Office Considerations

Considerations
São Paulo is Brazil's largest business center. The vast majority of multinationals operating in Brazil have their headquarters in Greater São Paulo. If they are not in São Paulo or the surrounding cities, they are elsewhere for specific reasons. The incentives to be in São Paulo are:

• International quality of office space.
• A large and sophisticated financial and business center.
• For executives and their families, excellent fenced neighborhoods.
• Flights to anywhere in the world every single day.
• Proximity to other growing markets in the region, especially Argentina.

Advantages
Because of the exchange rate today, US dollars can buy and significantly offer a strong position when negotiating for office space.

Rental Considerations
When negotiating for office rental expenses make sure all other costs are discussed. Office rental agencies should explain "Condomínio" (monthly contribution to maintenance of the office and building) costs. Also rental contracts are normally for one year (few exceptions). Other expenses, if not properly addressed, can sometimes be almost as expensive as the rent itself. Make sure that the following items are covered:

• Water Bill (check average cost in the building).
• Electrical Bill (same as above).
• IPTU (Municipal Tax Bill).
• Telephone Line, computer line, and fax line. (It is common to be overcharged if you don't ask).
• Receptionist (Many offices have a single individual that answer and direct all calls for a particular building).
• Parking availability (how many vehicles are you entitled to).
• Heating systems (older buildings still use the European gas type and an extra cost could be associated with that).
• Property Insurance (check what is covered).
• Air conditioning issues (not all buildings have central air and most often the air conditioners that you find are VERY noisy and distracting. Most modern properties have central air conditioning and two-pipe fan-coil systems operating on a floor-by-floor basis. São Paulo annual common temperature is about 22.5° C (72.5° F) with frequent summer spells over 35° C (95° F).

Telephone line used to be very expensive, only recently with the privatization of this type of services the lines are becoming more available and less costly. Please check what type of line is available in the office you are planning to rent. Some older buildings have not updated their systems and have analog phone connections. Tenants must normally provide some form of rental deposit. The most common is the "fiança" (a set aside bank guarantee fund). This cost can be up to 6% of your one-year rental agreement.
Also in Brazil, tenants are responsible for small repairs, taxes, condominium charges, cleaning, and energy bills. Most rental agreements are standard contracts unless using some special type of agreement. An inadequate initial location can impact the efficiency of the entire start up. To avoid expensive mistakes it is advised to have a local professional for all these details.

Negotiations
It is most advantageous to you to start thinking like your local associates. Because the local market would identify you as an international, they will immediately associate you with US dollars. Even though some transactions could potentially be done in US currency, Brazilian law requires that local contracts be specified in "Real" (Brazilian national currency). The official exchange rate fluctuates. However, in the airport and hotel exchange bureaus you will pay 10-20% premium.

Start Phase
Once the office has been decided, the first step is to have a senior or individual laying the groundwork. If a potential partnership or joint venture is being formed, it is common to share the partner's premises.

At this stage the incoming company should have already established, or be in the process of establishing an administrative nucleus. Again, a local advisor would be a tremendous asset at the juncture. The next issues will be related to contracting supporting services (account, attorney, etc . . .).

Be Aware

• Safety. São Paulo has a very high crime rate similar to most major world cities. Foreign executives and their families are advised to take big city precautions. If you are planning to carry or have any type of cash available in your office. It should be secret and known only by your general manager or office manager. A security guard should be considered. For security reasons it is also advisable to have a small quantity of cash available if faced with life threat. Get advice from security companies.
• Greater São Paulo is standardized on 110-volt 60Hz outlets; however few areas of the country and specific determined outlets in your hotel or other facility will have 220 volts. Always ask!
• Power cuts are becoming more frequent with the high demand of a growing region. This aspect could be a subject of future discussion. A local study should be conducted to evaluate the possibility of having power shortage in the area you are planning to establish your office or facility. Also, consider power backup for computers and telecommunication equipment.

Also, transportation in the city relies heavily on buses, mini vans, local trains, and subway (Metro). When traveling within the city limits it is most convenient not to drive and to use other means of transportation.