Taxation & Bureaucracy: Whether you are an investor, and especially if you are an entrepreneur, this is no doubt a major downside and one of the more challenging aspects of doing business in Brazil.
The Brazilian tax system is heavy, hugely cumbersome, and at times very unclear, resulting in unknown liabilities.
Labor costs are very high both on hiring and firing, and the legislation is inflexible and hardly supportive of entrepreneurship.
Take for example a recent decision by a major multinational company to block email distribution to its workforce in non-working hours and on vacations, after having lost a an ‘overtime’ labor suit for this reason.
Imagine the potential liabilities, and restrictions to productivity, of such a legal decision(!)
Brazil is laden with these ‘mines’ and unfortunately considerable time has to be spent dealing with bureaucracy rather than building great businesses.
This ends Part I, and to sum-up: Brazil’s potential is massive. At the same time, the current challenges and shortcomings must be embraced and tackled one-by-one, both on the individual level of each start-up, and as a community as a whole.
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