|To: 2MAR$ who wrote (622)||12/12/2011 10:07:48 AM|
|From: elmatador||Respond to of 1492|
|You Must Know THIS Before Investing in Brazil |
Let’s go straight to the point: “THIS” in the post title refers to SEBRAE.
Sebrae is the mecca for reliable information about entrepreneurship in Brazil; from working visas for foreigners to schedules of entrepreneurs gatherings, Sebrae has all the official answers foreigner investors need. It may be slower than a Google search (or a Siri question) but it is definitely more accurate.
Sebrae was founded in 1972 and counts on a network of 4.433 employees and 9.223 external consultants.
Sebrae is The Brazilian Service of Support for Micro and Small Enterprises and serve as a hub for people interested in entrepreneurship in Brazil. It was founded in 1972 and counts on a network of 4.433 employees and 9.223 external consultants.
Brazil’s economy has been booming in the past few years. Quoting a fellow Forbes writer, “Brazil has been adding 19 ‘millionaires’ per day since 2007 — and that statistic will likely be repeated over the next three years as Latin America’s economic super-power continues to deliver stellar GDP growth and consumption rates, according to bankers.” Brazil’s huge consumer market tempts many entrepreneurs, willing to open a company in “the country of the future.”
However, starting a new business in Brazil is anything but easy. Brazil ranks 127 out of 183 countries in the ranking Ease of Doing [url=http://www.forbes.com/business/]Business Index[/url] by the World Bank.
In Brazil, it takes up to 120 days to start a business and around 4 years to close it down mainly due to high levels of bureaucracy. By contrast, in the US, it takes only 6 days. Yes, you read it correctly, it takes 20 times longer in Brazil !
While in China it costs about 155$ to open a company and in Colombia 670$, in Brazil it costs 1125$ !
In Canada and in New Zeland, only one document is asked to open a new business. By comparison, in Brazil there are 15 mandatory legal procedures to be fulfilled !
Nonetheless, the lengthy, costly and mandatory procedures necessary to start a business have not stopped 22.7% of the economically active population of becoming entrepreneurs. Between 2001 and 2009, the number of owners of micro and small enterprises and self-employed rose from 20.2 million to 22.9 million. Of this total, nearly 19 million conduct their own independent business without any employees.
This data comes from the Yearbook of Labour Small and Medium Enterprises in 2010, a study conducted by Sebrae in partnership with the Department of Statistics and Socioeconomic Studies (Dieese). The survey also shows that Sao Paulo, South America’s largest city, is home to the largest volume of micro and small businesses in the country: 1.8 million businesses, about 30% of the total. In fact, one in two small businesses are in the Southeast region. About half of the 6.1 million small businesses in the country are located either in Sao Paulo, Rio de Janeiro, Espirito Santo or Minas Gerais. In fact,
There are 70 million people with internet access in Brazil ( more than the total population of France or Italy). Although alluring, it is not easy to succeed in the local online market. For instance, in the past two years, 1,6 thousand group buying websites (most very similar to Groupon) were launched in Brazil. Today, only half is active. The main local winner of all the group buying websites is Peixe Urbano, which employs 750 people and is the gold medal winner of the ranking Top 10 Startups in Brazil.
There are some local laws in Brazil’s bureaucratic jungle that are not easily understood by foreigners. As TechCrunch quoted Fabrice Grinda, French angel investor:
In Brazil, it’s a different story. Logistics and payments work there, but it’s a dangerously litigious country, so startups often find themselves getting sued to oblivion. Grinda shared a story with the audience about a local e-commerce company that had its domain name taken away by some Brazilian judge, effectively killing its business overnight.
Altough the most common hidden cost in Brazil is corruption and SEBRAE only teaches how to play by the book, it definitely pays off to get acquainted with SEBRAE before launching a business venture in Brazil. (See: Investing in Brazil? Don’t Overlook Hidden Costs)