Things to consider when bidding for work.
More from: Winning construction work: Brazil
• Currency: the real (plural reais). £1 is about R$3.50.
• Green legislation: LEED is being introduced by the Brazilian Green Building Council
• Contract types: Larger firms use Design and Build and those working on big industrial projects use Engineer, Procure and Construct. The government announced in July that PPP would no longer be used for highways and railways and these contracts would now be bid on a concession basis. The law does not allow preferred bidder status so bid costs can be high.
• Partnering: Firms can set up without a Brazilian partner, but local legal advice should be sought. www.brazil.org.uk/commercial/index_assets/legalguide.pdf is an overview of the legal system.
• Tourism: In tourism developments a JV may be set up with a local investor. The underlying JV vehicle is a Brazilian company, and legally required documents must be in Portuguese.
• Tax: The structure is complex, with high rates compared to international standards.
• Ownership: Foreign investors can own 100 per cent of a hotel asset, but they must establish a Brazilian subsidiary.
• Visas: Any foreigner who makes an investment of US$50,000 (£32,400) or more can apply for a permanent visa.
• When not to go: December to February is mid summer and carnival time so there will be less desire to do business then.
• Politics: Consider the political cycle. There are federal and national elections every four years and this will affect government spending. Elections will take place in the more deprived north east, which the government is pouring money into, in October 2010.
Doing business in Brazil: Facts and advice