How to start a business in Brazil
How to start a business in Brazil as foreign investor
Brazil, the largest economy in Latin America enriched with young population [ 85% under 55 and 40% under the age of 25 ] and abundant and diversified energy resources, a pre-condition for investment opportunities. The country enriched with huge mining like iron, ore, oil and agricultural resources like meat, beef, coffee beans etc. Brazil is self-sufficient in Oil. A founder of BRICS it has The Brazilian energetic matrix is abundant and diversified. It has diverse clean energy sources, like water, wind and ethanol. Importantly, about 85% of Brazil’s energy needs come from renewable sources. Characterized by these, business opportunities are huge and wide. May people ask how to start a business in Brazil as foreign investor?
It’s better to have a local representative if you are not a Brazilianto fight your way through language barrier and the Red tapes. Hiring a good lawyer and an accountant would be the best to represent you in the process, which would require minimum 3 months and maximum 6 months. Around BRL 6000 to 7000 [$R] and BRL 4000 to 5000 will be required monthly respectively to hire a lawyer and an accountant.
The exchange rate of BRL to US$ is around 1US dollar = BRL3.483.
You will need to create and file at Contrato Social at the Federal level and receive your CNPJ number. From there your accountant will file your proposal at the state and local level that would kick off a 5 steps processing venture and find solution of how to start a business in Brazil, as follows :
JUCESP [Junta Commercial Do Estado De Sao Paulo].
Employment condition of Brazil
Employees are required to be hired through an Employment Agreement and within 48 hours of appointment this has to be registered. Employees are can be on a trial period starting from 90 days to 2 years maximum. Employees are required to work 8 hours per day from Monday to Friday and a maximum of 44 hours in a week. In addition they would work 4 hours on Saturdays .Working hours can be stretched to maximum 2 hours daily with a surcharge of 50% of the regular hourly rates. As smart investors need to know how to start a business in Brazil before start of investment.
Benefits of starting business in Brazil
Businesses that populate high percentage of women should provide foods and Day care assistance. Standard benefits include Health care & life insurance Transportation etc. Companies with more than 30 employees must at the least have a proper place where employees can have their meals. A four months long maternity leave is prescribed in addition to a 60 days paid leave to mothers adjusted with the Corporate income tax IRPJ. At the of birth of child male staffs are too allowed on leave for five days with pay. A thirteenth salary corresponding to one full month salary also to be paid as Christmas Bonus in parts, half in November and half in December.
Employees are entitled to enjoy a paid vacation leave of 30 days after each 12 months of work.
In Brazil your employee costs the double of their salary owing to various charges involved in the hiring process. Employers are charged every month a total of 68.18% on each of their employees’ payroll, in addition to benefits described above. Say, one employee gets BRL 1000 per month, would actually costs the employer BRL 1,681.80.
Income Tax Rate in Brazil
In Brazil corporate tax rate stands at 34 percent, which is a combination of 15% basic rate, 10% surtax on income exceeding BRL 240,000 yearly and 9% social contribution on pre-tax profits.
Well, you need to be a patient and ready to sweat in opening a business in Brazil looking at the huge business prospects as I said herein above. The laws here are more or less chaotic in nature and user friendly. There are some problems as foreign investors to start a business in desirable sectors (competitors, market, price, man power cost and so on). Without knowing income tax rate for corporate and employees should not proceed of investment in Brazil. I hope this information will help you deciding how to start a business in Brazil as foreign investor.