With 210 million inhabitants and a land mass the same size as Europe, Brazil is the seventh largest country in the world. The country’s economy has literally grown out of the world’s largest fertile land and rich natural resources such as oil, gas and minerals. The European Union–Mercosur Free Trade Agreement, which was confirmed in June 2019, will boost new opportunities further.
Change – Brazil's new direction
A keyword for Brazil’s current and future trade development is change. After a few turbulent years of impeachment and trials against the country’s leaders, the country has taken on a completely new direction. The traditionally protectionist system with high import duties is changing fundamentally to become more welcoming to foreign influence and trade. The EU-Mercosur agreement will play a major role in this development as trade barriers disappear and open up new possibilities for Swedish companies.
Opportunities for Swedish companies
Brazil’s well-established industry sectors include automotive, mining, agriculture, food, paper and pulp. Sweden already has a significant presence in Brazil, with more than 250 Swedish companies established through Brazilian subsidiaries or local distributors and partners. The health sector is particularly interesting for Swedish companies thanks to increased investments in medical equipment, both in the public and the private healthcare systems.
Challenges for Swedish companies include corruption avoidance, navigation of the tax system and compliance with an intricate regulatory framework. To minimise the risk, it is important to team up with local and reliable professionals. Trade & Invest commissioner Andreas Rentner explains more about possible obstacles on the Brazilian market below.
How we can help
Brazil is the largest market in South America and a hub for many companies’ regional head offices, and Business Sweden's office in São Paulo is also our largest in South America. We can help you to get your business off the ground by finding suitable partners and providing useful advice, including how to stay away from fraudulent behaviour.
Andreas RentnerTrade & Invest Commissioner Brazil
What are the main advantages for expansion in Brazil?
Brazil is a huge market that can also be used as a first step to reach the rest of South America. Business is centralised to the big cities and São Paulo alone has the same number of inhabitants as Sweden. Historically, presence in the country has been required to succeed, which has led to Brazil mainly attracting large companies with long-term investment perspectives. However, SMEs can enter the market through local partnerships or direct sales. The relationship between Brazil and Sweden has always been good, and the Brazilians are positive to Swedish companies and the values they represent such as respect, quality, innovation and sustainability.
What are the risks and challenges companies may face in Brazil?
Brazil has been a protectionist market with high customs, a complicated tax system and extensive corporate administration. With the new trade agreement between the EU and Mercosur, the conditions for imports will hopefully change significantly and open more possibilities for doing business with Brazil. Swedish companies also need to be aware of corruption and we always advise companies to avoid grey zones and uncertain situations. We suggest getting help from local experts who know how to deal with different situations. Brazil is a bureaucratically governed country and English skills are low. This might imply complicated and delayed processes and higher costs than expected. However, with the right partners, you can reduce and prevent many of the challenges you face in trade and business with Brazil.
Are there any cultural aspects to consider?
In Brazil it is important to meet the people you do business with. The relationship is at the centre of business and it is important that you invest in this to achieve good results. This also applies to showing respect and clearly showing that you want to cooperate.