Working in new markets Dorine Sohier – 2AOAF – English 2

Welcome to Brazil A short introduction before doing business in a country with a completely different business culture.

The country

Brazil, officially the Federative Republic of Brazil (Portuguese Répéblica Federativa do Brasil) is the largest sovereign state in Latin America. A federal republic, Brazil is the world’s fifth-largest country, by both geographical area and total population. It is the largest Portuguese-speaking country in the world, and the only one in the Americas.

Geography Occupies a large area along the eastern coast of South America (coastline of 7,491 km) Includes much of the continent’s interior, sharing land borders with: * Uruguay to the south * Argentina and Paraguay to the southwest * Bolivia and Peru to the west * Colombia to the northwest * Venezuela, Guyana, Suriname and French Guyana to the north  except Ecuador and Chile Occupies 47,3 percent of the continent of South America With a total area of 8,515,767 km²

Main cities Brasilia: capital since 1960, before then it was Rio de Janeiro São Paulo: the largest city Belo Horizonte Campinas Curitiba Fortaleza Porto Alegre Recife Rio de Janeiro Salvador

Climate Brazil comprises a wide range of weather conditions across a large area and varied topography But most of the country is tropical Brazil hosts five major climatic subtypes: * equatorial: rainforests in the north, there is no real dry season, but there are some variations in the period of the year when most rain falls * semiarid: deserts in the northeast, this region receives less than 800 millimetres rain in 3 to 5 months * temperate coniferous forests in the south * tropical savannas in central Brazil, rainfal is more seasonal * highland tropical

Politics The form of government is that of a democratic federative republic (With a) presidential system The president is both head of state and head of government Is elected for a four-year term The current president is Dilma Roussef who got re-elected in However, there is a procedure against her to demand her resignation for corruption and a lot of governmental cut-backs. In the middle of april, a part of Parliament decided the procedure against her can be continued. Now Senate has to decide.

Population 2015 estimate: +/- 205,338,000 83,75% of the population is defined as urban Heavily concentrated in the Southeastern (79,8 million inhabitants) and Northeastern (53,5 million inhabitants) The Center-West and the North, which together make up 64,12% of the Brazilian territory, have a total of only 29,1 million inhabitants Brazilian Diversity Brazil is a mixture of races and ethnicities resulting in such diversity * Ethnic groups: 43,73% White, 43,13% Multiracial, 7,61% Black, 1,09% Asian and 0,43% Amerindian Religion: Roman Catholicism (73,57%), Protestantism (15,41%), Buddhism, Judaism and Islam

Brazilian Family Values Is the foundation of the social structure Forms the basis of stability for most people Families tend to be large, although family size has diminished in recent years The extended family is quite close The people derive a social network and help in times of need from the family Trust is of primary importance

Economy Brazil is Latin America’s largest economy, with 43% of Latin America’s total GDP (Gross Domestic Product) alone Has a mixed economy with abundant natural resources Active in agricultural, mining, manufacturing and service sectors Has a labor force of over a 107 million (ranking 6th worldwide) (And) unemployment of 6,2% (ranking 64th worldwide) Is the world’s largest producer of coffee Has become the fourth largest car market in the world Major export products include: aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, steel, coffee, orange juice, soybeans and corned beef In total, Brazil ranks 23rd worldwide in value of exports

FIFA World Champion and Olympics The FIFA World Championship football in 2014 helped the economy with about 30 milliard dollars Because of the FIFA WC, hotels had 45% extra bookings. That helps keeping the country visible on the long term Creation of 1 million extra jobs The organisation of the Olympic Games in Rio happens for the very first time in a South-American city / country It is expected to give the country an other economic boost, just like the FIFA WC There are (expensive) updates to infrastructure like ports, airports, building, … both by government and private investors as partners

Brazil – The country of the present? Key facts and highlights With a large geographical territory and a population of 205 million, the opportunities in Brazil are countless Government investments are creating new opportunities: * infrastructure (not only in anticipation of the Fifa World Cup (2014) and Olympic Games (2016) but also to meet the demands of a wealthier population) * oil and gas exploration * mining * defense Social and economic assistance for the lower classes is boosting consumer spending levels, benefiting numerous industries Doing business in Brazil Some of the obstacles companies face are: * complex regulations * extensive bureaucracy * increasing competition

Business etiquette Language in Brazil Most Brazilian executives accept English as the language to do business Most of the business, however, should be conducted in Portuguese The non-Portuguese speaking executives may need an interpreter for most of business relationships The correspondence, often, should also be in Portuguese Brazilians, in general, prefer the English as a second business language Spanish isn’t an alternative to Portuguese

Relationships and communication Brazilians need to know who they are doing business with before they can work effectively. Brazilians prefer face-to-face meetings to written communication as it allows them to know the person with whom they are doing business. The person they deal with is more important than the company. Since this is a group culture, it is important that you do not do anything to embarrass a Brazilian. Criticizing an individual causes that person to lose face with the others in the meeting. The person making the criticism also loses face, as they have disobeyed the unwritten rule. Communication is often informal and does not rely on strict rules of protocol. Anyone who feels they have something to say will generally add their opinion. It is considered acceptable to interrupt someone who is speaking. Face-to-face, oral communication is preferred over written communication. At the same time, when it comes to business agreements, Brazilians insist on drawing up detailed legal contracts.

Business negotiation Expect questions about your company since Brazilians are more comfortable doing business with people and companies they know. Wait for your Brazilian colleagues to raise the business subject. Never rush the relationship building time. Brazilians take time when negotiating. Do not rush them or appear impatient. Expect a great deal of time to be spent reviewing details. Often the people you negotiate with will not have decision-making authority. It is advisable to hire a translator if your Portuguese is not fluent. Use local lawyers and accountants for negotiations. Brazilians resent an outside legal presence. Brazilian business is hierarchical. Decisions are made by the highest-ranking person. Brazilians negotiate with people, not companies. Do not change your negotiating team or you may have to start over from the beginning.

Business meeting etiquette Business appointments are required and can often be scheduled on short notice; however, it is best to make them 2 to 3 weeks in advance. Confirm the meeting in writing. It is not uncommon for appointments to be cancelled or changed at the last minute. In São Paulo and Brasília it is important to arrive on time for meetings. In Rio de Janeiro and other cities it is acceptable to arrive a few minutes late for a meeting. Do not seem impatient if you are kept waiting. Brazilians see time as something outside their control and the demands of relationships take priority over adhering to a strict schedule. Meetings are generally rather informal. Expect to be interrupted while you are speaking or presenting. Avoid confrontations. Do not appear frustrated with your Brazilian colleagues.

Dress etiquette Brazilians pride themselves on dressing well. Men should wear conservative, dark colored business suits. Three-piece suits typically show that someone is an executive. Women should wear suits or dresses that are elegant and feminine with good quality accessories. It is expected that your nails are manicured. Business Cards Business cards are exchanged during introductions with everyone at a meeting. It is advisable, although not required, to have the other side of your business card translated into Portuguese. Present your business card with the Portuguese side facing the recipient.

Etiquette and customs in Brazil Meeting etiquette Men shake hands when greeting one another, while maintaining steady eye contact. Women generally kiss each other, starting with the left and alternating cheeks. Hugging and back slapping are common greetings among Brazilian friends. If a woman wishes to shake hands with a man, she should extend her hand first. Gift giving etiquette If invited to a Brazilian’s house, bring the hostess flowers or a small gift. Orchids are considered a very nice gift, but avoid purple ones. Avoid giving anything purple or black as these are mourning colours. Handkerchiefs are also associated with funerals, so they do not make good gifts. Gifts are opened when received.

Dining etiquette If you are invited to a Brazilian’s house: Arrive at least 30 minutes late if the invitation is for dinner. Arrive up to an hour late for a party or large gathering. Brazilians dress with a flair and judge others on their appearance. Casual dress is more formal than in many other countries. Always dress elegantly and on the side of over-dressing and not under-dressing. If you did not bring a gift to the hostess, flowers the next day are always appreciated.

This was only a short introduction. You can not develop the Brazilian market unless you understand the mindset, the culture, the business practices, the structures and the customs of its industry and administration. Concretely You have to know much about the country and you have to be aware of their way of doing business. Inform yourself before initiating your first contact!