Recent developments in Ceará state also have attracted attention. The metropolitan area of its capital city, Fortaleza, will be home to 12 new planned urban neighborhoods. The zones surrounding Fortaleza's port and industrial complex are appealing to developers, mainly due to the availability of large areas for construction.
Q: Can you describe the business environment in Brazil? What are some challenges U.S. firms can expect?
A: For engineering and architectural firms, registration through accreditation bodies such as CREA, which comprises the regional engineering councils, requires a lot of time and effort. Taxes are high, whether for importing products or establishing a business. However, this is not unique to U.S. firms operating in Brazil as even local firms are subject to higher taxes than are customary in the U.S.
Among several categories, World Bank’s "Doing Business 2014" report ranked, out of 189 countries, Brazil at No. 130 in dealing with construction permits and at No. 109 in getting credit. Having service providers with local expertise, including lawyers, customs brokers and accounting firms, is essential to understanding how the business environment works. They can assist once a company has chosen its method of market entry, such as opening a subsidiary or establishing a joint-venture partnership. Despite these challenges, many U.S. companies do well in Brazil, as there is much business to be done.
Q: Are U.S. companies already participating in major infrastructure projects?
A: A wide range of U.S. architectural, engineering and construction firms are doing business in Brazil’s infrastructure market as opportunities continue to grow. For example, in Rio, home of the 2016 Olympics, Los Angeles-based engineering firm AECOM won the design contract for the Olympic Village; New York City architect Diller Scofidio + Renfro won the bid to design the new Sound and Light Museum on Copacabana Beach; and Hanse Golf Design, a small Pennsylvania firm, won a highly competitive bid to design the Olympic golf course.
More U.S. firms are also establishing a local presence in the market. Fluor Corp., headquartered in Texas, recently arrived to compete for engineering and construction projects in the oil and gas industry. Engineering firm Parsons, which recently worked on an energy transport project in Brazil, has established a presence in São Paulo to pursue opportunities in the power, industrial plant, pipeline, airport and subway sectors. Many U.S. firms also have taken great advantage of the U.S. government presence and programs in the country, including studies funded through the U.S. Trade and Development Agency.
Q: What is your best advice for success in the Brazilian market, and how can the U.S. Commercial Service assist U.S. companies?
A: It’s important for U.S. firms to think long term. Brazil is not a market in which closing deals happens overnight, and this is certainly the case in the construction and engineering sectors. Also, it is critical to find a Brazilian partner who knows Brazil. The U.S. Commercial Service has a number of programs to help with this process. The best way for U.S. companies to enter the Brazilian market is by visiting Brazil. Interested firms should participate in trade shows or take advantage of the U.S. Commercial Service’s Gold Key Service (GKS) to meet with pre-screened potential partners. In addition, many U.S. companies participate in U.S. Commercial Service trade missions.
U.S. Trade Mission to Brazil
In October 2013, the U.S. Commercial Service collaborated with the American Institute of Architects to bring a delegation of 10 architectural and engineering firms on a trade mission to Brazil. These small and medium-size firms with niche expertise met with city and state officials and urban planners through one-on-one appointments arranged by the U.S. Commercial Service in Rio de Janeiro and Recife. More than 100 meetings were held, primarily with Brazilian engineering and architectural firms looking to partner with U.S. firms with expertise in construction and design. Several of these meetings already have generated new trade leads and potential opportunities for U.S. businesses. For example, mission participant SHW Group, Plano, Texas, recently signed a partnership with a Brazilian firm for future collaboration on infrastructure projects involving educational facilities.
Contact the U.S. Commercial Service As part of the Dept.of Commerce’s International Trade Administration, The U.S. Commercial Service helps U.S. companies export through a worldwide network of offices in more than 100 U.S. cities and U.S. embassies and consulates in more than 70 countries. For more information on selling to Brazil, visit www.export.gov/Brazil or your nearest U.S. Commercial Service office.
Joel Reynoso is a commercial officer in Rio de Janeiro; he can be reached at Joel.Reynoso@Trade.Gov. Patrick Levy is the commercial specialist in charge of the architectural, construction and engineering sectors; he can be reached at Patrick.Levy@Trade.Gov.