Why invest in Brazil?

 

Largest economy in Latin America

  • Brazil is the largest economy in Latin America (2021), ranking among the 15 main economies in the world¹;
  • The country has the second best economic climate assessment in Latin America (2021)²;
  • 13th largest economy in the world in 2021, with a nominal GDP of US$ 1.5 trillion³;
  • It was the 4th largest foreign direct investment (FDI) destination in 2019: US$78.6 billion, which is equivalent to 44% of the volume received in Latin America.

Great potential for tourism

  • The Ministry aims to double the number of international tourists by 2030;
  • The tourism sector corresponded, in 2019, to 7.7% of the Brazilian GDP, that is, 596 billion reais (WTTC);
  • More than 96 million arrivals by domestic tourists;
  • Around 6 million international tourists (2019);
  • The export rate of tourism services in Brazil is 26% higher than the average for Latin America in 2021;
  • Largest hotel and tourism market in Latin America, with 77,072 companies, 537% more than the regional average (2021)¹⁰;
  • According to the Financial Times’ fDi, the average cost of starting a business in the sector, thanks to recent administrative reforms, was $383.00 in 2021¹¹.

Unique natural attractions

  • Brazil has six biomes (Amazon, Caatinga, Cerrado, Atlantic Forest, Pampa and Pantanal), some of which are unique on the planet.
  • Brazil has 336 federal conservation units, with more than 170 million hectares, with 65% of the native vegetation being preserved¹²;
  • The federal government plans to grant these units to investors, realizing their immense tourist potential, currently underutilized in the tourist perspective¹³;
  • For example, federal PAs had only 15,335,272¹⁴ visits in 2019. The US had 327,520,000¹⁵ visits in 2019 for its 419 PAs.

World’s largest concession program

  • From January 2019 to August 2021, 111 privatization projects were completed under the PPI. These initiatives resulted in R$125 billion in grants and will mobilize investments of R$544 billion throughout the execution of the contracts. Considering the 55 projects that may be auctioned by the end of 2021, an additional R$295 billion in investments can be added and at least R$23.3 billion in grants¹⁶;
  • For 2022, 124 federal assets are eligible for concession, with estimated investments of R$ 316 billion, including airport concession¹⁷.

Connectivity and geographical location

  • There are international airports in all state capitals¹⁸;
  • 6th largest civil aviation market in the world in transported passengers, with 102 million passengers in 2019 (IATA)¹⁹;
  • 9th largest domestic commercial aviation market in 2019 (IATA) in annual growth rate (4.5%)²⁰;
  • A founding member of ICAO, Brazil is above the global average in all eight safety and efficiency criteria, proving the state of the art in civil aviation in the country²¹;
  • The country has 3 of the 10 busiest hubs in Latin America (2019)²²;
  • Brazil is in the heart of South America, bordering all countries on the continent, except Chile and Ecuador²³.

Visa Exemption

  • The visa waiver for four strategic countries (the United States, Canada, Australia and Japan) stimulates the tourist flow, creating more business opportunities and strengthening the sector ²⁴.

Opening Airlines to foreign capital

  • The opening to 100% of foreign capital participation in commercial aviation increases competitiveness, attracting new and low cost companies, with better fares for passengers, an increase in the number of routes and cities served by regular air transport, as well as better integration with international routes ²⁵.

Innovation

  • The Ministry of Tourism, in partnership with other bodies, has adopted policies aimed at digitization and promotion of smart destinations, especially through the National Plan for the Internet of Things (IoT), established by the federal government in June 2019²⁶;
  • In addition to the partnership with the Wakalua Innovation Hub to foster startups in the tourism sector. There were 101 tourism startups in 2019²⁷.

Economic freedom

  • The Economic Freedom Act (Law 13,874) reduces red tape in Brazil and facilitates the business environment. The end of permits for establishing low risk companies, the digitization of documents, innovation and strengthening of contractual instruments are some of the benefits presented by this new law²⁸;
  • “Balcão Único” is another measure to facilitate the opening of companies, consisting of a digital one-stop-shop designed by the Special Secretariat for Debureaucratization, Management and Digital Government of the Ministry of Economy in partnership with the National Secretariat of Federal Revenue. With this, we seek to settle the number of procedures and days necessary to open a company in the country, gathering the demands of three governmental spheres in a virtual portal²⁹.

Partnerships & Tourism Investment

 

The development of the tourism sector in Brazil is a top-priority for the Ministry of Tourism. In that sense, the Ministry has worked in close collaboration with the Ministry of Economy and Ministry of Infrastructure to coordinate policies that directly impact the tourism sector, especially those related to credit and infrastructure.

Since 2019, Brazil has had an intensive agenda of reforms that aim at cutting red tape and improving the business environment. For example, the pension reform modernized the social security system in Brazil and the tax reform, which is under discussion in Brazil’s Congress, aims at streamlining the tax system and fostering legal certainty. All these measures comprise a robust agenda of reforms that are much needed to boost Brazilian economy in the coming years.

To advance an important agenda of public private partnerships (PPPs) and concessions for tourism development, we have worked in close collaboration with the Ministry of Economy, especially with the Investment Partnership Program (known in Portuguese as PPI).

Brazil is developing a unique portfolio of projects for PPPs and concessions, which includes historic sites, natural parks and public properties with touristic potential. Economic and assessment studies are underway and the PPPs and concessions will be carried out in 2021 and 2022.

The synergy and integration of these initiatives add momentum to a necessary policy shift in Brazil. We are working hard to guarantee a better environment for the industry and to create a prosperous environment for investments in tourism.

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For more information on investment opportunities in Brazil, contact our team: [email protected]