BRAZIL, Experience and facts when establishing business

Making strategies work- it`s all about peopleMarcela Mieres Eneroth & Mats Wärnling

BRAZIL FEATUREFederative Republic of Brazil

Capital: Brasília

Population: 190 millions

Currency: Real - R$

Idiom: Portuguese

President: Dilma Rousseff

Minimum wage: 2266 €

Unemployment rate: 5,7%

Biggest country of South America

5th biggest country of the world

7th biggest economy of the world

Source: IBGE 2010

BRAZIL – Market PlaceProfile

Ethnic Composition 2010

47,73%43,13%

7,61%

1,09% 0,43%

Workforce by Occupation

66%

28,5%

5,5%

BRAZIL - Market place3 Different Angles

Brazil Agenda:

FIFA World Cup 2014, MU Brazil official recruiter

Rio de Janeiro, Olympic Games 2016

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São Paulo Paris London Xangai Mumbai

20082025

Population with a salary level > 2250R$/month

(source PwC)

Around 6 to 8 millions of Brazilians become new consumers each year…

BRAZIL SCENARIOGrowing Industries in Brazil

* Source: Survey with more than 1,500 executives in Brazil, which 83% have salaries between $ 120k to $ 300k per year and 17% over $ 450k per year

Education

Logistics

Energy / Green Technology / Green Jobs

Health/ Pharmaceuticals

Construction

Hotel Business

Infrastructure

IT Telecomunications

Utilities: Ports, Airports; Energy (including refinery)

Oil & Gas

Culture, Language and Religion

• Primary attribute: Brazil is proud to be different.• Brazilian culture is an ethnic and cultural mixing of Indians, Portuguese and

Africans.• Italian, German, Spanish and Japanese immigrants settled Brazil and created

a multicultural and multi-ethnic society.• Brazil was a colony of Portugal for over 3 centuries. • Brazil holds Amerindian influences in its culture, food and language.• Brazil has the largest Catholic population in the world.

BRAZIL SCENARIO

Living and working in Brazil

Cost of Living– Sao Paulo (10th) ranked as the most expensive city in the world, Health / Doctors– Private healthcare is of a good standard, but very expensive.

Banking– Technologically sophisticated banking sector.

Source: Mercer 2011 - survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

BRAZIL SCENARIO

Facts

Salaries– Due to the growth, the salaries in general are overestimated compared with

other countries. – Average Manager: 5.250 to 6.500 € per month– Average Director: 8.700 to 13.000 € per month– 13 salaries per year

Benefits

– Standard: health insurance, life insurance and food and transport contributions.

– 30 days vacation (with additional 1/3 salary)

BRAZIL SCENARIO

Establishing Business

BRAZIL SCENARIO

Challenges for companies establishing business in Brazil:

• Bureaucracy: to legalize a business in Brazil. It is necessary to have a legal representative. It may take 6 to 8 month to get a working visa for a foreign person;• Labor Law: Employment laws in Brazil are extremely complex and it is necessary to have legal adviser to support the company;• Expatriates: The legal resident documents and banking relations are also very complicated and demand a high level of patience to complete the process;• Fiscal tax issues: a service company who has to pay fees to foreign headquarter has to pay 44% tax over every invoice paid abroad (until the company gets profits).

Establishing Business

BRAZIL SCENARIO

Establishing Business

BRAZIL SCENARIO

Business Advice

• Family is #1– Brazil is a collectivist society which places family at the center of its social structure. – Families tend to be large and close-knit, providing members security and connections.

• Relationship– Similar to the importance placed on family, Brazilians depend heavily on relationships

with others. Brazilians do business with people, not companies or organizations. Therefore, it is vital to take time getting to know your counterparts and letting them get to know you. Sometimes is difficult to separate personal and professional issues.

– Topics for conversation: soccer, children, family. AVOID politics, religion, the rainforest and if Brazil will be ready for the World Cup or the Olympic Games.

– Personal contacts in Brazil are essential to business.

BRAZIL SCENARIO

Business Advice

• Time– Brazilians approach time in a very relaxed and flexible manner;– Punctuality and precise plans are not so common;

• Negotiation Process– Expect questions about your company since Brazilians are more comfortable doing

business with people and companies they know. – Wait for your Brazilian colleagues to raise the business subject. Never rush the

relationship- building time. – Brazilians take time when negotiating. Do not rush them or appear impatient. – Often the people you negotiate with will not have decision-making authority. Decision

is made by top executives.

BRAZIL SCENARIO

The Latam Solution

MERCURI URVAL BRAZIL

OUR CONSULTING TEAMMU Brazil has a good mix of senior consultants from Latam and Europe, and has capability to deliver the full range of business solutions.

OUR EXPERIENCEMU Brazil is well established in São Paulo and has done projects in all important markets in Latam.

AREAS OF EXPERTISESearch & Selection, Talent Management, Business Coaching, Capability building Management, Leadership Improvement.