Foreign investors are coming back to Brazil. The largest country in Latin America is finally coming out of an economic tailspin. Michel Temer, the current president of Brazil, is pushing for new trade agreements with China, Britain, Russia and the United States, and he is also getting rid of state-owned businesses that hang around the government’s neck. Temer may not be the best man for the job, but his open communication with other countries and his willingness to get the economy moving in the right direction again is good news for investors. Igor Cornelsen, the former Brazilian banker, and current manager of an investment firm that specializes in Brazilian investments likes to give his investors three tips before they sink money into the Brazilian market, according to cbs8.com.
The first Cornelsen tip is to connect with someone living in Brazil. Brazilians like to talk, and they stay up with local and state news, so they know how startups are doing before the press does. A Brazilian contact should have business or banking experience, but that is unnecessary if investors are up to speed in terms of asset research. The second Igor Cornelsen tip is, expect government red tape. Brazil’s government and legal system are a mess, and they cover that mess with crazy regulations, high taxes, and a weak labor market. Investors must be able to get through the red tape in a timely manner in order to make money in Brazil.
The third Igor Cornelsen tip is to know the rules of the Brazilian foreign exchange market because the rules can change at any time. Investors need help from an authorized Brazilian bank so they take advantage of the different exchange rates. There is a commercial exchange, a black market exchange rate, and a regular exchange rate. The Central Bank of Brazil can change the commercial rate at will.