Bringing Your Business to Brazil

Purpose
My intention with this synopsis is to provide some key information that will help to clarify and guide new business prospectors in Brazil. The activities described in this brief are recommendations and provisions necessary to a successful business startup in Brazil. Knowing that each business does have its own characteristics, the appropriate approach will depend on how the company wants to be set up. Most of the topics can be bureaucratic and timing consuming. However, they are all equally important and when properly addressed can save an enormous amount of time and resources. International companies are at a disadvantage when not accessing and taking the necessary precautions to understand the dynamics of Latin America business culture.

Presence
I. GREENFIELD ALONE
International companies do have an easier and most lucrative profile when establishing themselves with the local government. The local, state, and federal governments do have special programs intended to assist international companies. These programs are available for companies willing to start new business. The government is also seeking new ways to generate new jobs and are in search of companies that can bring new technologies into the country. Establishing a presence in Brazil can be accomplished and is as simple as using one person operating out of an office. This person should be familiar with all matters regarding startup and the preference would be a local bilingual individual. This would eliminate difficulties with the language and cultural barriers that a foreign would encounter.

II. EXPANDING EXISTING BUSINESS
This alternative is to create a branch of an existing business abroad. Although this alternative sounds easier to follow, it does not receive any special attention or possible tax breaks often offered by the government to newcomers.

III. BUY OR JV WITH A BRAZILIAN COMPANY
This option could certainly bring new business/new customers immediately. A certain amount of time would be necessary to establish the proper relationship. It will demand a careful analysis with complete due diligence of the company by a third party. Liabilities related to past due taxes, labor litigation, and environment are the most common causes that disturb and delay joint ventures in Brazil.

Fundamentals

A. A market brief to determine what is the best way to present your product in Brazil. It will provide marketing understanding and allow further research that can be the basic database for establishing the company's marketing strategy. B. Market segments and information on current competitors. C. List of Brazilian companies - potential partners, potential clients, distributors, representatives. D. Cultural immersion - translations and adaptations of all materials, web site, brochures into Brazilian Portuguese E. Government and entrepreneurial recommendations - trustworthy companies and individuals.

DEVELOPMENTAL PHASES

1. BUSINESS STRATEGY
A. Marketing - percentage to be imported, manufactured, sold, and exported.
B. Finance - profitability and economic risks.
C. Customers Perception - quality, reliability, competitiveness, support.
D. Brazilian Team - multifunctional, trained, involved, professional.
E. The Office and Facility - location advantages, strategy, availability of professionals.

2. A PROPOSED WORKING / MANAGEMENT SYSTEM
Proposing and adapting the necessary items to be a lean and profitable organization. The goal is to enable reaching the strategic targets with minimum investment, and to lower the risks of a costly operation.

List of Main Steps for Implementing a New Company in Brazil
These steps should be proposed after evaluating the options for every aspect of the new business. The suggestion is to organize in "Microsoft Project" with day-by-day and target goals established. For this synopsis I use a manufacturing facility as an example of implementing factory issues. Also, regulations to construct other types of plants will follow similar legislation where city codes must be observed at all times.
Example:

• Purchase Order or Equivalent Contract of
• Select Initial Team Members
• Legal Issues

         · Creation of the company in Brazil
         · Articles of Incorporation
• Office Building
• Supporting Staff
         · Select law firm
         · Select broker
         · Select accounting support
         · Select insurance company
         · Select bank
• Personnel Issues
         · Contract managing director
         · Select/assign administrative secretary
         · Select/assign team group
         · Train all teams
• Define Plant Basic Parameters
         · Define number and type of equipment
• Site Selection
         · Define Geographical location
• Determine Site
• Site Issues
         · File for city license
         · File for fire marshal license
• Building Issues
• Environmental Permits
• Equipment Issues

After establishing a legal presence in the country the next step is to organize your thoughts regarding the technical issues of a new facility.

3. OPERATIONAL ISSUES
The issues listed below are a follow-up of the above list. It is complementary information regarding operation and should be used as a reference guide to be consulted. The list should be updated as the events are solved and become more feasible.

1. Electrical: project, contracting quantity, 440V, 380V, 220V / 3 phase, 127V, transformers, points, drops.
2. Water: volume, water reservoir, pressure, waste disposal company to remove effluents, indoor treatment.
3. Metal / Aluminum Scum: treatment, company to remove effluents.
4. Hydraulic, mechanical, pneumatic: service type or need;
5. Air quality: conditioning, plant, offices.
6. Rigging: choosing the appropriate contractor.
   
7. Purchasing Services: recommended to have its own.
8. Receiving inspection protocol: quality issues.
9. Maintenance: To support operation having its own personnel, hire a contractor, machine repair parts, MRO inventories and storage.
10. Material handling: fork lifter and operator.
11. Gage calibration / metrology / metallurgical lab / equipment: what to have and what to contract outside gage records, recall system, spares storage, and rehabilitation.
12. Janitorial and cleaning services for facility.
13. Environmental: environmental engineering company to license waste streams.
14. Scheduling, logistics, EDI: responsible for providing support in these areas.
15. Document control: handling document control and storage within the facility, machine drawings, process prints, master control programs, product prints, gage drawings, purchasing records, and shipping.
16. Tool room support: having its own area of manufacturing, buying from an outside contractor.
17. Chemicals MSDS sheets.
18. Internal accounting records: petty cash.
19. Reject disposition, salvage loops.
20. Inventory control.
21. Cafeteria/ contract food service: estimated number of employees.
22. Internal communication: integrated system with the various departments.
23. Electronic communication of Engineering: set up a electronic system to send and receive information from any company.
24. Telephone/facsimile/copier: to support the operation and customer's needs.
25. Safety and ground care: contract an outside security