Bertrand de Solere Blog

Doing business in Brazil in 2023

Summary

GENERAL PANORAMA OF BRAZIL IN 2023
ECONOMIC STABILITY
POLITICAL STABILITY
1. The Predominance of the Judiciary
RECENT IMPORTANT REFORMS
SOME PROMISING SECTORS

1. GENERAL PANORAMA OF BRAZIL IN 2023

5th largest country in the world with 8,500,000 km2; 6th most populous country in the
world with 208,000,000 inhabitants; Latin America’s largest economy; 12th GDP of the world
in 2022.

Beyond these figures, which in themselves present Brazil’s potential, we must add its
economic and political stability. Its natural wealth is incomparable, its human potential
gigantic.

Brazil is a very young country that is moving very fast. Emerging from an exploited,
slave-owned, rural colony, considerable advances have been made in less than two centuries
that place Brazil among the great democratic countries. Some, in Europe and elsewhere, saw
Bolsonaro’s election as president of the Republic in 2017 as a fragility of Brazilian democracy.
It’s the opposite. Not only Bolsonaro failed to get re-elected, but throughout his term he had
to face free and strong opposition, including within the established powers. Few Western
countries can boast of having fined their Head of State for failing to wear a mask during COVID!

“Brazil is a country of dialogue where nothing is done without consensus.”

If the first four centuries of Brazil are the history of a tropical rural world, Brazil is today
a considerable urban power, with 17 cities of more than one million inhabitants and 50 cities
of more than 500,000 inhabitants. This urbanization has exploded in one century. With an
agglomeration of more than 22,000,000 inhabitants (12,000,000 in the city itself) São Paulo is
among the 10 largest metropolises in the world, Rio de Janeiro is not far behind with an
agglomeration of 12,000,000 inhabitants (7,000,000 intramuros).

Brazil’s urbanization has taken place at a frantic pace throughout the twentieth century. The city of São Paulo contained only 20,000 inhabitants in 1850. The city of Brasilia, which emerged from the desert in the 1950s, is the third largest city in Brazil with 3,000,000 inhabitants today.

Brazil’s population has grown from 119,000,000 in 1980, to 170,000,000 in 2000 and to 208,000,000 in 2022 (IBGE). It should stabilize around 2030 at 210,000,000 inhabitants according to IBGE projections. In 1980, children under the age of 14 accounted for 38% of the population and those over 65 for only 4%. In 2020, the population up to 14 years of age fell to 20% and that over 65 years of age rose to 10%. The senior population is arriving in droves! Brazil must adapt with an incentive to immigration and the development of services for seniors.

If Brazil has major social problems, linked to its history of slavery, it is moving fast and
firmly. Its economy and political institutions are stable. Important reforms have been
undertaken over the past 25 years, including under the controversial mandates of Bolsonaro
and Dilma Rousseff.

There are many promising sectors that are expected to attract a lot of investment,
knowing that foreign investors are traditionally welcome and well-treated.

2. ECONOMIC STABILITY

2.1 Floating exchange rate

The value of the Brazilian currency, the REAL, is fixed by supply and demand, in accordance with the floating exchange rate.

The REAL is not a convertible currency equal to the dollar, the Euro, the pound sterling, the yen, the Swiss franc. This currency is not used as a reserve or investment. Economic actors
only seek to obtain real for their expenses in Brazil. This makes it more fragile and unstable.

However, after 25 years of floating exchange rates and several global financial crises, including 2008, the REAL has still performed well. If it took 2 reals to 1 dollar in 1999, today, 25 years later, it takes 5 reals to one dollar. The currency has depreciated, but at a quite reasonable pace in 25 years of floating exchange rates.

In addition, Brazil has reserves of more than $340 billion as of March 2023, allowing it to cushion any abrupt change in the foreign exchange market.

2.2 Inflation target

A tolerated inflation rate is set each year by the National Monetary Council-CNM, composed of the Minister of the Economy, the Minister of the Budget and the President of the Central Bank.

In 2022 the accepted inflation rate was set at 3.5%. In 2023 it is set at 3.25%.

On the basis of this tolerated inflation rate, the Central Bank sets the key rate, called the SELIC rate. It is currently 12.75% per year.

2.3 Balanced budget target

This goal is set by Congress in the annual budget law. It is a question of limiting public spending, to achieve a primary surplus for the payment of the public debt.

It was mainly the non-compliance with this objective by Dilma Rousseff’s economic team, and the budgetary imbalances that followed, that led to her impeachment.

2.4 Foreign investment in Brazil

Brazilians have always paid a lot of attention to foreign capital, which is treated with great respect, as it is essential for Brazil’s economic balance and growth in several aspects.

2.4.1. – First, foreign investment is essential for the balance of payments, i.e. all external accounts, including the balance of trade, the balance of services, unilateral transfers and capital movements.

Brazil has traditionally had a trade surplus. 2022 is no exception with a positive balance of USD 62.3 billion. But it is also traditionally negative with regard to the balance of services, which includes transactions relating to tourism, transport, intellectual and industrial property rights, cultural services. In 2022, services had a negative balance of USD 40 billion. To this deficit in the balance of services, the deficit, also traditional, of the balance of income, that is to say transfers of dividends, profits, wages, interest, must also be added. This deficit reached USD 63.9 billion in 2022.

Thus, with regard to current transactions (foreign trade + services + primary income), Brazil has a deficit of USD 41.6 billion in 2022. This deficit is usually offset by the capital account, i.e. foreign investments. These reached USD 91 billion in 2022.

The Brazilian reserves in foreign currencies are USD 325 billion as of 31.12.2022.

2.4.2 – The second reason why Brazilians want to attract foreign capital is the need to catch up with technology. The Brazilian need know-how from the more industrialized countries.

2.4.3 – The conditions for investing in Brazil are therefore facilitated by the Brazilians who confer an identical legal treatment between national and foreign capital, except for a very few strategic sectors.

It is not necessary to have a Brazilian partner to set up a business in Brazil. There is no prior authorization from the Central Bank of Brazil or the Brazilian authorities to invest in Brazil; there is no constraint to transfer dividends abroad or to liquidate your Brazilian company knowing, moreover, that there is no tax on dividends in Brazil (not yet) nor a tax on the liquidation of a company.

3. POLITICAL STABILITY

With the end of the military regime in 1985, Brazilians set up political institutions similar to the United States of America’s institutions, i.e. a presidential system, with the three branches (executive, legislative and judicial) rigorously separated, in a federal and decentralized structure.

Unlike the United States, however, the constitution is not liberal and provides for a large number of social and economic rules that the three Powers will have to respect.

Brazilian federalism is not as complete as U.S. federalism. It is closer to French decentralization by leaving to the states and municipalities the power to decide their own affairs, but always obeying federal law.

The holder of local power is not a representative of the central state, like the “Préfet” in France, but a governor (state) or a mayor (Municipality) elected by direct universal suffrage with police power.

3.1 The Predominance of the Judiciary

The Federal Constitution of 1988, the supreme norm of Brazil, has not only established a presidential system as in the United States, but it has also established a hierarchy between the three powers since it is the judicial authority, with the Supreme Federal Court-STF that ultimately decides political conflicts. It closely controls the activities of the President of the Republic. The many political tensions during Bolsonaro’s mandate have often consisted of tests of strength between the President of the Republic and the Supreme Court.

This close control of the government by the Supreme Court, as well as the judicialization of Brazilian society, is probably a reaction to the years of military rule. It was necessary to curb the executive and stimulate the right to dissent, under the protection of judicial institutions.

4. RECENT IMPORTANT REFORMS

Brazil is modernizing very quickly, both technologically and legally.

Technologically, Brazil is very advanced on banking and financial issues, offering payment systems still unknown in Europe, such as the PIX, an instant bank transfer system, so

simple to use that you can pay your taxi with it and even the acrobat who, in the street, informs his PIX code to any generous potential passerby.

Highly innovative fintechs are multiplying in Brazil. They come to offer banking access to the countless Brazilians who are still excluded; they offer alternative credit solutions in the face of still very high interest rates; methods of financial administration.

State-of-the-art technology is found in many other sectors. Public administration itself is increasingly and better digitalized. Tax returns have been filed online for more than 20 years. Legal proceedings are increasingly carried out by videoconference. Signatures become almost exclusively digital. The entire procedure of acquiring a property can be carried out by staying abroad.

At the legal level, Brazil is also modernizing very quickly by enacting reforms that bring it closer to OECD member countries.

4.1 Commercial arbitration

With the return of democracy in 1988, the judiciary became the counterpart of the military regime. The constitutional legislator has made the judge the supreme guardian of institutions and citizens’ rights.

Then, from the beginning of the 1990s, the Brazilian citizen, the worker, the consumer, the politician have seized the judge at the slightest annoyance. The judicial system turned a little cluttered and we understand since the mid-90s that we must promote alternative dispute resolution. The Arbitration Act of 1996 is adopted. Since its implementation it has been very successful among economic actors and is highly respected by judicial judges who do not question arbitral decisions.

Between 2020 and 2021, there were about 120 billion Reals (25 billion USD) in arbitration proceedings.

The most prestigious arbitration center in Brazil is that of the Brazil Canada Chamber of Commerce. But there are others just as serious, including the famous International Chamber of Commerce-CCI of Paris which has installed a branch in São Paulo.

4.2 Labour reform

It is a 2017 law that essentially reforms labor law in Brazil, created in the 1930s by President Getulio Vargas. Scattered labour laws are brought together in the Code of Labour Laws – CLT by President Getúlio Vargas in the 1930s, with the purpose of protecting the workers of a Brazil in full urbanization and early industrialization. These laws are brought together under the control of a labour jurisdiction also created by Getúlio Vargas and whose interventionism in employer-employee relations evokes a society more patriarchal than liberal.

The interventionism of the labour court to protect employees has led to a very excessive judicialization, prompting almost all employees to seek some advantage from the judge.

The 2017 reform rebalances the employer-employee relationship, enhances employer employee agreements to the detriment of judicial interventionism and makes salaried conditions more flexible, offering more flexibility to employment relations.

4.3 Law of Economic Freedom

The Economic Freedoms Act of 2019 reduces government intervention in businesses by (i) removing prior authorizations; (ii) eliminating formalities such as certified signatures; (iii) by reducing legal constraints such as the obligation to have a minimum capital or the obligation to have a second partner / shareholder; (iv) reducing judicial interventionism, particularly in the interpretation of commercial contracts.

To open a company in Brazil it is first necessary either to have a residence visa or to be able to appoint a representative, individual, resident in Brazil.

In general, there is no minimum capital required to start a business and it is not necessary to have a partner. The creation of a one-man company under Brazilian law is possible.

Almost all administrative operations are carried out digitally. It is now possible to start a business or acquire real estate without moving to Brazil.

Moreover, public administrations operate based on regulations setting objective rules, which do not allow the administration to decide in a discretionary manner. Residence visas,

for example, are granted almost automatically, as long as the requested documents, clearly listed and determined in the regulations, are provided. The Brazilian administration is tightly controlled by the Judiciary.

However, when issues are more complex, such as the taxation of manufactured goods or environmental permits, then the procedure may be less fluid.

4.4 The implementation of compliance constraints

4.4.1 Anti-Corruption Law (2013)

Any activity in Brazil is first and foremost a question of people. Subjectivity is largely privileged over objectivity. Sponsorship, exchanges of favors, nepotism have shaped Brazilian society. Corruption, in the Western sense of the term, is a logical consequence of this subjectivism.

But if Brazilians live a lot from favors, they also fight a lot against corruption. The “Lava Jato” affair (corruption through Petrobras revealed in 2014) is a good illustration. The vote for Bolsonaro was also a reaction against corruption.

In 2013, Brazilians enacted an anti-corruption law, following Western models. In accordance with this law, if a company benefits from an act of corruption that it did not mandate and of which it did not even know the existence, it may incur criminal liability (strict criminal liability). The fine can be up to 20% of annual turnover.

4.4.2 General Law on the Protection of Personal Data - LGPD

In 2018, Brazilians promulgated their data protection law on the model of the European GDPR. Severe administrative penalties are provided.

The National Data Protection Agency – ANPD, initially attached to the Presidency of the Republic, becomes independent in 2022 and starts issuing the regulations necessary for the application of the law.

Since the beginning of 2023, administrative sanctions may apply. These administrative penalties include a maximum fine of R$50,000,000.00 per violation (approximately USD 10,000,000.00).

4.5 The Immigration Act 2017

Brazil has made significant changes to visa requirements with its new immigration law, enacted on May 24, 2017. This law replaces a 1981 law, with a very different philosophy. Until 2017, the principles that guided immigration regulations were those of national security. The philosophy of the 2017 law is that of humanitarian rights. Thus, since 2017, the regulations rather facilitate the obtaining of visas. For example, it is now possible to obtain a residence visa if you are already present in Brazil. Before, you had to pick up the visa at the Brazilian Consulate in your country of origin.

In addition, new kinds of visa are created. For example, the digital nomad visa, created on 24.01.2022.

With the very rapid aging of the Brazilian population, which is relatively small compared to the size of its territory, it is very likely that Brazil will facilitate the granting of residence visas in the coming years.

4.6 The legal basis for startups: Complementary Law 182/2021

The aim is to create a legal, regulatory, administrative and commercial environment specific to innovative businesses. Key measures:

Make angel investors totally irresponsible for the company’s social and tax liabilities.
Create specific regulation for innovation (“sandbox regulation“);
Facilitate access to public procurement.
Simplification and tax reduction

4.7 Tax reform

Brazilian taxation is traditionally capital-friendly. There is no tax on dividends, for example. But it is too complex when it comes to indirect tax treatment on manufactured goods.

Rather than having a uniform VAT that applies to the entire production of goods or services, Brazilians have several taxes, some specific to services, others specific to the production and trade of goods. Taxes are also the responsibility of different territorial

collectivities depending on the tax in question (Federation, States or Municipalities). All this makes tax management quite complex for companies, mainly commercial and industrial ones.

On the other hand, indirect taxation is such that the more value the good produced, the more it is taxed. Renault do Brasil, in Curitiba, has more interest in buying steel produced in China with Brazilian iron ore than steel produced in Brazil with its own ore.

Thus, a tax reform has been discussed for some time by successive governments, to set up a VAT on the European model; to promote investment; to reduce employee costs and to promote transparency (informing citizens of the tax burden on each product).

This reform is currently under discussion. Its adoption is scheduled for this year 2023

5. SOME PROMISING SECTORS

5.1 Internet and e-business

5.1.1 E-commerce

The e-commerce market in Brazil has experienced significant growth in recent years. According to the Brazilian Association of Electronic Commerce (ABComm), the sector generated a turnover of about 21 billion USD in 2020, which was already an increase of about 37% compared to the previous year (2019). In 2022, e-commerce accounted for a turnover of 34 billion USD, an increase of 61% compared to 2020. ABComm predicts USD 37 billion of e commerce in Brazil in 2023.

Several reasons have enabled this rapid growth, including the two years of Covid-19 that have boosted online acquisitions and boosted consumer confidence. As e-commerce has become more common and businesses have taken steps to ensure the security of online transactions, Brazilian consumers’ trust in online shopping has also increased. This is partly due to the implementation of secure payment systems, security certificates on websites and reviews from other consumers.

Only 10 of the main online sales sites own more than 50% of e-commerce in Brazil. The leader is Mercado Livre with 14.8% market share, followed by Amazon Brasil with 7.9%.

5.1.2 Fintechs

The Brazilian banking system is very strong and very profitable, but it is concentrated, dominated by five major banks: Itau; Bradesco; Santander; Banco do Brasil and Caixa Econômica Federal.

To cope with the bureaucracy and high costs of large traditional banks, many fintechs have emerged in recent years, offering banking access to a large traditionally excluded population. Fintechs play an important role in financial inclusion in Brazil. They have enabled millions of people to access essential financial services such as bank accounts, digital payments, loans and investments.

In addition, Brazil has an avant-garde tradition in finance, linked to the 80s of inflation management, but also to hacker attacks, among the most sophisticated in the world.

The Brazilian government has adopted measures to support the development of fintechs. More flexible regulations have been put in place to encourage innovation and facilitate the entry of fintechs into the market. For example, the creation of the “Regulatory Sandbox” allows fintechs to test their business models in a controlled manner.

In 2022, Brazilian fintechs received USD 2 billion in investment.

Among the most important fintechs in Brazil are: (i) Nubank, a digital bank; (ii) Giabolso, a personal finance control application (66 million users registered in February 2022); (iii) Banco Inter, a digital bank; (iv) Bidu, online insurance broker; (v) Quinto Andar, allows online payments for real estate transactions.

5.2 Civil construction

This sector has always been difficult for foreign manufacturers to access. The Brazilian tradition of patronage and exchange of favors has allowed Brazilian manufacturers to preserve their market.

This panorama changed profoundly with the “lava jato” operation launched in 2014. Judges have revealed a widespread and far-reaching system of corruption through the large Brazilian oil exploration and exploitation company, PETROBRAS. PETROBRAS is a semi-public company, listed on the stock exchange but with the participation of the Federal State, whose economic activity represented more than 12% of Brazil’s GDP in 2014.

The “lava jato” operation revealed that all contracts concluded with PETROBRAS obliged the supplier to pay an additional “premium”, without any economic reason, of about 7% of the contract. This bonus was redistributed between senior PETROBRAS executives and political sponsors. The major Brazilian construction groups had the contracts and paid the “premium” for it.

The judicial operation “lava jato“, which lasted from 2014 to 2021, literally brought down all the major construction groups in Brazil. The economic crisis from 2016 to 2019 finish off them.

In 2015, the revenue of these groups was around 21 billion USD, in 2019 it plummeted drastically to 2 billion USD, a shrinkage of 89%. The top 12 companies involved lost USD 115 billion between 2014 and 2020.

Today, only 10 Brazilian construction companies have more than 200,000,000.00 USD revenue per year.

(i) With the economic recovery in 2023; (ii) the new contractual culture put in place with the anti-corruption law of 2013 and the “Lava Jato” operation; and (iii) the submission of traditional Brazilian manufacturers, Brazil’s construction industry is a sector to conquer!

5.3 Sanitation

In 2022, 50% of Brazilians do not have access to sewer treatment; 16% (35 million people) do not have access to treated water; 40% of treated water is lost, due to network failures (data from the National Sanitation Information System – SNIS).

Only 6% of municipalities have their sanitation system treated by private companies that nevertheless meet 20% of total investments in the sector. The remaining 94% of municipalities are in the hands of public companies (state or municipal companies), with the help of the Federal Government.

A new law enacted in 2020 clarified the responsibilities of local authorities, a clarification that should reduce conflicts between communities and revive investment projects.

This new law abolishes the monopoly of state-owned enterprises, which must follow the same conditions as private companies to obtain concessions.

With the great crisis caused by COVID 19, when Brazil was barely emerging from 4 years of recession, and the increased awareness of the public health deficit linked to unclean and untreated water, this major reform of sanitation enthusiasts all Brazilian economic actors who see it as a major factor in reviving the economy.

The law sets objectives: universality of water and sewer treatment by 31.12.2033. The investments needed to achieve this are estimated at more than USD 110 billion.

5.4 Agribusiness

Five years ago, Brazil’s largest communication network, the private network Rede Globo, launched an advertising campaign about the agricultural world with the slogan “Agro é tech, agro é pop, agro é tudo” (“Agro is technological; Agro is pop; Agro is everything”), still on the air in 2023. This campaign has aimed to bring the urban world closer to the rural world, recalling that the agricultural world of Brazil is one of the main economic sectors of the country.

In 2020, goods and services generated by agribusiness accounted for about USD 400 billion, or 27% of Brazil’s GDP, including agriculture 70% and livestock 30%. Soybeans dominate, followed by beef, corn, milk, chicken, sugar cane. The Getúlio Vargas-FGV-Ibre Foundation expects the sector to grow by 8% in 2023, the ITAU bank 10%.

The sector accounts for 50% of Brazil’s exports. In 2022, exports of agricultural products amounted to USD 159 billion, an increase of 32% compared to the previous year. Imports were limited to US$17.24 billion, resulting in a positive trade balance of US$142 billion.

Brazilian farms are gigantic territories adapted to extensive production, super equipped, and with yields often higher than large North American farms, with several harvests per year.

The potential for growth is still enormous with about 100 million hectares of arable land available, without touching the Amazon. Brazil has the largest reserve of arable land on the planet. Brazil should become the breadbasket of the world!

The success of Brazil’s agriculture is also due to its water reserves, corresponding to 18% of world reserves.

The farms are very modern, and Brazil is the territory of agrotech. In 2022, USD 200 million was invested in agro startups.

5.5 Mineral wealth and rare earths

Brazil is rich of the exuberance of its nature, its natural resources, including 18% of the world’s water reserves, and its mineral wealth.

The 2000s saw the growth of its flagships of the mineral industry with its gigantic industrial groups PETROBRAS, for oil exploration and production, and VALE for mining.

1150 billion tons of minerals produced in 2021, for 68 billion USD of turnover, including 10 billion USD of export balance.

As for oil, Brazil is among the 10 largest producing countries and holds a reserve of 12 billion barrels.

As for “rare earths”, Brazil holds the second largest reserve in the world, with 22 million tons of estimated reserves, but still produces very little, only 500 tons in 2022.

5.6 Energy

“Brazil has already achieved its electric transition” (R. Klein, CEO Voltalia). With 78% of its energy matrix coming from renewable energy, Brazil is the third country in the world in renewable energy production, behind Norway and New Zealand. It is also the third country in installed capacity, behind China and the United States, with 150 GW.

Installed capacity:

(i) Hydroelectric: 110 GW;

(ii) Thermal: 46GW;

(iii) Wind power: 25 GW

(iv) Solar: 29GW

A very sunny country with constant winds, especially in the Northeast, Brazil offers ideal conditions for the development of wind and solar power, already corresponding to 54 GW of installed capacity.

Brazil is at the forefront of green hydrogen production and should become one of the most competitive countries in the world by 2030. By 2030, Latin America should contribute more than 25% of global green hydrogen exports.

(source: Voltalia)

5.7 Services for seniors

With a young population for a long time, Brazil has never really paid attention to the needs of the elderly. These are traditionally cared for directly by their families.

But the context is changing at a breakneck pace. The population over 65 already reaches more than 10% of the total population, or 20,000,000 people. According to the Brazilian Institute of Geography and Statistics-IBGE, the population over 65 years of age is expected to correspond to 15% in 2034 and more than 20% in 2046.

A gigantic market of services to seniors is therefore opening up. Large international groups have recently arrived to invest massively, such as Orpea or Korian.

5.8 Human resources and the labour market

Brazil has about 43,000,000 employees registered as of December 2022. 80% of companies operate with temporary work, subcontracted to specialized companies. Companies commit an average of 19% of their budget to temporary work (source CNI). Temporary work continues to grow at an accelerated rate of more than 20% every year compared to the previous year. About 2,400,000 temporary jobs were created in 2022 (2,000,000 in 2020). 740,000 temporary jobs were created in the first quarter of 2023 (source: Asserttem). In 2023 the labour market is expected to grow thanks to temporary work.

Brazil’s labor law is the subject of a labor code whose principles were established in the 1930s under the presidency of Getúlio Vargas, at a time of urbanization and industrialization of Brazil. The principles were then those of stability and a broader responsibility of the employer on the lives of its employees.

In the twenty-first century, the nature of work has changed. It is no longer a question of making a career in the same industrial group organized in silos and very hierarchical. The worker has become highly mobile and autonomous.

Brazil’s Labour Code underwent a major reform in 2017 that (i) rebalanced the employment relationship, making the employee more responsible; and (ii) making terms and conditions of employment more flexible with temporary and intermittent jobs.

Before 2017, temporary work was only possible for the intermediate activities of the companies. It is now permitted for the company’s purposes.

Thus, faced with the cumbersome management of employees, faced with the worker’s own evolution (more mobile and autonomous) and thanks to the new legislation of 2017, temporary employment companies are developing at an accelerated pace.

5.9 Vocational training

With a long history of masters and slaves, manual labor is traditionally devalued in Brazil. The only recognized education has long been intellectual training in European and American universities. Manual training of industrial technicians began with foreign industrial investors.

Then, under the impetus of the union of industrialists, the CNI, the SENAI (National Service of Industrial Apprenticeship) was created in 1942. SENAI is now one of the five largest vocational education complexes in the world. In addition to SENAI, the “S system” of vocational apprenticeship includes SENAC (commercial training), SENAR (rural training) and a few others.

But less than 10% of Brazilian students choose a vocational training (they are more than 50% in the European Union). This is probably due to the old Brazilian slave culture that has long devalued manual labor.

However, the advantages obtained by those who have vocational training, compared to those who do not, are such that the demand for such training is only growing.

In addition, throughout their professional careers, Brazilians constantly follow professional training. They are very demanding, regardless of their level, from senior manager to employee.

5.10 Cosmetic products

For decades, Brazil has been among the three most important markets in the world for cosmetics. This is not just a superficial contemporary trend, but rather the manifestation of the very nature of Brazilians, inherited from the first inhabitants of the country, the Tupi Guarani, of legendary cleanliness, instilled in European settlers with an equally legendary filth.

Brazilians are very attached to cleanliness and, from there, to a beautiful and hygienic appearance, without stains, without defects. Brazil is the country of dentists, plastic surgeons and, of course, cosmetics.

Cosmetics accounted for USD 34 billion in 2022 and generated 5.6 million jobs (source ABIHPEC).

Five companies account for 48% of the market: Natura & Co; Boticário; Unilever; L’Oréal and Colgate Palmolive.

Bertrand de Solere
Lawyer at Rio de Janeiro and São Paulo
French Foreign Trade Advisor-CCEF

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