Business Culture

Foreigners looking to do business with Brazil should gain insight into its business customs. Understanding the business environment, language and culture is a good starting point. Additionally, knowing how to negotiate a deal and being aware of its legal system will help.

Business environment

Brazil moved from economic isolation to global integration in the early 1990s. This shift was driven by a wide-ranging privatisation program, renegotiation of foreign debt, the signing of the Common Market of the South (Mercosul) Treaty and extensive import tariff reductions.

From the outset, it is important to understand that Brazil is far from a “new frontier”. Many underestimate the strength of Brazil’s local industry and services and overlook the long-standing presence of multinationals manufacturing and providing services within the country’s borders. Brazil’s Stock Exchange (the B3) is the largest in Latin America and among the most liquid in the world. Excessive bureaucracy, language, cultural differences and a complex legal environment have historically been, and continue to be, the key hurdles faced by foreigners looking to do business in Brazil. Yet, Brazil’s 215 million-plus population, with its robust financial, agribusiness, IT and mining sectors, and its urgent need for infrastructure, offer great opportunities for those willing to manage the associated risks.

Language and culture

Although the sophisticated elite, senior executives of large companies and young executives speak English, Brazilian Portuguese is Brazil’s sole lingua franca. Spanish is mostly understood (and will allow the foreigner to “get by” on the streets) but speaking Brazilian Portuguese, or having a suitably qualified translator, is a definite advantage. Foreigners are generally surprised by how little English and Spanish (or any other foreign language, for that matter) is spoken in Brazil, especially outside the large state capitals.

Brazilian humour draws substantially from the language. Slight nuances between words often carry different meanings, and a person’s social standing is quickly assessed based on their grammar and pronunciation.

Few government bureaucrats speak English. Correspondence in English sent to authorities is almost invariably ignored.

Brazilians are generally more informal than Anglo-Saxons and northern Europeans. During meetings, Brazilian businesspeople will invariably chat about soccer results, their children’s schooling, or even politics. Outside the city of São Paulo, things move more slowly, so Brazilians may arrive late for meetings.

Brazilians can become “close friends” very shortly after meeting someone. However, this is often a superficial relationship and several hurdles may still have to be faced before a deal is closed. Brazilians may take months or years to make a final decision – but they will hug you, if you are a male, and kiss you once, twice or even three times (depending on the region of the country) on the cheek, if you are a female, when merely saying “hello” or “goodbye”.

Personal connections, “name‑dropping” and recommendations are common and generally encouraged. Even though this can be an advantage in any country, in Brazil it is especially important. On average, Brazilian business people are more susceptible to such tactics than their western counterparts, perhaps as a consequence of mistrust in Brazil’s institutions.

Sarcasm, although present, is much less prevalent than, for instance, in the UK, Australia or New Zealand. Due to cultural differences and translation issues, sarcasm should be avoided as it could dangerously backfire against the person using it.

Brazilians tend to gesture more during speeches and are generally quite loud. What may look like a frantic discussion ready to explode into a physical confrontation is probably just a spirited argument about who is the best player in the soccer league.

Negotiating a Deal

It is very difficult to define a singular “Brazilian way of doing business”. Brazil is simply too vast and diverse, with significant regional differences, so there is no one-size-fits-all formula. Hence, you may consider the following issues when negotiating with Brazilians no more than a rough checklist:

Do your homework: obtain information on the latest economic, political, sports or news about Brazil and the region that you are visiting;
Build strong relationships: Brazilians will invariably agree to pay more to those whom they trust and know personally – try to visit Brazil as many times as you can;
Think of the long term: it is extremely difficult to make a “quick buck” in Brazil – take your time and adopt a long-term view;
Don’t take things at face value: Brazil has high levels of corruption – background checks and due diligence are very important;
Get good advice: Otto von Bismark once said that only fools learnt from experience and that he preferred to learn from the experience of others – obtaining good advice will help you avoid many pitfalls;
Put things in writing: you cannot rely on your personal relationships alone to protect your legal position – properly drafted contracts are still the best way to protect you if the deal goes sour.

Keep in mind that although Brazil has the most robust and least corrupt legal system among the BRICS nations, it is still not an easy place to do business. There are several issues that differ quite substantially from the way business is conducted elsewhere, particularly when compared to developed countries.

Legal System

Brazil is a civil law jurisdiction – that is, it follows the Franco-German (also called “Continental European”) legal tradition.

Laws are codified and all but some specific Federal Supreme Court decisions have a binding effect on lower courts. Brazil has a far-reaching and detailed Constitution and various codes, presidential decrees and regulations that comprise its total body of law.

Brazil is also a very litigious nation. Court disputes can take over a decade to be finalised. Court proceedings rely heavily on written materials and are very formalistic.