the Bank of Brazil, to demonstrate to the importer that offers finan-cing, particularly in the case of participation in international competition the terms of payment financing or equalization of interest rates ran-ging from two months to ten years.

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PROEX EQUALIZATION

Consists in the payment by the national trea-sure, the biggest difference between the charges agreed with the funder and similar operating costs in the international market. The payments are made through government bonds. The Bank of Brazil S.A., makes equalization payments to the funding banks, upon receipt of said title. Fi-nancing obtained from any financial institution for post-shipment stage of Brazilian exports has its application for equalization analyzed by Bra-zil SA bank, the national treasury agent for the program.

PROGER EXPORT

It is a financing line for exports in Reais to fi-nance the national production of goods and ac-

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tivities directly involved with the promotion of exports. It covers, including costs of travel pa-ckages for participation in trade fairs and events in the country and abroad, purchase of air ti-ckets, accommodation, transfers, luggage trans-port, floor space rental, mounting and stand ambiance, promotional material production, among others. May be beneficiaries PROGER Export micro and small companies with annual gross revenues of up to US$ 5 million. The loan limit per transaction is US$ 250,000 and the term of the operation up to 12 months for pay-ment. The amortization of the installments are monthly and consecutive, with the advantage of having up to six months of grace period for pay-ment of the first installment.

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INSTRUMENTS OF TAX EXPORT PROMOTION

SPECIAL CUSTOMS DRAWBACK REGIME

The special customs regime drawback is the tax exemption on imports linked to an export commitment. The mechanism works as an in-centive to exports because it reduces exportable products production costs, making them more competitive in the international market.

The drawback system may be granted to the operation which is characterized as transforma-tion, processing, assembly, renewal or recondi-tioning, packaging or repackaging.

There are three types of drawback: exemption, suspension and tax refund. The first mode is the exemption of taxes on imported goods, in quan-tity and quality equivalent, for the replacement of other previously imported with payment of taxes, and used in the manufacturing of the pro-

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duct exported. Second, the suspension of taxes on the import of goods to be used in product industrialization, which must be exported. The third deals with the refund of taxes paid on im-ported inputs of importaão used in the exported product. The difference between the modes is that in case of suspension, the company is al-ready planning what to export and import the necessary goods with suspension of taxes. Once fulfilled the commitment, chargeability beco-mes free. In the case of the exemption method, the company initially imported goods without having intended to benefit it and export it. Af-ter proof of export, the company may require the imported free of taxes for restocking. The mode of recovery is similar to the exemption method, but if the company has no interest in importing the material to spare, and it is the refund on taxes paid originally.

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DRAWBACK GREEN & YELLOW

The green-yellow drawback allows input acqui-red domestically and used in the production of exportable goods even enjoy the tax treatment already accorded to imported inputs, benefited from the drawback of the system and includes all sectors and sizes of companies.

DRAWBACK INTEGRATED

There are two methods of integrated drawback force: suspension and exemption described be-low.

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DRAWBACK INTEGRATED SUSPENSION

This is a special customs regime of export su-pport. The drawback integrated suspension pro-vides the suspension of taxes, both imports and acquisitions in the domestic market, on inputs used in the product industrialization to export. To enjoy this benefit, the interested company takes with the government an export commit-ment. The inputs can be imported or acqui-red in the domestic market, in support of the regime, in combination or not. However they should be subjected to at least one of the listed below industrialization processes:

• transformation from raw material or interme-diate product, generating a new well;

• processing: modifies or enhances the opera-tion, use, finish or appearance of the product;

• Assembly: product, parts or parts that results in a new product or autonomous units;

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• renovation or refurbishment: product used or remaining part of damaged or unusable pro-duct renewal or restoration of the product for use;

• packaging or repackaging: change the presen-tation of the product by placing packaging, unless the packaging is intended exclusively for the carriage.

DRAWBACK INTEGRATED EXEMPTION

The integrated exemption drawback regime allows the replacement of inventories of both imported inputs, as those acquired domesti-cally and used in the manufacturing of the final product already exported. The tax exemption is granted for the purchase of inputs in the quan-tity and quality equivalent to those used in the export product. The beneficiary of the scheme

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may opt for importation or acquisition in the domestic market, combined or no way.

It also applies to purchases on the domestic market or the importation of goods equivalent to that used in repair, creation, cultivation or extractive activity product already exported, characterizing the restocking.

SPECIAL SCHEME OF TAXATION FOR THE PLATFORM OF EXPORT OF INFORMATION TECHNOLOGY

SERVICES

It beneficiary of this regime the legal entity that predominantly carries out software develop-ment activities or the provision of information technology services, and to assume the export commitment equal to or greater than 60% (six-ty percent) of its annual gross revenues the sale of goods and services. The law suspends the re-

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quirement of PIS / PASEP AND COFINS le-vied on the gross sale revenue in the domestic market, where those goods are acquired by the beneficiary entity for incorporation into its fi-xed assets and also when such goods are impor-ted directly by beneficiary legal person hurt if incorporation into its fixed assets.

80% of its annual gross revenues from sales of goods and services, and that takes commitment to maintain this percentage of export during the period of 2 years.

70% of its total gross revenues from sales of goods and services and that take commitment to maintain this percentage of export during the period of 2 years.

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EXPORT PROCESSING ZONES OR SPA

The Export Processing Zones (EPZ) are charac-terized as free trade areas with the exterior, de-signed for the installation of companies focused on the production of goods for export and are considered primary zones for customs control purposes.

Among the main objectives of the SPAs we highlight are: the attraction of foreign invest-ments, reduction of regional imbalances, stren-gthen the balance of payments, technological diffusion promotion, job creation, promoting economic and social development and increa-sing the competitiveness of Brazilian exports.

Being mounted an SPA in Pecém port area in São Gonçalo do Amarante (EC). Any industry that export at least 80% of what it produces can be installed on site and enjoy benefits such as

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reducing the IR (Income Tax). The presence in the SPA also provides privileged access to the harbor, which reduces cost and time. And thus dribbles part of logistical problems and Brazi-lian infrastructure.

EXPORTATION SPECIAL REGIME

RECAP and establish tax privileges for expor-ting companies, and the qualified company en-joys suspension of the requirement of PIS / PA-SEP AND COFINS on imports or acquisitions in the domestic market, machines, appliances, instruments and equipment, or to be incorpora-ted in fixed assets.

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SPECIAL REGIME CUSTOMS IMPORT OF CRUDE OIL AND

DERIVATIVES - REPEX

The Repex allows the importation of those pro-ducts, with suspension of payment of taxes, for later export in the same state in which they were imported. The system will only be granted to the company previously qualified by the Inter-nal Revenue Service, and who has authorization from the National Petroleum Agency to carry out activities of import, export and refining of the products.

REINTEGRA - SPECIAL SCHEME OF TAX RETURN

The Special Customs Regime of Industrial Wa-rehouse under control (REINTEGRA), with the objective of the scheme is to relieve exports

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of manufactured goods from taxes paid throu-ghout the production chain, not discharged by current systematic, as ISS, IOF And CIDE, among others. The benefit is linear and is in accordance with the rules of the World Trade organization. Thus, the REINTEGRA returns to exporters of manufactured goods 0.5% of ex-port revenues, in the same way the refund of tax apllied. This percentage may be increased to up to 4%, by presidential decision only.

INDUSTRIAL WAREHOUSE UNDER CONTROL CUSTOMS

COMPUTERIZED - RECOF

The industrial warehousing under computerized customs control (RECOF) is what allows the company to import, with or without exchange coverage, and with suspension of payment of ta-xes under computerized customs control, goods which, after undergoing industrialization opera-

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tion, which are intended for export. The regime of the application period will be 01 year, coun-ted from the date of clearance for admission to RECOF program.

IDENTIFICATION OF POTENTIAL IMPORTS BRAZILIAN

This is a task not always easy, especially in a country where the volume of imports is very ex-pressive and has more than 40,000 direct im-porters, as well as a number of companies that matter indirectly.

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GOVERNMENT PROCUREMENT IN IMPORT PROCESSES

Government procurement in Brazil are gover-ned by the aforementioned Law on Procure-ment, which establishes the need for bidding processes for these purchases of both goods as services, including those from abroad.

Ministries, joint ventures, local authorities and other state agencies are required to conduct im-ports by publishing an edict calling participants interested to participate in a bid to outlet prices. The criterion of choice depends on the announ-cement of the content, usually prevailing crite-rion of the lowest price, provided the technical requirements of the product and supply condi-tions.

IMPORTANT: In case of a tie between the pro-posals presented by a national firm and one fo-

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reign, the law ensures preferably the product of a national company.

Usually requires a bank guarantee to be provi-ded along with the proposal, in order to cover the costs of a new bid if the winning company desists from signing the supply contract or exe-cution.

TRADE PROMOTION EXHIBITION IN BRAZIL

In Brazil, are held fairs and exhibitions of va-rious products and sectors during the entire year, especially in larger cities. In these, the fo-reign exporter can participate as an exhibitor or as a visitor.

The Ministry of Foreign Affairs offers a consul-tation system in which it is possible to identify

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the fairs that take place in the country according to various attributes: economic sector activity, State where it is held, promoting institution of the fair, scope (international, national, regional, state or municipal), name of the fair and the period in which it is held.

COMMERCIAL MISSION TO BRAZIL

The Brazilian Embassies and Consulates, as well as the Chambers of Commerce and the Mi-nistry of Foreign Affairs (MRE), with support from other agencies and ministries are availab-le to government and private entities in various countries wishing to organize a trade mission to Brazil.

Typically the organization’s mission is to coordi-nate between similar organizations in Brazil and the country of origin - for example, Chambers

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of Commerce and Industry Associations - with the support of the Brazilian Embassy and the diplomatic representation of the country in Bra-zil.

ENTRY VISA

The Brazil without a visa citizens of South Ame-rican countries (except Venezuela) that may work or pleasure for a period of 90 days, being allowed access by filing civil identity card issued by the country of origin. For the other coun-tries, there is need for a passport, but for many there is also the visa-free for a specified period.

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VACCINATION

The Brazilian government requires international certificate of vaccination against yellow fever for travelers from countries that have territory in the Amazon region.

INVITATION LETTER

The granting of visas for business in Brazil ge-nerally requires the submission of a letter from a Brazilian company addressed to the consular service, notarized, clearly explaining the purpo-se of the trip.

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COMMERCIAL PRACTICES GENERAL CHARACTERISTICS OF

THE NEGOTIATION PROCESS

Brazilian importers usually do a detailed resear-ch on existing global suppliers, therefore the ex-porter must be clear about the competitive ad-vantages of his product, and present them quite clearly.

After intense exchange of technical and com-mercial information on the operation, the im-porter ask you to send the so-called Pro Forma.Esta Invoice does not mean the closure of a re-quest, but the importer will need it to comply with the internal procedures of closing of the transaction.

Three points are essential for the preliminary negotiations between the parties: the unit pri-ce, delivery time and payment methods. The definition of the unit price, you need to define

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the condition of sale, represented by the letters of Incoterms currently in force in international trade. Cargo delivery time in Brazil will depend not only on the means of transport, but also the time given to the nationalization process in the Brazilian customs. The payment should be set in accordance with the existing arrangements.

LITIGATION AND ARBITRATION

In case of disputes and controversies between the parties depending on the form of payment, the issue can be resolved in the light of the laws of the International Chamber of Commerce - ICC or, if they do not reach an agreement, the courts in the jurisdiction of the chosen forum the contract, which may be the country of the supplier or the buyer.

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DISTRIBUTION CHANNELS

The exporter may choose four ways to get your products in Brazil, according to their commer-cial conveniences and also to the consumer market needs.

DIRECT EXPORT

In this mode, the exporter negotiates directly with the importer in Brazil, either an individual or a company. Often more costly for exporters in terms of time and financial expenses. It also requires thorough market research resources to identify potential buyers, and also a constant ef-fort in terms of telephone calls or e-mail. Also often requires travel to Brazil to deal directly with buyers.

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On the other hand, the Brazilian importer like the direct approach of the supplier, it creates bonds of trust and allows fast and direct deci-sions. It also facilitates the clarification of pro-duct technical questions. Other favorable point is the ability to negotiate better financial con-ditions for business, because there is no cost of intermediation.

INDIRECT EXPORT

The exporter does not do business with the company that will use your product but with a commercial intermediary. In Brazil these inter-mediary companies are divided into two forms of organization: trading companies importing and trading companies.

For the smaller exporter, introduce their pro-ducts through these companies is a good busi-

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ness strategy, because they know the market and maintain close ties with potential buyers, facili-tating trade promotion activities of the product in the markets where they operate. Reduces marketing and transaction costs, as the business are responsible for all trade and customs process for goods entering the country.

The trading companies are more focused on lar-ge applications for import, it is necessary that the exporter is able to deliver large volumes of their product, often for immediate or scheduled departure. Are also companies that usually have scope throughout the national territory. The Brazilian law requires that the trading compa-nies obtain special register and are made in the form of a corporation and that have minimum capital set by the National Monetary Council.

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Already importing commercial companies exist in large numbers in the market, as are organiza-tions whose constitution is simplified. They are more likely companies operating small volumes in the import and usually have only regional re-ach.

IMPORTANT: If the turnover become conside-rable, it may be appropriate to sign an exclusive contract in the trading or commercial company becomes the sole supplier of the foreign supplier products in Brasil. In this case, it is recommen-ded to exporter accomplish it always taking into account the commercial and financial standing.

COMMERCIAL AGENTS

The exporter can opt for self-employed pro-fessionals or service companies that operate as commercial intermediary in Brazil, being paid

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based on commissions on sales volume. These professionals do not realize the import, but are dedicated to the pursuit of Brazilian clients who are willing to buy the exporter of the products.

The payment of commissions, usually calcula-ted on the FOB value of the transaction, you can combine three modalities practiced in Bra-zil:

- Graphic Account: the amount of commission to be paid to the commercial agent is retained in the Brazilian bank that, after paying the expor-ter is responsible for passing on the commission to the agent.

The Forward: The Brazilian bank pays the ex-porter the amount of the invoice and the fee is passed on to the representative directly by ex-porter. In theis case, there must be financial re-lationship of trust between the parties.

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Deduct Invoice: in this case the importer retains the value of commission and is responsible for transferring it to the dealer, which also requires commercial confidence between the parties.

IMPORTANT: Indicates that the exporter makes the correct candidate selection and the representative that restricts its activities to the local market where it operates, whether by re-gion, state or city, taking into account the large size of the Brazilian market.

OPENING AN OFFICE IN BRAZIL

When exporter’s business in the Brazilian market is showing very promising, there is the option of mounting a structure in the Brazilian market by opening an office to establish direct and perma-nent contact with potential importers.

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This office can be also responsible for the inpor-ting operation. In this case, it should set him as a trading company.

There are administrative, exchange or customs impediments to open a foreign company branch in Brazil.

There are no impediments to the entry of fo-reign currency for office maintenance, or ou-tputs resulting from remittances of profits and dividends, according to the existing procedures for each case.

TAX TREATMENT OF IMPORTS

The tax regime applicable to Brazilian imports includes not only the import tax, but several other taxes levied on goods in general in the

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domestic market to provide equal treatment to goods produced in the country.

Although the calculation of some of the taxes levied on imported goods cannot be trivial, its calculation is done automatically by Siscomex own, simply, in most cases, inform the classifi-cation of the goods and their customs value.

IMPORTANT: to ensure the non-cumulative payment of taxes, Brazilian law allows the tax amount paid on importation generate a credit in favor of the importer.

IMPORT TAX - PROTECTION

Federal tax, whose purpose is purely economic (regulatory) and market protection. It focuses exclusively on products brought from abroad.

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The Import Tax is selective as it varies according to the country of origin of goods (due to trade agreements and product features.

COMMERCIAL CUSTOMS

The Brazilian importer will enjoy receiving all technical and commercial information of the product and the price, including customs classi-fication, because with these data will be able to fabricate an import spreadsheet that includes ta-xes, fees, storage, port expenses, reaching more quickly to the final conclusion on the purchase. Thus, the exporter must have available all in-formation about the product. In this way, the exporter must have available all information about the product.

As far as possible, do not leave any question unanswered, as this may delay the decision of

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the client. A lack of data or information can le-ave the unsecured client to close the deal.

The boarding time in the country of origin is another essential information, because, depen-ding on the means of transport, travel time is an important factor in planning the customer is doing to market the product in the domestic market.

One should be extremely careful with the quan-tities supplied. When it is a product of human consumption, for example, applications may be bulky, given the size of the Brazilian consumer market. Thus, the exporter must have full confi-dence that is able to provide the amount traded by the deadline.

One should not pressure the client hoping to get a prompt decision, as they are normally held parallel consultations on possible customs rules that may delay the decision-making process.

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What can happen in the meeting is the custo-mer require sending the Invoice Pro Forma.Sen-do so it is appropriate that the light exporter letterhead of the company.

Some importers usually discuss the important points of agreement at the meeting and, sub-sequently, by fax or email, formalized the final text.

Once formalized the proposal, the price should not be changed, as well as the form of payment. For purchases considered small or medium, is usually not sign commercial contracts, as the Pro Forma Invoice serves as such.

The trading involves goods and values that the exporter’s discretion, deserve greater formality, one can propose the signing of a contract, in-cluding all procedures to be respected by both parties. This contract can be registered in a re-gistry office and to resolve any disputes are cho-

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sen by mutual agreement and may be Brazil or the country of the exporter. The contract must be written in both languages.

THE 22 THINGS NOT TO DO THE IMPORTER

There are some behaviors that should be avoi-ded at the risk of compromising the vision that the customer has the business and cripple the business closure:

• Do not give immediate response to customer emails.

• Promising export amount greater than the pro-duction capacity.

• Changing the price after the formalization of the Pro Forma Invoice.

• Do not send the promised samples.

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• unilaterally change the forms of payment com-bined.

• Imposing an Incoterm that the customer is not accepted.

• Boarding merchandise with different quality promised.

• Take the delivery of the necessary documents.

• Do not give satisfaction when the documents are discrepant.

• Do not ask the customer to visit your country and your company.

• Speaking ill of your country or Brazil.

• Do not meet any changes in the product requi-red by the client.

• Do not collaborate on insurance compensation cases.

• Suggesting that is at risk of default if the pay-ment is not made by letter of credit.

• insists on advanced payment, claiming distrust.

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• To say that will make credit insurance, im-plying mistrust.

• Criticizing the Brazilian customs formalities.

• Say you do not like the Portuguese language.

• To say that the Brazilian cities are chaotic.

• Criticizing the Brazilian gastronomy.

• Demonstrate exaggerated fears about urban violence in Brazil.

• Praise exaggerated his country, making compa-risons with Brazil.

Brazil began the year having to solve the past, improve the present and understand it’s future.

The country has come at a time of great disruption, an irreversible moment of change, of new market and business paradigms, one one of its most decisive moments in its modern history.

The country will certainly emerge stronger and structured from this crisis, we must move forward conclusively with the modernization agenda. To return to our growth path, we can not pretend that we have no swamp in front of us. Cross through this swamp has become a mandatory road in order to return to the path of growth and development of our country.

How to do business with Brazil, how to compete internally and succeed in the new economy is a major task. Understand how this affected your plans for Brazil is crucial.

Yes, the country is in incre-asing movement, when this happens, it's like a open window, at this particular mo-ment the window is open for major structural reforms and the implementation of a new positive agenda, more com-prehensive and bolder coun-try is about to emerge. Ignore this moment means that Bra-zil is not understanding the real opportunity to progress to the next decades.

Doing business with Brazil remains a challenge, we have a revolution going on in terms of technology, government, relations between countries, companies and labor.

In the history of the countries there are defining moments, this is ours.

André Lima is a senior consultant of companies and businesses, with more than 20 years of experience in financial markets and mergers and acquisi-tions operations and processes. Has over the years advising dozens of Brazilian companies management in crisis processes, recreating the bu-siness architecture, and building new competitive advantages and innova-tions. The longer the years assisted many international clientes, as well as guided international investors to settle their business in Brazil.

The author has written this book to guide international investors about the main characteristics of the market behavior, to clarify the main business rules, to inform about the main hu-man characteristics, it’s taxes complex regulations and the challenges in ter-ms os logistics and distribuition across the country and mainly, give an insight about various opportunities and busi-ness trends that can become very pro-fitable in Brazil.

ANDRÉ LIMA3nd Edition

English Version

A LAND OF OPPORTUNITIES UNDER CONSTRUCTION

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HOW TO DO BUSINESS WITH BRAZIL

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