Potentially Brazil is one of the most frustrating countries in which to do business due to the ‘Custo Brasil’ or Brazil Cost, which is a catch all description that encapsulates the problems generated by law, bureaucracy, taxation, poor communication, administrative inefficiency to name a few challenges. Problems due to these factors are gradually diminishing, but those new to the country need to beware.
Because of the Custo Brasil anyone new to the country does need a fixer or ‘despachante’, and choosing one with the right connections is important. The most important consideration is not knowledge of a particular industry but the level of generic knowledge and contacts that will enable them to move things forward. And because Brazil has so many unique business characteristics there is real benefit to be had from consulting experts at the very earliest stage of business.
Brazilian company structures are based on hierarchy with only the most senior executives making decisions. It is their important to ensure negotiation is at a high level, but sometimes there are complications. Due to a variety of politics that pervade many companies some senior individuals may not have the decision making power that their office would normally come with. You need to be sure those you have contact with have the necessary control, and taking expert advice is the only way you can be confident in these matters.
Once you have established the right contacts it is important to nurture the relationship. Business in Brazil is based on individuals knowing and trusting each other and contact has to be maintained face-to-face. Doing a deal and exchanging occasional emails is not enough. And if a contact leaves a company the relationships building process has to begin again with the replacement person.
First encounters with new business contacts in Brazil are usually quite formal, but as relationships develop they quickly become much more relaxed. Expect a lot of non business related discussion in meetings, and do not try and hurry them. Punctuality is not a key point in Brazilian psychology, and outsiders may have to be prepared to adopt a more relaxed approach than they are used to. In fact, this is a good rule of thumb for all elements of business in Brazil.