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Brazil today is proving itself able to face turbulences and global financial crisis soundly and, as a result, is gaining increased attention from international media and global investors. After India, China, Indonesia and the U.S.A., Brazil represents the fifth largest market opportunity in the world. Recent International Monetary Fund (IMF) reports indicate that Brazil leads all other South American countries in terms of infrastructure and technological development.

In an international business expansion, people seeking to expand their global enterprise into Brazil encounter challenges while doing business within this rapidly evolving economy. There heavy business regulations accompanied by numerous bureaucratic hurdles spread out among various governmental agencies. Below are the top five corporate compliance concerns facing businesses looking to expand to Brazil:

• Brazil Lacks a “Place of Business” Concept

Brazil is one of the few countries that lack recognition of a “place of business”, from an organizational and logistical standpoint. Brazil’s strict requirements stifle the establishment of ground teams or pop-up operations. Foreign business entities must exercise a lease on premises from day one to initiate business dealings within Brazil. The setup of a branch office in Brazil requires presidential approval, with the only viable option to setup a subsidiary even if only to hire one employee. This requirement demands that businesses be very certain and very prepared for the expense of establishing a presence in Brazil before ever setting foot in the country.

• Fulfilling the LTDA Requirements

The most common business entity is the “Limitada.” While this is touted as the simplest office to establish in Brazil, it is by no means a simple and flexible process to create. Organizations must contend with a labyrinth of steps and these steps and time estimates may differ from state to state. One reason the process can take so long is that the filing requirements are spread out across various governmental agencies, both federal and state. Compliance issues surrounding the Limitada not only police the establishment of a business, but its closing as well.

• Corporate Tax Filings

Brazil has different categories of indirect taxes, both federal and state thus VAT, sales and taxes meet multiple filings requirements and making expert accounting help a key consideration for any organization setting up shop in Brazil. These filings do not occur in concurrence or in consideration of corporate calendars. For companies setting up cost centers in Brazil, the regulators do not recognize the generally accepted OECD “cost plus” model for intercompany agreements.

• Employment Law

Employment represents another myriad of regulations for foreign entities in Brazil. Organizations seeking to establish a presence in Brazil are wise to closely study employment laws in the country, as they will inevitably find themselves tethered to a number of complex national-to-foreign worker ratio requirements, unemployment insurance regulations, social security taxes, termination restrictions and payroll laws. When hiring in Brazil, it

pays to be very certain of the employees brought on board to a new company, as termination is very difficult.

• FCPA Regulations

Pay attention to the Foreign Corrupt Practices Act (FCPA). Last year legislation was introduced in Brazil designed to require Brazil to comply with international agreements for combating bribery. This legislation is designed to bring Brazil directly into the international mainstream regarding legislation to prevent bribery and corruption addresses civil and administrative liability for corporations for corrupt acts relating to Brazil’s national and foreign public administration.

Depending on the opportunity there are many doing business in Brazil. While Brazil offers a wealth of opportunities to prospective investors looking for international expansion, it is also a country beset with bureaucratic and cultural difficulties .It is imperative to do your homework in advance and take the help of a professional advisor, who can make your expansion easy by providing unlimited assistance in areas of significance like regulatory filing requirements, tax equalization expat, etc.