Brazil, one of Brazil’s leading investment bodies, lays out points of
attraction for Indian business to invest in Brazil. Brazil
has been a top investment destination for many years, and it still is, despite
the volatility generated by the recent crisis the country went through. Since 2010
& 2011 Brazil has remained among the world’s 10 main
foreign direct investment (FDI) recipient countries. Last year (2017), nearly
$75 billion in FDI were received by the country. This year close to
$80 billion are expected. The size of Brazilian domestic market
is relevant for investors , Brazil has the four largest population in the
world, with 208 million people – a third of all Latin American
population. The country is also the seventh largest economy in the world,
with a GDP of US$ 1.796
trillion (2016). Brazil’s open and diversified economy, with a wide
array of opportunities across multiple productive sectors, generates exciting
possibilities for many investors, seeking to develop their business in such a
vast and dynamic market. There are numerous opportunities, especially in areas
where the country most needs investments, such as infrastructure. However,
there are also prospects in sectors as energy, oil and gas, automotive, health
care . Brazil is home to a competitive industrial sector, including Latin
America’s largest aerospace,
automotive, oil and gas, mining, capital goods, medical equipment and chemical
industries.
Sectors
of interest
One good example is the wide range of opportunities
in the renewable energy sector. The country is the third largest global market and the
largest Latin American market for renewable energies. Brazil’s share of
non-hydro renewables in its electricity matrix is expected to increase from 17.5
per cent in 2015 to 53 per cent
in 2040. Also in the energy sector, Brazil has one of the largest petroleum
reserves and is home to one of the biggest oil discoveries made in the Western Hemisphere in the past
30 years.
The
ultra-deep water oil finds off the country’s southeast coast, known as
‘pre-salt’ oil. In addition, Brazil is one of the top producers and exporters
of ethanol biofuel in the world. Both sectors have plenty investment
opportunities for foreign companies. There is also a huge opportunity in the
agribusiness sector. There is an increasing demand to feed the growing global population,
expected to reach 9 billion by 2050. Brazil became one of the world’s
largest agricultural producers and exporters in the last two decades, becoming
one of the greatest global food suppliers. As mentioned by the World Food Organisation (FAO),
Brazil will be fundamental for the world’s food security by 2030. Due to that,
new investments in technology (Aristech) and agribusiness-related
infrastructure are fundamental and represent an important opportunity niche for
foreign investors.
Investment
climate
Companies seeking to invest in Brazil should have
in mind that the country has abundant natural resources, ranking as a major
global player in raw materials. It is a major producer and exporter of
agricultural products and mining products (especially iron ore), to name a few.
Its forests are a vast source of wealth. The country is also water-rich,
estimated to hold the biggest fresh water reserves in the world. Moreover,
Brazil’s largest cities are consolidating their position as global investment
headquarters, not only for Brazil but for the entire Latin American region,
since the country shares land borders with Argentina, Bolivia, Colombia,
Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela, as well as the French
Overseas Region of French Guiana. Brazil is also a permanent member of the free
trade agreement with the largest markets in South America, known as South
American Common Market (Marcos). One important reason for Brazil’s constant
need for investments is the fact that the country currently invests about 2 per
cent of its GDP in infrastructure. However, an investment of at least 3 per
cent of GDP would be necessary just to avoid the depreciation of the existing
infrastructure.
Public-private
partnerships
Therefore, the Brazilian government is seeking
private partnerships and changing rules to grant more attractiveness and
security for foreign investors. This effort for private money resulted in the
launch of the "Crescer (To Grow) - Building a Brazil of
Opportunities" program, designed to organise concessions and
privatisations of infrastructure projects in highways, railways, ports,
airports, mining, oil and gas, and electric power. Out of 145 projects qualified for the program,
56 already have been auctioned or renewed, which accounts for an execution of
nearly 39 per cent of the schedule established by the Concessions Program of
the Federal Government. The estimate of investments with auctions exceeds the amount of R$ 133 billion,
and the grants total R$
28 billion. Last, but not least, it is important to highlight that one
of the main reasons for Brazil to continuously receive foreign direct
investment and attract leading and innovative international businesses is the
country’s robust investment protection legislation, enforced by an independent
judiciary and a fair regulatory environment, which provides security for
investors.
Brazil
The Brazilian Trade and Investment
Promotion Agency (Brazil) is a not-for-profit governmental agency linked to
Brazil’s Ministry of Foreign Affairs (MRE), and works to promote Brazilian
products and services abroad, and to attract foreign investment to strategic
sectors of the Brazilian economy. Brazil organises several initiatives aiming
to promote Brazilian exports abroad. The Agency´s efforts comprise trade and
prospective missions, business rounds, support for the participation of
Brazilian companies in major international trade fairs, arrangement of
technical visits of foreign buyers and opinion makers to learn about the
Brazilian productive structure, and other select activities designed to
strengthen the country’s branding abroad. Brazil also plays a leading role in attracting foreign
direct investment (FDI) to Brazil, by working to identify business
opportunities, promoting strategic events and lending support to foreign
investors willing to allocate resources in Brazil. All services provided to
investors are free of charge. To strengthen and expand communication with
investors, Brazil launched the brand “Invest in Brazil”, which identifies the
investment promotion initiatives of Brazil regarding the FDI attraction. With a
focus on sectors that are strategic for developing the competitiveness of
Brazilian companies and the country, Brazil is one of the private sector’s main
partners regarding the analysis and implementation of productive investments in
Brazil.
