As Brazil works to enhance its public infrastructure and services for the middle class in advance of the 2014 FIFA World Cup and 2016 Summer Olympics, Maryland companies look for business opportunities amid the South American nation’s burgeoning economy.
At the same time, Gov. Martin O’Malley (D) and the state are weighing a potential trade mission to Brazil this fall.
More than 100 people attended the “Doing Business in Brazil” forum Tuesday at the John Hopkins University Montgomery County Campus in Rockville. Besides the university, the forum was sponsored by the Montgomery County Chamber of Commerce, Montgomery County Department of Economic Development, Maryland Department of Business and Economic Development and U.S. Department of Commerce.
Representatives from several Maryland businesses working with Brazil and Brazilian officials offered advice to executives.
Some tips included setting up official business entities in Brazil, understanding differences in how the human resource system operates and navigating the complex tax system that changes frequently and is not connected across all levels of government, said Parag Sheth of High Street Partners in Annapolis.
Sheth is the director of mid-Atlantic business development for the company, which helps companies simplify overseas expansion through managing monthly onsite operations for businesses and helping them set up bank accounts and employment agreements.
Sheth emphasized the importance of issuing contract offer letters that reflect the local Brazilian jurisdiction instead of using U.S. letterheads. He said such gestures, which should include terms in Brazilian currency, or real, show local companies that U.S. businesses care about their culture.
He also cautioned businesses that the term “contractor” in Brazil does not mean someone merely hired for a job, as Brazilian businesses consider anyone hired to do work the same as an employee.
High Street Partners has worked in Brazil for 10 years.
With most Brazilians now in the middle class, businesses have more opportunity to provide services and products, Sheth said. Preparing for the World Cup and Olympics also presents opportunities for businesses that provide infrastructure, he said.
Brazil has the world’s eighth-largest economy and grew its gross domestic product 1.3 percent last year to $2.4 trillion, according to the Central Intelligence Agency’s World Factbook. Maryland ranked Brazil as its 11th-largest trading partner in 2011, with a 40 percent increase over 2010, according to DBED. Major export commodities include aircraft, optics, machinery, chemical products and electric machinery.
“The key point for successful business in Brazil is to have a partner onsite and devise strategies together to overcome possible obstacles,” Ana M. Vargas, medical director for TruBios Clinical Trials in Rockville, wrote in an email to The Gazette. TruBios CEO Roberto Trujillo moderated the Hopkins forum.
TruBios provides access to the technologies, markets, people and governments of Latin America for life science businesses.
Aside from the hospitality opportunities surrounding the sports events, speakers at the event also stressed Brazilians’ renewed interest in traveling around their own country, which could spur the need for more affordable hotels, said Barbara Ashe, executive vice president of the Montgomery County chamber.
She said the forum also was tied into O’Malley’s trade mission to Brazil in fall, but she said no dates have been set. Montgomery County’s economic development department also referenced the mission, and the event’s agenda included time for executives to discuss the trade mission with state officials.
But Karen Glenn Hood, a spokeswoman for DBED, said O’Malley has no confirmed plans for a trade mission, although he previously said he would consider one to Brazil.
“We want to be sure our companies are aware of the trade mission and grants available to support companies with a serious interest in selling internationally competitive services and products in Brazil,” said Adrienne Van Lare, international business development specialist for Montgomery County.
She added that the county wants to “arm” companies with a realistic idea of the challenges they might face in international trade.
For Joana Rosario, a principal with strategic research development company J. Rosario et Al at the Shady Grove Innovation Center, the event was more about learning who else was interested in her area. Rosario has worked in Brazil in various capacities since 1990, although her business is new.
“It was about meeting people I haven’t met before,” Rosario said.