1. Chapter 6: In This Chapter Introduction Foreign ownership Financing Commercial real estate Residential real estate Rental property Licensing and brokerage Government Legal system Economy and business Taxes and fees What you need to know Beyond the basics Key contacts Page 141

2. Map of Brazil Source: CIA World Factbook Page 142

3. Introduction to Brazil Portuguese is official language Strong economy – BRIC nation Energy – Diversification necessary – Non-renewable reserves – Energy efficiency and renewable energy Page 142-146

4. Brazil—The Rich Tapestry Source: Wikipedia Page 146

5. Brazil—The Rich Tapestry Source: Wikipedia Page 147

6. Brazil—The Rich Tapestry Source: Wikipedia Page 147

7. Brazil—The Rich Tapestry Source: Eyes on Brazil Page 148

8. Foreign Ownership of Real Estate Restrictions on: – Borders – Some coastal lands – Rural properties Additional restrictions on agricultural land in 2010 Page 148-149

9. Financing Expansion of mortgage market – Increased protections for lenders – Expanding middle class – Government subsidies Foreign residents may obtain mortgages but face difficulties Cash transactions still common Page 149-150

10. Commercial Real Estate Strong market Lots of construction Market drivers: – Sports events – Growth Acceleration Program Source: FIFA Source: Rio 2016 Page 150-152

11. Residential Real Estate No official data Construction, prices, and sales up according to reports – Disagreement among analysts over existence of bubble Second-home market Minha Casa, Minha Vida Global Demand for Luxury Second Homes Source: Knight Frank and Itacaré Capital Page 153-154

12. Rental Property Pro-landlord – Varies by state – Caseload makes evictions lengthy Leases Professional property management in demand Page 154-155

13. Licensing and Brokerage Licensing required Listings Transaction process Page 155-156

14. Realtor.com/international Page 157-161

15. What You Should Know About Government Federal presidential democratic republic with executive, legislative, and judicial branches Current constitution enacted in 1988 to democratize the country Mostly pro-market policies to foster growth should continue – Some instances of protectionism, however Page 162-163

16. Legal System Civil law system Contract disputes adjudicated at state level Judge decides all civil cases Page 163-164

17. Economy and Business Diverse economy Some challenges related to declining demand for commodities Sociopolitical pressures to improve living standards “Brazil costs” Still one of the top places to invest Technology and communications Page 164-168

18. Real Estate Taxes and Fees Tax or FeeAmountPaid by Transfer Tax2-4%Buyer Notary Fee1-2.5%Buyer Land Registry FeeApprox 0.75%Buyer Legal Fees0.5-2%Buyer Agent Commission6%6%Seller Municipal Property Tax0.3-1.5%Owner (Buyer) Federal Rural Property Tax (some properties) 0.03-20%Owner (Buyer) Source: Global Property Guide, International Living, Pathfinder Ltd. Page 168

19. Business and Income Taxes Individual income tax – Residents: Progressive up to 27.5% on worldwide income – Nonresidents: 27.5% on earned income, 15% on other income on Brazil- sourced income only Business income tax – Combined rate of various taxes: 34% Withholding tax – Interest: 15% for nonresident corporations – Royalties: Generally 15% Capital gains – Individual: 15% – Business: 15% on nonresident corporations on investments registered with Central Bank Value-added tax – Federal: average of 20% – State: 7-25% Other taxes Page 168-169

20. What You Need to Know Strong, diverse economy with some challenges Mortgage market growing but difficult for foreigners to obtain financing Commercial market drivers – Sports events – Growth Acceleration Program Residential market on the rise Professional property management in demand Licensing and CRECIs MLSs: RedeSecovi de Imóveis and Redimob Technology and communications Mostly pro-market policies but some instances of protectionism Page 169-170

21. Beyond the Basics Greetings Attire Appointments Business practices Business dining Taboos Visas Page 170-173

22. Key Contacts SECOVI-SP COFECI Brazilian-American Chamber of Commerce Brazil-U.S. Business Council USA Embassy in Brasília USA Consulate General Rio de Janeiro USA Consulate General São Paulo USA Consulate Recife Brazilian Ministry of Tourism Page 174-175