An Investors Guide to Brazil

Brazil comprises 8.5m square kilometers, roughly thirty fives times the area of the UK and is the largest country in South America - the fifth largest country in the world. It comprises of a federation of 26 states, each having considerable autonomy.

Brazil borders with Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay, and Venezuela. It also has a 7,500km Atlantic seaboard.

The massive River Amazon flows through the northern half of the country (the Amazon basin covers more than half of the country) with the impressive Parana through the south.

Rio-de-Janeiro lays on the Atlantic coast to the south, as is Sao Paulo. Brazilia, the capital, is inland.

The country has a number of climatic zones ranging from the Amazon region where the temperature averages 27 Degrees C, to the dry north east where temperatures can exceed 40 Degrees C, and the south near Uruguay where average temperatures are 17 to 19 Degrees C.

The Brazilian economy is the tenth largest in the world, and grew by 3.7 per cent in 2006, up from 2.9 per cent in 2005, and is expected to grow by 4 per cent in 2007.

The Foreign and Commonwealth Office says the country has a history of economic boom and bust, but that economic reforms in the 1990s brought some stability to its finances. These reforms included the launch of its new currency (the Real) to tackle inflation, and a programme of privatisation.

'Brazil is a rapidly emerging world player of great importance to British interests - economic, political and commercial', according to the Foreign Office.

Major industry is in the south and south east. The north east is the poorest region but is beginning to attract new investment.

Overall Brazil is one of the most unequal societies in the world with 5 per cent of the population owning 85 per cent of the wealth.

The threat of terrorism in Brazil is rated as 'low' by the Foreign Office. However, 'there are frequent violent clashes between the Police and drug gangs in the slum areas of Rio de Janeiro. 'You should avoid these areas, remain alert and aware of local conditions at all times', says the FO. Also 'drug trafficking and use is widespread, with severe penalties in Brazil'.

Thefts from cars are common, and cases of car-jacking occur, sometimes with the passengers being taken and made to withdraw money at cash machines. 'Avoid venturing out after dark in quiet streets except under reliable local advice', advises the FO. 'The threat of personal attack is lower outside the cities. However, incidents can occur anywhere, even in holiday resorts that appear relatively secure'.

It also says that credit card fraud is common 'and you should never lose sight of your credit cards'.

British nationals are normally admitted to Brazil without a visa as tourists or business visitors for an initial maximum stay of 90 days, although Brazilian immigration officials can exercise their right to give less than this.

The Foreign Office advises visitors who wish to stay for longer to apply to the Federal Police for an extension in advance of the 90 day period. Those who overstay their visa entitlements are likely to be given 8 days notice to leave the country at their own expense and risk fines or deportation.

UK property investors may buy Brazilian property subject to some specific restrictions applying, for example, to islands and rural land. However, a pre-requisite is to obtain a Cadastro de Pessoa Fiasica - an official tax identification number issued by the Brazilian federal tax authority and required for a range of formal transactions.

Obtaining this documentation can be longwinded and involves obtaining Portuguese translation of the applicant's birth certificate authenticated by the Brazilian consulate in the applicant's home country. However, some developers will assist buyers to obtain CPFs.

The property buying process is similar to others involving verification of documentation by a notary public. However, the process is assisted by a reliable national land registry containing details of title and charges. Even so, buyers are advised to appoint their own solicitors.

Mortgage finance is extremely difficult for overseas investors to obtain in Brazil and is expensive. Payment by instalments for new properties is also likely to be an expensive form of finance.

If funds are transferred to Brazil to pay for properties this should be done via the Central Bank of Brazil as otherwise there may be problems later in repatriating amounts.

Seed Newsvine

Bookmark this article in your preferred program

Comments

Add Comment

Popular Articles in this cathegory

This article is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.