The GDI identified a good financing environment (13) as the Brazil’s major strength with the quality of its financial regulatory environment and the opportunities of credit for expanding businesses. Meanwhile, Brazil saw a notable improvement in the area of labour and human capital (+12 places).
Madeleine Blankenstein, partner and IBC director at Grant Thornton Brazil, said: “Brazil offers huge opportunities for firms looking to expand, and the market is increasingly opening up for foreign investment in certain sectors such as infrastructure. The country boasts a dynamic economy with millions of skilled workers and a middle class looking to make the most of increased purchasing power.
“The country’s economy has shown resilience, and we believe the country has potential to grow. Investment incentives and changes in regulation help to boost the attractiveness of Brazil, and our international clients are cautious but optimistic about the future.”
Globally, Singapore offers the best business growth environment for dynamic businesses according to the GDI as a result of a strong financing and regulatory environment. Israel (rank 2) has also risen six places this year. Australia (rank 3=) drops two places but still ranks in the top five for business operating environment and labour market. Finland (rank 3=) and Sweden (rank 5) have both risen slightly, due to favourable business operating environments and an advanced technology infrastructure.
Perception vs reality
Further analysis shows that Brazil’s positive aspects are reflected in the views of international investors. According to Grant Thornton’s International Business Report (IBR) survey, 57% of firms expanding into Brazil do so because they view it as a ‘key market’. Meanwhile, the availability of skilled workers is a draw for 40% of foreign firms operating in Brazil.
However, international businesses are also aware of the potential barriers to doing business in the country. Companies operating in Brazil or looking to expand there are likely to cite financial risk and uncertainty (43%) and linguistic barriers (38%) as two of the main hurdles.
Madeleine Blankenstein added: “In a globalised world, businesses looking for opportunities in dynamic markets must consider a range of economic, social and political factors when making decisions. They must balance instinct with reason, perception with reality.
“Brazil provides attractive opportunities in an expanding market, and many investors recognise this opportunity. Businesses clearly feel that there are numerous advantages to doing business in Brazil that might not be fully captured by official data. However, as advisors to dynamic businesses, it’s our job to make sure firms have the full facts at their disposal when making key decisions.
“The business world is always changing, with the realities on the ground often surprising business leaders who take a closer look. In order to maximise growth potential, business leaders need to refresh their perceptions of foreign markets in line with the market insights at their disposal. Once in tandem, better decisions can be made.”
