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Seven reasons to invest in Brazil

by | Jan 3, 2023

In addition to its vast expanse of natural resources, Brazil also benefits investors with a large domestic market and strategic location in South America. Foreign capital also benefits from the country’s competitive advantages and opportunities that are offered by the nation’s:

  • Sizable domestic market
  • Diversified economy
  • Thriving export sectors

These are in addition to the excellent opportunities offered by the weakening of the exchange rate of the Brazilian currency, the real.

Beyond these reasons, other advantages that motivate international businesses to invest in Brazil are:

Brazil is one of the largest countries in the world

It is the fifth largest country in the world and the first in Latin America, with an estimated 217,240,060 inhabitants in 2022, according to data published by Wikipedia. This means that entering Brazil is a significant development opportunity for companies, as they have a high volume of potential customers.

Brazil is among the world’s largest economies

Brazil closed 2022 with a gross domestic product (GDP) of 1.833 billion dollars. This figure makes  Brazil the 9th largest nation in the world economy and the leader in Latin America. Also, in the study published by Goldman Sachs in 2001, “ Building Better Global Economic BRICs, ” Brazil was identified as one of the countries with the most significant growth potential, along with Russia, India, and China.

Brazil is one of the world’s principal destinations for foreign direct investment

Brazil had become one of the primary recipients of foreign direct investment (FDI), acquiring particular relevance in the 2000s when the inflow of capital into this country increased considerably.

The top five countries that invest in Brazil are:

  • Portugal
  • Italy
  • Spain
  • China
  • France

The United States is ranked sixth among foreign direct investors in Brazil.

Brazil invests heavily in clean energy

Brazil occupies seventh place in the world in investment in clean energy, demonstrating this class of energy’s importance for the country. In this sense, it has become one of the leading countries in the world in terms of solar potential, promoting significant photovoltaic installations within its borders. Currently, its capacity is twice as high as the average capacity of Germany, one of the world leaders in using this energy.

Brazil has also invested heavily in wind energy. As a result, in 2021, is ranked the 7th country in the world in using this form of energy, according to the publication Power Technology.

Brazil has drawn up a National Energy Plan 2030 highlighting renewable energies as alternatives to satisfy the growing electricity demand, increase its photovoltaic and wind capacities, and improve regulation.

Brazil possesses a dynamic agricultural sector

One of the main sectors in Brazil is agriculture. The nation has the world’s largest surface area of cultivable land, and the sector represents four percent of the annual value added to Brazil’s gross domestic product.

The Government is set to invest in Brazil further by promoting the development of new technological solutions to increase the availability of land and production. This is being done to influence the sector’s global competitiveness positively.

Brazil is a leader in the automotive industry

This sector represents 23% of the country’s industrial GDP. It generates 1.5 million jobs. Due to its proximity to suppliers and customers, Brazil represents a strategic location within Latin America for companies in this sector. Just over ten years ago,  a program (Innovar-Auto) was initiated to offer tax benefits to create conditions to increase competitiveness.

Contact LATAM FDI to discuss your foreign direct investment plans in Latin America.

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