BRAZIL

Andrew Czarnecki

Overall Score: 56.6 World score: 118

Brazil quick facts compared to the USA

population: 198.3 million/ 318.9 million

GDP: $2.4 trillion/ $16.77 trillion

GDP growth: 2.3% / 2.2%

unemployment: 6.6% /

inflation: 6.2% / -.1%

Foreign direct investment: $64 billion /

Large companies of Brazil

Legal System

Brazil is a Presidential Federal Republic. It follows the 1988 Constitution, the sixth the country has ever had. The Justice activity is independent from the Congress and the President. It's divided in common Federal Justice and specialized Federal Justice. A 2014 survey, which indicates that 85 percent of Brazilians disapprove of President Rousseff’s policies on corruption and crime.

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Competitive Markets

Brazil’s average tariff rate is 7.7 percent. The government has worked to improve customs procedures, but non-tariff barriers deter imports of goods and services. Foreign investment in aviation, insurance, and other sectors is limited. The financial sector is diversified and competitive, but the state’s role remains significant. State-owned banks control over a quarter of assets and direct loans to certain preferred sectors.

Limits on Government Regulation

The government can have strict regulation on business. Bureaucratic hurdles include lengthy processes for launching a business and obtaining permits. The non-salary cost of employing a worker adds to the cost of doing business, and labor regulations remain stringen. There has been a rise in inflation since 2011.

Capital Market

For years, Brazilian capital markets have lagged behind the domestic economy in terms of size and growth potential, and have struggled to keep up with a number of international markets. As one of the world’s most significant growth economies, it is essential for Brazil to develop a market structure more in line with those found in the world’s leading financial centres, such as New York and London. A closer look at the market in Brazil reveals the obvious need for competition in order to stimulate growth and facilitate investor access to global investment opportunities.

Monetary stability

Brazil's inflation rate is nearly at a 10 year high. It is predicted to lower soon. Central Bank of Brazil creates Financial Stability Committee. The duties of the new committee are: to guide the central bank's committee on regulation and supervision of financial markets, capital, insurance, private pension plans and other similar national and international forums; maintain financial stability by defining strategies and guidelines.
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Low Tax Rates

Brazil's taxes are nothing crazy. Fortunately they have social security tax just like the U.S.. Their other main task is income tax. Brazil also allows tax reductions under specific circumstances.

Free Trade

The free trade of Brazil is limited. There are certain zones in which it is allowed. There are approximately eight of those zones. Each zone has its own taxes and rules.