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Jean-Paul ILLY
Head of International Desk Latin America

Support by the
Crédit Agricole group

Last updated: September 2021

The Crédit Agricole Group has a presence in Brazil with a branch of Crédit Agricole CIB, Banco Crédit Agricole Brazil (bank for Brazilian and foreign multinationals). SODICA Corporate Finance, a subsidiary of the Crédit Agricole Group specialised in mergers and acquisitions, active in Brazil with its network of partners abroad.

For more information, see the list of Crédit Agricole Group locations

The International Desk for Latin America of the Crédit Agricole Group supports the Group’s business clients in Brazil to help them implement their operations on location, particularly banking advice, opening resident accounts, and seeking and optimising financing. It draws on the Group’s business units and frontline local partner banks. For non-banking matters, the International Desk offers the support of local legal or accounting offices.

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Means of payment

With Brazil

Company cheque

Bank cheque

SWIFT transfer

Bill of exchange

Promissory note

Documentary remittance

Documentary credit

Usage

Weak / None

Common

Common

Weak / None

Weak / None

Common

Common

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Advice from the
international desk

General Information

Brazil has once more become a vital investment destination due to:

  • Its global economic clout: its GNP is now the 12th-biggest in the world, it is the driving force of Latin America.
  • Its internal market, which is relatively well protected, is one of the 5 largest in the world for many sectors.
  • The exponential growth of the middle class (known as "C class"), the majority of the population (51%). 

The country’s current economic policy has a highly orthodox orientation. The government is deeply committed to the development of a liberal reform agenda, both to support a recovery in GDP growth, and the improvement of the business climate to attract private and foreign investment. After approving a pension reform in 2019, the plan is to push through administrative reform, aimed at reducing public spending and modernising the structure of the administration. Coupled with this is a reform of the tax system into a more straightforward, more logical system aligned with international standards. Brazil does not yet have the equivalent of a VAT. There are a myriad of taxes at the federal, regional (“estadual”) and municipal levels, resulting in a very complex and somewhat cumulative structure that causes distortions throughout the productive chains. Pension reform was a necessary condition for the restoration of public finances but was not sufficient.

At the same time, the government is committed to advancing privatisation and to attracting private capital, particularly for the development of the country’s infrastructure network, which is still rather weak and which hampers the competitiveness of the country’s enterprises. Indeed, the government has already made some advances regarding the privatisation of water sanitation after the Federal Senate passed Law 4162 on 24 June 2020.

Efforts are also being made to deepen integration with the international economy through the signing of new free trade agreements. The country is a founding member of Mercosur (with Argentina, Paraguay, Uruguay) and is involved in several tariff reduction agreements in Latin America. In 2019, the Mercosur-EU agreement was finally signed by the EU after two decades of negotiations; its actual entry into force is still very uncertain. Brazil is also making progress in the process of joining the OECD, which is a government priority.

These efforts demonstrate considerable development, even though economic growth remains rather slow and the political context is still turbulent and uncertain. The Jair Bolsonaro government is considered very conservative on social issues, and the president himself takes authoritarian and controversial positions, coupled with disclosures of corruption scandals, and in terms of his foreign policy. On the other hand, the economic team is very capable, and there is a convergence of political forces in parliament in favour of developing the economic agenda. The outlook for the next few years is, therefore, optimistic.

However,

It should not be forgotten that the government's main objective now is to minimise the impacts of the coronavirus crisis through measures including emergency financial aid to the population (three instalments of R$ 600.00 since April and four additional instalments of R$ 300.00), the "Conta Covid" plan to support the energy and utilities sector (with 30% participation of public banks and 70% participation of private banks), the subsidised credit facility for small and micro-enterprises, etc.
Furthrmore, Brazil remains in a difficult situation, particularly due to its taxation and income distribution that remains unequal, with an education system that is making progress but where there is still room for improvement. Brazilian growth, in absolute terms of total GNP, is marking time. The causes for this are the general lack of productive investment and continued insufficient infrastructure.

From a purely cultural point of view, the Brazilians are very warm, open and welcoming with regard to the French who do not normally encounter any issues in adapting. Brazil is the only Portuguese-speaking country in Latin America. This is also the language used for business in addition to, to a lesser extent, English. Spanish is fairly frequently understood by the Brazilian population, particularly in the south of the country. However, learning Portuguese remains essential for establishing contracts and facilitating integration into professional and social life.

In order to deal with the administrative burden, foreign clients will have to exercise substantial patience in their administrative processes. It is therefore standard, and highly recommended, to make use of the services of an experienced legal and tax firm, and to do so even for simple tasks.
During business meetings it is good to remember that punctuality is highly appreciated.

In order to generate a climate of confidence before any negotiations take place it is the custom to have a very informal conversation about family, travel, sports or even life in general. In addition, it is not rare for certain familiarities to be used in the following business relationship (using the informal “you” in Portuguese, etc.). Finally, it is generally not very well received if you insist on the differences between the French and Brazilian business approaches, as your Brazilian partner may be offended by this.

Means of Payment & Banking Specificities
Foreign exchange controls do not impose any limits on the sums of currencies exchanged but do regulate the economic causes authorising the purchase and sale of currencies. The funds are not credited automatically: the beneficiary must go to his/her agency to sign a foreign exchange contract and provide justification for the economic reason for the funds received.

The government recently laid a bill before Congress, aimed at making Brazil’s regulations and exchange rate processes simpler, more modern and more agile. The proposal includes the exclusion or simplification of registration procedures for capital entry and exit transactions, and the opening up of participation in the foreign exchange market for several financial entities, including fintechs. Furthermore, the government wishes to expand the Central Bank’s competence in regulating the possibility of the authorisation of foreign currency in the country, as well as accounts in reals by non-residents. The objective is to develop the convertibility of the Real and allow better integration of the country into international practices. Proceedings are still at a very initial stage, with no plans for approval, but this demonstrates a very favourable outlook for facilitating currency flows in Brazil.

If issuing a transfer to Brazil it is recommended to indicate, in addition to the beneficiary’s account number (there are no IBAN references in this country), the full name of the beneficiary as per the norms of the Portuguese language, the beneficiary’s address, as well as information regarding the economic reason in either English or Portuguese, etc.).

The potential of the internal market also makes the country highly attractive, and Brazil remains relatively protected. It is therefore often recommended to plan a local production facility. On this point, we would like to note the thoroughness of Brazilian banks’ control departments on the identification of businesses’ financial beneficiaries, which can lead to delays.

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