Why Expanding a Business to Brazil is a Serious Challenge
Brazil is a terrific market in which to expand a business. The country has the largest economy in Latin America, a massive consumer base, and has been a haven for tech startups over the past few years.
However, Brazil is one of the world’s most challenging countries for U.S.-based businesses to enter via entity establishment. The country has an incredibly complex and constantly changing tax regime making mistakes almost inevitable.
If you were to establish an entity in Brazil but found that the market expansion wasn’t working out, you would have to keep your books for five years. This is one of the primary reasons to use Globalization Partners: to test the market without the risk and headache of entity setup.
Employment in Brazil is generally governed by collective bargaining agreements, and employees have access to significant employment-related benefits. For example, employees in Brazil are entitled to vacation pay, which must be paid before the employee takes the vacation.
There is statutory severance, retirement severance, and 13th-month pay as well. It’s easy for companies entering Brazil for the first time to get tripped up on the level of benefits and protections required for employees.
This is where our Global Employer of Record Model comes in. Globalization Partners helps companies expand internationally without having to establish a subsidiary in country by putting your employees on our payroll and assigning them 100 percent back to you.