Pinnacle Group Of

Institution
Enlightening Young Minds…..
 Business Process
Institute

Vocational Computer training-

training – Language
English and Databases
personality Hardware, and
development networking.

Placement cell – tie

up with
consultancies
 Reasons Why Brazil Is The Best Place To
Invest
• Eighth largest Economy by nominal GDP

• Ninth largest by purchasing power parity

• GDP – purchasing power parity $1.99 trillion

• GDP Per Capita – purchasing power parity $10,100

• Over 50 per cent of the population is economically

active, making Brazil the seventh-largest consumer
market
• Expected to be the third largest market for PCs in
2010.

• The fourth most preferred destination for Foreign

Direct Investment (FDI) among emerging markets.

• Brazil the Eighth largest IT market in the world

• IT sector alone had revenues of US$ 65 billion in

year 2010.
 Brazil GDP-real growth rate

Year GDP - Real Rank Percentage

Growth Rate Change

2007 3.70 % 138 60.87 %

2008 5.40 % 101 45.95 %
2009 5.10 % 81 -5.56 %
2010 .10 % 104 -98.04 %
GDP-REAL GROWTH RATE
 Inflation Rate

Inflation Rate Rank Percentage

Year
(Consumer Prices) Change

2007 3.00 88 -56.52%

2008 3.60 92 20.00%

2009 5.70 92 58.33%

2010 4.20 128 -26.32%

Percentage contribution of various sectors to the
GDP

• Agriculture: 5.5%
• Industry: 28.7%
• Services: 65.8%
•Population below poverty line: 23.5%

•Labour force: 95.21 million

•Unemployment rate: 7.3%

Legal And Political
 Government and Business
• Federative republic.

• Extends tax benefits for investment in less developed parts of the

country.

• Economic reforms and liberalization measures for longer term

economic stability and prosperity

• The government now is more focussed in improving the education

system in Brazil by setting various schemes in-tact so that the
education reaches out to all
 Anti-Trust Litigation in Brazil

•Antitrust litigation is a legal action related to Anti trust

proceedings.
•The Brazilian competition and antitrust agencies and authorities in
Brazil are:
1. CADE – Administrative Counsel for Economic Defence – is a federal
government entity linked to the Ministry of Justice.

2. SDE – Secretariat of Economic Law of the Ministry of Justice – is a

government body of the Ministry of Justice competent to provide legal
and documentation support to CADE.

3. SEAE- Secretariat for Economic Monitoring of the Ministry of Finance-

is a government body of the Ministry of Economy and Finance that also
assists CADE.
Environmental Protection Law
• National Environment System - SISNAMA
• The following principles constitute
fundamental cornerstones of Brazilian
environmental law:
1. Principle of Sustainable Development
2. Principle of Cooperation
3. Principle of Prevention
4. Principle of the Polluter as the Payer
 Tax Laws
• Federal taxes : Income tax, industrial production,
foreign trading, loans and insurances, rural
property, large fortunes.
• State taxes : Circulation of goods and services,
Property of automotive vehicles, tax on death
and donation.
• Municipal taxes : Tax on services, tax on property
of real estate, tax on transmission of property of
real estate.
• Receita Federal : The ultra-powerful Brazilian Tax
Secretariat.
• Income Tax of Individuals.
 Foreign Trade Regulations
• As a country and emerging economy, Brazil remains a very
attractive market and over the last few years Brazil has been
placed among the top five destinations in the world for
foreign direct investment (FDI).

• The financial and banking system in Brazil is a very modern

one. It has been marked by a capacity to adapt to drastic
changes in macroeconomic conditions.
 Doing Business in Brazil
• There are four terms that one encounters in commercial and
financial dealings in Brazil

1. Custo Brasil : Broadly defined, this is the extra cost of doing

business in Brazil, above and beyond that which would be
normal if it weren't for corruption, legal and bureaucratic
complications, excessive taxation, and sub-standard
infrastructure.

2. Brasil cresce de noite : Brazil grows at night. This is a well-

known truth. No matter what the government does to hold
back the people, Brasil will get by and grow, even if at night.
3. Jeitinho : The concept of 'jeitinho' is flexibility, it is a
person who always finds 'his little way' around rules and
regulations.

4. Caixa 2 : There might not be any business in Brazil that

does not have a "caixa 2", meaning translated 'Cash
Account Number 2'. It is all money or assets that are
kept off the books and official records. This, of course,
keeps it away from the tax authorities.
 Socio Cultural
• Population – 198,739,269*
• Official Language – Portuguese
• Most populous Portuguese-speaking country
in the world
• Currency – Brazilian real (BRL)
• Capital city – Brasilia
• Gender bias
• Inequity of wealth distribution
• The HDI for Brazil is 0.813, which gives the
country, a rank of 75th out of 182 countries with
data
• TIME CONCEPTION - Time in Brazil is approached in a
very relaxed and flexible manner.
• SOCIETY - Brazil is a collectivist society which places
family at the centre of its social structure.
• Families in Brazil tend to be large and close-knit,
providing members security and connections.
• Brazilian business culture - Often family members will
be found working for the same company, either family
owned or otherwise.
• Brazil is called a high context culture - One needs to
establish personal relationships when conducting
business in Brazil.
 EDUCATION

•One half of Latin America's illiterate population lives in

Brazil.
•20 percent of Brazil is completely unable to read. The
figure for functional illiteracy is at least double that
amount.
•Percentage of English speaking population-3%
• Requirement of IT trained professional is huge
as IT is growing
• Free market economy – FDI is huge
• Requirement of English speaking population
for employment.
• Awareness regarding IT opportunities is
increasing.
 IT sector in Brazil

• Growth rate : 8% (unexpected growth)

-2009

• Current IT industries in brazil –Infosys,

Wipro, TCS, Cognizant
• Population that own a computer -2%

• Schools having computer – 19%

• Computers are expensive- because consumer

businesses suffer from high tax burdens, costly
logistics, an underdeveloped national retail
infrastructure and strong protectionism for the PC
industry

• BroadBand pricing – service is expensive  - 1 Mbps plan

costs between R$ 50 and R$70, equivalent to about
US$ 23 to US$ 32
 CSR
• Government aided program : One laptop per
child

• Government Lending Laptops to school

children

• Collaboration with the Brazilian government

to educate the school children in computers
 Risks
•A lot of procedures for a start up --- ranked 129 in ease of doing business

•High Cost incurred in registering a firm - Cost ranges from 4.9% of income
per capita in the Federal District, to 49% in Maranhão . But costs in several
states are similar to São Paulo—between 10 and 13% of income per capita

•Separate taxes for federal, state and municipal levels

•Complex tax system adds to cost and time. Takes 2600 hrs typically.

•Registering property is very cumbersome (takes 61 days and costs 3.5 % of

property value)

•Obtaining credit is very difficult. Collateral registration is costly. Also lenders

are reluctant as laws prevent them from seizing assets of defaulters without
filing lawsuit
•Cost of computers and other related equipment is high in
local market

•Time is approached in a relaxed manner, so there is no

inclination to stick to deadlines and plans i.e. incorporating
corporate IT culture will be difficult.

•Business meetings has to be arranged two to three weeks in

advance. Also meetings are often delayed or cancelled
without any prior warning.

•Crime and corruption add to the woes as we have to deal

with the local issues which are difficult to apprehend.

•Need to generate employment in compliance with the law of

the state and federals or else the business could be
expropriated.