Useful Information about Brazil
Index to Useful Information about Brazil
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The following information is compiled to the best of our knowledge and in good faith. E&OE.
General
Overview
Brazil is South America's biggest and most influential country accumulating almost half the continent. It is one of the world's economic giants and is revered for its football prowess, coffee production and distinctive music such as samba and bosanova.
Two-thirds of Brazil's population live close to the coast, therefore boasting great integration of locals and tourists. Brazil is home to a multitude of ethnic groups of varying economic status; there are some characteristics that everyone shares - energy and passion. It is not all reserved for football either; Brazilians enjoy a good party whatever the circumstances!
Although there are festivals taking place all year round in Brazil, the country's most famous event is a carnival, which lasts for five days from the Friday to the Tuesday falling after Ash Wednesday. It is celebrated all over Brazil and there are authentic versions as well as the glitzy tourist draw-card held in Rio. In its sambódromo, a tiered street designed for samba parades; there is a frenzy of sequins, dancing, fun and mayhem as the 16 top samba schools each have their hour of glory. Dancers gyrate, the music beats and the summer temperature rises.
People of all ages, cultures and ethnicity don the very minimum in beachwear and idle away the days on the tropical sun-kissed beaches. Volleyball and swimming are a few of the activities in which you can indulge. Brazil's landscape is as diverse as the people who inhabit it.
Few tourists venture far from Brazil's spectacular beaches however a trip inland reveals a different way of living altogether. Almost entirely covered with dense rain forest, Brazil's northern interior is split into the vast regions of Amazonas, Pará, Acre and Rondônia. These immense federal states easily outstrip the land resources of many European countries and cover over 3,400,000 sq km (1,300,000 sq miles) of endless jungle, home to lush vegetation and countless species of life. Brazil's vast assortment of people and places offers something for everyone of any age or interest.
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History
The Portuguese navigator Pedro Alvares Cabral discovered Brazil in 1500. He first set foot on Brazilian soil in Bahia on the beach today called Cabrá near Porto Seguro.From then on, various export cycles have dominated Brazil's economic development and consequently cultural development.
The First of these cycles was based on the exportation of Brazil-wood, used to make dyes and paints. During the 17th century, Brazil became the world's largest producer of sugar. In this period, a large number of African slaves were brought to Brazil to work in the sugar cane plantations. Gold and diamonds eventually replaced sugar as the country's major export product. By the second half of the 19th century, Brazil was deep into a new cycle with coffee as the major export. Today, coffee is still one of Brazil's major sources of income. The late 19th-century rubber boom also brought prosperity and development to the north of Brazil, previously ignored by the international economy.
When Napoleon invaded Portugal in the early 1800's, Dom João VI, King of Portugal, fled to Brazil where the Portuguese court continued to run the empire. Ports were opened to international (mostly British) commerce, and the colony grew substantially. In 1789, one of Brazil's first movements for independence from Portugal was crushed. Its hero, Tiradentes, became a national symbol of liberty. Independence was finally proclaimed by Dom Pedro I (Dom João's son) in 1822. He became Brazil's first Emperor. His son, Dom Pedro II, reigned for 49 years until 1899 when the country becomes a Republic. In 1888, slavery was abolished.
In 1940 Brazil began a new phase characterized by industrial development. At the same time, agricultural technology advances giving further impetus to the industrial surge and accelerating financial expansion. In spite of a large and ever growing internal domestic market, Brazil continues to be a major exporter of agricultural products as well as manufactured items such as heavy machinery, shoes and steel products.
From 1956 to 1960, Brazil experienced five years of high economic growth under President Juscelino Kubitschek. In 1960, crowning his endeavour, the futuristic city of Brasilia was inaugurated as the new capital city.
From 1964 to 1985, Brazil, like many other Latin American countries, was under the rule of military leaders. It was the time of the so called "cold war" between the United States and the Soviet Union. Between 1964 and 1990 there were no popular elections for President. In the late 1970s the country gradually returned to democratic rule. In 1982, direct elections were held for state governorships for the first time since 1965, and in 1990 direct presidential elections took place.
Today, Brazil is a vibrant democracy. The current President, Luís Inácio Lula da Silva, took office in January, 2003. The economy of Brazil has thrived since he took over leadership.
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Geography & Climate
Brazil is the world's fifth-largest country, occupying almost half the South American continent and bordering almost every surrounding country. Much of Brazil is scarcely populated, although some regions with previously low population densities, such as the Amazon, are being rapidly settled, logged and depleted.
Brazil can be divided into four major geographic regions. The long, narrow Atlantic seaboard has coastal ranges between the Rio Grande do Sul and Bahia, but is flatter north of Bahia. The large highlands called the Planalto Brasileiro, or central plateau, extend over most of inland Brazil.
Most of the country has noticeable seasonal variations in rain, temperature and humidity, but only the south of Brazil has large seasonal changes. The Brazilian winter is from June to August, with the coldest southern states receiving average winter temperatures of between 13°C and 18°C (55°F and 64°F). In summer (December to February), Rio is hot and humid, with temperatures in the high 30°C (80°F). Temperatures usually hover around 25°C (77°F) for the rest of the year. The northeast coast becomes as hot as Rio in the summer but tropical breezes make it less humid. In general, the Planalto Brasiliero is cooler, and is prone to summer rainfalls. The Amazon Basin is the wettest part of Brazil, and while it is humid, temperatures average a reasonable 27°C (80°F).
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Culture & People
Brazil's population is made up of a mixture of Native American, European, and African people, which gives rise to an ethnic society in Brazil. The Portuguese had arrived in 1500, while other European groups came after 1850 and the ancestors of African Brazilians arrived as slaves, in the beginning of mid-1500s. This is how Brazil got its unique ethnic background. The Native American population, however, who has been in Brazil for a very long time, is today present in a very small group.
The ethic mix of cultures of all the three races - American, European and Brazil gives the country a unique cultural heritage. However, Portuguese culture still manages to influence Brazil. The country also has a strong folk-art tradition, a mixture of the art of Native Americans, Africans, and Portuguese. Brazil also has an affiliation towards poetry and has seen the birth of many poets. Besides this, painting and pottery also form part of Brazil's artistic culture. Music has always been a part of every Brazilian's life, the most popular being Samba which is a result of the blending of rhythm and vocal styles of the Native Americans, Portuguese, and Africans.
Brazilians are also noted for their love of football motor racing and not least of all, Carnival!
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Brazil for Investors
Why Brazil?
Compared to many other destinations, Brazil is still relatively under explored in terms of its real estate potential - which creates excellent opportunities for higher returns on property investments when buying properties in Brazil.
The country has recently experienced a big boost in its popularity abroad, helped by its robust economic performance and a more active role in the international arena. Its image is frequently associated with a casual and healthy lifestyle, friendly people, and a beautiful combination of rain-forest, mountains and sea. As a consequence, tourism inflows have increased dramatically over the past few years and international property investors are quickly realizing the huge gains that can be made in this fast growing emerging market.
Most major tourism operators and hotel chains have now started to invest in large scale projects in Brazil, especially in the warm and sunny northeast coast. Practically all big names in the hospitality business such as Marriott, Club Med, Breezes, Sheraton and many others have already invested millions of dollars in exclusive developments around the country, boosting the economies of local communities and increasing the values of surrounding properties.
With almost 5,000 miles of coastline, Brazil is a prime location for oceanfront properties, and perhaps one of the safest countries - both from a geographical, climatic and political viewpoint - for a property investor looking at long-term appreciation.
Brazil has a stable and democratic government, it is self-sufficient in oil and a leader in the development of renewable energy sources, such as ethanol and bio-diesel.
Below are some key points as to why you should consider Brazil as your next investment:
- Foreigners can own 100% of land and property.
- Inexpensive real estate prices
- Vast coast line offers incredible beach-front options
- Holds 1/3 of the world's fresh water reserves
- Beautiful weather, with year-round sunshine
- High property appreciation potential
- One of the leading emerging market countries
- Extremely low risk of international terrorism and war
- Rich cultural diversity
- Incredible natural beauty
- Low cost of living
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Key Facts
- Land surface: 8,514,215 km² (the world's 5th-largest)
- Population: 182 million (the world's 5th-largest)
- Gross Domestic Product (GDP): US$ 605 billion (2004, US$ 1.00 = R$ 2.92)
- Per capita income: US$ 3,324 (2004)
- 50% of the surface area of South America
- 50% of the population of South America
- 50% of South American GDP (Mercosul - 65%)
Brazil, the United States, and China are the only countries possessing certain key factors for sustained growth:
- Surface area of over 5 million Km²
- GDP over US$ 600 billion
- Population over 180 million
- 180 million consumers
- 90 million economically active population
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The Consumer Market
Brazil is also the world’s 7th-largest consumer market:
- Brazil is the gateway to Mercosur: it has borders with 9 countries (Argentina, Bolivia, Colombia, French Guiana, Guyana, Peru, Suriname, Uruguay, and Venezuela).
- It is the world's largest producer of regional jets, it ranks 3rd in shoes and soft drinks, 4th in commercial aircraft, 8th in steel, 10th in automobiles.
- It is home to Latin America's largest forestry -based industry.
- It has the 5th-biggest rubber industry, and the 7th-largest paper and pulp industry.
- It is the world's 6th-largest market for cosmetics, with annual sales of US$ 9 billion.
- It has a modern and competitive textile complex, with 30,000 companies and annual sales of US$ 21 billion.
- It contains 22% of the world's arable land surface. It has the most advanced banking system and one of the most high-tech telecommunications systems in the world.
- In Brazil, 99% of tax returns are filed over the internet.
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Return on Investment
Return on Investment Investing in Brazil is clearly profitable. Over the last ten years the rate of return on direct foreign investment (FDI) in Brazil has been 26.4%. Moreover, there are no restrictions on remittance of profits.
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Sustained Growth
Sustained Growth Brazil's GDP (US$ 605 billion in 2004 and growing) is the 10th-largest worldwide. The country is the biggest exporter of coffee, orange juice, sugar, soybean, beef, poultry, tobacco, and iron ore. Other key factors driving sustainable growth are:
- Consistent fiscal policy
- Inflation under control
- Declining government debt
- GDP ratio; Growing industrial output.
Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets.
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Internationalisation
Internationalisation The good performance of the domestic economy had a direct influence on the increased flow of trade (exports + imports), which rose to $180.613 billion in the period from January to the first week of December 2005. This year, the flow of trade is expected to reach 30% of the country's GDP.
Brazil has emerged as a strong player in the world market, with a growing number of Brazilian companies establishing operations overseas. Their investments in South America, the United States, and Europe amounted to US$ 9.5 billion in 2004 alone. Some of the Brazilian companies with international presence are Odebrecht, Votorantin, Gerdau, Ambev, Embraco, WEG, CVRD, Petrobrás, Marcopolo, and Tigre.
* From 1994 through 2004, Brazil's outward investments in the international market jumped from US$ 700 million to US$ 9.5 billion - (an increase of 1,357%).
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Recent Developments
Recent Developments From 2001-03 real wages fell and Brazil's economy grew, on average only 2.2% per year, as the country absorbed a series of domestic and international economic shocks. That Brazil absorbed these shocks without financial collapse is a tribute to the resiliency of the Brazilian economy and the economic program put in place by former President CARDOSO and strengthened by President LULA DA SILVA.
In 2004, Brazil enjoyed more robust growth that yielded increases in employment and real wages. The three pillars of the economic program are a floating exchange rate, an inflation-targeting regime, and tight fiscal policy, all reinforced by a series of IMF programs.
The currency depreciated sharply in 2001 and 2002, which contributed to a dramatic current account adjustment; in 2003 to 2005, Brazil ran record trade surpluses and recorded its first current account surpluses since 1992.
Productivity gains - particularly in agriculture - also contributed to the surge in exports, and Brazil in 2005 surpassed the previous year's record export level.
While economic management has been good, there remain important economic vulnerabilities. The most significant are debt-related: the government's largely domestic debt increased steadily from 1994 to 2003 - straining government finances - before falling as a percentage of GDP in 2005, while Brazil's foreign debt (a mix of private and public debt) is large in relation to Brazil's small (but growing) export base.
Another challenge is maintaining economic growth over a period of time to generate employment and make the government debt burden more manageable.
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Buying in Brazil
Foreign Ownership
There are no major restrictions on overseas buyers for buying and selling residential or commercial property. There are some limitations or fees applicable for specific areas such as marine land, islands, agricultural rural land or areas near Brazil’s International borders.
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Is it safe to buy real estate in Brazil?
Yes, Brazil is a safe place to buy real estate. We recommend that as with any overseas purchase that you use an approved estate agent and lawyer. Many Americans and Europeans are now buying properties for sale in Brazil.
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How much will it cost to buy or sell a property?
On average transaction costs (i.e. stamp duty, fees etc) can be around 7% of the purchase price. This may differ on the location (egg beach-front), type of property and State you buy in. If there is a significant amount of work to establish title and ownership then these costs may be more. This budget will cover you for Government Purchase tax (2%-7%), legal and registration fees.
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Legal Matters
Legal Matters We can introduce you to English speaking lawyers to help you with your purchase.
These lawyers check the current owners have the correct title to the property. Check for any charges and liabilities on the property. Checking your contract and advise you on the obligations for both parties. Helping you through the payment/funds transfer. Ensuring the property is registered in your name.
There are generally no limitations to returning money back overseas if registered with the Central Bank at the time of your purchase.
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Can I get a mortgage?
Can I get a mortgage? The mortgage market is in its infancy in Brazil. In 2005 about 50,000 mortgages were granted however this will grow as interest rates decline and as banks develop these products. We are discussing mortgaging options with several financial institutions in Brazil. Currently foreigners cannot get mortgages. Buyers usually arrange alternative financing in their own countries.
Some Developers of new build & off-plan developments offer installment plans over a between 12 to 60 months. The charges applicable vary from developer to developer and payments are usually indexed.
If you have property in your own country and would like to borrow against this, then we can introduce you to an Independent Financial Advisor who can help you raise finance accordingly.
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Land Registration System
Real estate registration in Brazil is carried out by private notary publics, under the form of a public permission, under Justice Control. All real estate registries in Brazil are under control and fiscalization of a State Judge.
The real estate registry system in Brazil is quite developed and safe, in which each property can only be registered at a single registry, which keeps the entire commercial history and the physical identification of each property. The access to all information of a real estate, including those concerning its owners, mortgages and other burdens, is public. In the larger cities, these services this may be automated. It is very important to ensure that any property you buy has clear title.
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Code of Ethics
Code of Ethics The Real Estate Agents Law imposes a Code of Ethics over all professionals and companies operating in the segment. There are internal disciplinary processes, with sanctions ranging from fines to violator’s license suspension and cancellation. Sanctions are imposed by COFECI, through the CRECIs.
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Licensing Requirements
Licensing Requirements All real estate agencies must have a fully qualified real estate agent partner who is technically responsible. To close a sale, it is necessary that a public deed is drafted by the notary public, and it is registered by the real estate registrar. The sales can be entered into directly between sellers and purchasers, but in case of intermediation such activity can only be carried out by real estate agents or agencies accredited by the CRECIs. Lawyers are not mandatory, but they can represent any of the parties as attorneys-in-fact.
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Inspection Visits
Inspection visits If schedules allow, it is best to visit the area that you are looking to invest in, we welcome enquiries from independent travelers, however, we can offer great value for money and comprehensive inspection visits to North Brazil. Contact us for further information.
We can arrange;
- Airport transfers from Recife, Natal or Joao Pessoa airports.
- Accommodation for up to 7 nights in either our own luxury 2 bedroom apartments at Cabo Branco or at a beach front hotel.
- Accompanied visits to all investment opportunities that may be suitable.
- Sightseeing tours of the area, including the City Tour, a boat trip, North or South Beach trip.
- An introductory session with a local English speaking independent lawyer.
- We will be happy to assist in arranging flights from USA / Europe.
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Our links with Brazil continue to flourish as can be seen from our wide selection of Brazil Property for sale. Our properties range from plots of land to luxury condo apartments; we are even selling a beach front hotel with adjoining land on the North East Coast which is an exciting opportunity. See our range of Brazil Apartments and Brazil Villas or maybe you are interested in buying a piece of Brazil Land. |
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