Top 5 Reasons to Invest in Brazil
Brazil's Advantages Offer Potential Profit Opportunity
Sep 29, 2009
Financial pundits often refer to the BRIC countries as new world economic growth drivers replacing the U.S. The BRIC countries - Brazil, Russia, India and China - are the fastest economic horses in the world's stable of large developing countries. If an investor understands currency options and trend forecasting, then Brazil offers princely profits over the long term.
Brazil’s Agricultural Advantage
Agricultural exports of corn, soy, sugar, and beef help give Brazil a trade surplus of $4.62 billion in June. The previous years June surplus was $2.73 billion, showing the trend for increasing trading profits.
Advantages for farming in Brazil include:
- Abundant available land at lower prices than the U.S.
- Lower cost labor averaging approximately $450/month versus $1000/month+ in the U.S.
- Well developed agricultural technology from EMBRAPA, the government/university partnership for distributing farming knowledge.
- Ideal weather in the middle and Northern regions with year round sunshine, and large rainfalls feeding aquifers.
- Developing infrastructure and ports for transporting farm products, such as the new North to South railroad development.
Brazil’s Population Advantage
Not only are farms productive, but the people are even more productive. Brazil’s population of 180 million people reproduce with a positive growth rate of 1.23% compared to Russia’s -0.5% rate. China has a one child policy resulting in a near halving of the population over time.
With the healthy population growth rate, the younger generation adds energy, a consuming population, and good source of labor for new industries. Much of the population lives near the famous beaches and cities of Rio de Janeiro, Sao Paolo, Salvador, and Fortaleza. Farming operations have begun attracting the coastal population into Brazil’s vast interior because they need the workers and offer opportunity.
After former president Juscelino Kubitschek lead the creation of the capital Brasilia in 1955 by scraping away a forest in the middle of Brazil, the interior has grown in importance economically.
World-wide demand for food will help maintain the rapid growth of the population and the utilization of this countries abundant interior lands.
Brazil Trading Partners
Unlike the U.S., Brazil has open trade with all countries despite the punitive import taxes. China, Europe, and even the U.S. need food imports so they all put up with the 50-150% import duties imposed when they export to Brazil.
Having no real enemies because the army operates only within the country's borders means all countries can expect fair treatment. Almost every country buys some products in the agricultural sector. Sugar is one of the main exports, but corn, soybeans, and cotton are fast becoming primary exports, and even some finished products from companies such as firearms manufacturer Taurus International, and aircraft producer Embraer.
Warm Weather Means High Profits
The middle and Northern region of Brazil generally stay between 65-95 F year around. Tourism flourishes under sunny warm skies. Plants of all varieties- other than wheat- can produce year round instead of having seasons slow them down. People can also enjoy themselves more maintaining a healthier lifestyle outdoors, and an energized attitude because of sunlight exposure.
Few people can stay unhappy while enjoying a sunny day at the beach. Beaches define the Brazilian attitude of “Tudo Bem” meaning “It is all good.”
Brazil Welcomes Investment
An investors visa requires approximately $85,000 deposit in a Brazilian bank plus a minority natural Brazilian citizen as partner. Then an investor can form a business and operate as a native Brazilian would. This is much easier than some countries where a foreigner cannot own land or open businesses without as much as a 50% partner from the host country.
Brazil will lead the world by feeding it and becoming a growing influence in tourism and culture.
