With Brazil’s economic turmoil coming to a close, its economy making consistent positive gains, its financial sector continuing to regrow, and a full-throttle China back in production mode, now may be the ideal time for investors to jump aboard a foreign investment.
However, you’ll need to first understand a few basics about vesting your money in a foreign property. Brazil, in particular, has some unique caveats within foreign investing that you’ll want to familiarize yourself with to ensure a sound investment
Igor Cornelsen, a major investment banker who’s managed some of the largest banking institutions in the world, has some insightful strategies to help investors maximize personal gains, minimize risks, and avoid common pitfalls.
Tip 1: Make Local Connections.
Connecting and networking is a fundamental aspect of building solid business leads and relationships. Brazil isn’t an exception, and with 25% of the 18 to 64-year-old population being business self-starters, it’s simple to solicit new ideas, set up impromptu focus groups, and network with business oriented locals. Cornelsen points out that local, native advice can be worth its weight in gold because they know the changes in the market and circumstances that make an investment profitable or not worth the effort.
Tip 2: Know the currency restrictions and laws in Brazil for foreign investors.
The country has many currency controls in place, and they are extremely strict. According to Cornelsen, a smart investor can use these to their advantage, but they must first know all the foreign currency restrictions.
Brazil has multiple exchange rates for different types of transactions. For foreign currency, Brazil doesn’t have a set exchange rate. It can be changed at will by the Central Bank of Brazil, but there is a set commercial exchange rate in place. Non-residents must find an authorized bank for exchanges. Why does all this matter? Cornelsen points out that an investment’s profit can be destroyed by simply using the wrong foreign exchange rate.
Tip 3: Be prepared for a lot of red tape.
Red tape can make it difficult to break into business, and Brazil is heavy on red tape following their previous economic down spiral. While the economic market is steadily growing, it’s still rather delicate following near economic disaster.
Cornelsen advices to research the regulations ahead of time to know what you can avoid and how to handle any hoops you must jump through. He points out that there’s a restrictive labor market, steep taxation, nonsensical regulations, and a government that’s notorious for over-regulating and underperforming. All the red tape makes it vital to make informed decisions through research.
Igor Cornelsen spent a lifetime learning the ins and outs of investing in Brazil’s market, before semi-retiring to a life of golf in sunny Florida. He now runs an investment firm to help foreign investors navigate the waters he’s already successfully rode. With expert advice like Cornelsen provides, there’s endless potential to make money in Brazil, even if “there is no such thing as free money in Brazil.”