Brazil Market Access

Import regulations and customs duties

Regulations
Despite a certain trade liberalisation over the last few years, especially in terms of customs duties, it is extremely difficult to export towards the Brazilian market. Import licensing rules are very tough. The import of most of the products implies issuing a preliminary a licence at the SECEX (Secretariat of Foreign trade), which is the only organisation authorised to issue this licence. However the list of the products subject to this preliminary licence is not publicise. It is available only with registered and authorised users.
There is a minimal price procedure raising a problem when issuing these licences. When a licence is applied for, a proforma invoice has to be supplied. If the declared prices are lower than the minimum price used for calculation of the customs duties, the licence is not issued by the authorities, and no formal information is given to the applicant. The importer is then generally informed unofficially about the existence of this minimum price.

These licenses are valid for 60 days starting from the date of dispatch of the goods (sometimes, it starts from the date of applying for the license). This period is often insufficient. It is then necessary to apply for a new licence. For textiles, rules are even more strict. The license is granted only if the payment is effective within 30 days from the date of B/L. Importers compulsorily have to prove that they effectively made the payment within 30 days.

The imported goods are often blocked in customs because of documentary problems. All the imports should be accompanied at least with 2 copies of the commercial invoice and the B/L. If they do not match the legal requirements of the country, Customs are entitled to levy heavy fines, which may go even up to 100% of the usual customs duties. It is therefore advisable to work through a very good broker in Brazilian customs, who is able to get the information on time about the appropriate customs rules.

The import of second-hand industrial material is authorised under restricted conditions, as long as these goods are not produced locally and can not be replaced by some local material. The age of the material should be lower than the life expectancy estimated for the product in Brazil.

Regulations governing payments
There are no more controls nor limitations of the exchanges since 1990.

Distribution

The main industrial and commercial areas of the country are located in the triangle of Sao Paulo, Rio de Janeiro and Belo Horizonte. The other important zones in terms of economy are located near Salvador, Curitiba, Florianopolis, Porto Alegre and Recife.

Because of the particularities of the Brazilian market, it is advisable to start any commercial transaction with the help of an agent or a distributor. Considering the size of the country, a single agent cannot cover the total territory. Indeed, in spite of the considerable improvements in terms of transport and internal communications, the regional orientation of the economy continues to be huge. Depending on the company objectives, it is better to have at least one agent in both of the main centres of activity, that is to say Rio and Sao Paulo. Agency and representation agreements are regulated by the law of December 10, 1965.

The Business to Consumer (B to C) market

With trade liberalisation that began in Brazil in 1990, various agents and distributors established themselves as independent businesses and began to sell their services. Today, a majority of the big retailing chains have their own import agencies.

In the recent years, department stores and more particularly the hypermarkets, got bigger and bigger in the distribution circle. Nowadays, the Brazilian supermarkets handle 80 % of the sales of goods of basic necessity.

The first three retailing chains in the ascending order are: Carrefour, Pao de Açucar and Sendas. Others such as Bompreço and Paes Mendoça are also very important.

It is necessary to take into account, when approaching the Brazilian market, that food and accommodation are the main requirements and that one third of the population lives below the poverty line.

The Business to Business (B to B) market

Nowadays, Brazil is one of the biggest emerging markets in the world . The process of financial evolution began in 1994 which facilitated business conditions and made possible an increase of FDI (foreign direct investments)

Transportation of goods

By road
In practice, all the State capitals are connected by tarred roads. São Paulo, Rio de Janeiro and some other important States dispose of freeways. The road network and highways approximately cover 1.5 million kilometres, of which about 160,000 km are tarred. This is an increase of more than 300% over the last two decades. Road transport is the main means, as it is used for the transportation of about 85% of the Brazilian population and products. Recently, the management of several highways was passed on to the private sector.

By rail
This network is small as compared to the size of the country. It extends over 30,000 km (mainly in the South East States) of which only 7 % is electrified. It carries 22.5% of the goods traffic. It is managed by the Rede Ferroviaria Federal (RFFSA). At the moment, big projects, including a high-speed train between Rio de Janeiro and Sao Paulo are coming up.

By sea
17 % of the internal transport is handled by sea or river route; the sea traffic plays a major role in the international transport of the goods, because it transports 97% of the Brazilian exports. Some 350 million tons of goods are transported this way every year.

The main ports are: Rio de Janeiro, Santos, Paranagua, Porto Alegre, Recife, Salvador, Vitoria, Santos (port of Sao Paulo) Tubarao, Itaqui, Sao Sebastiao and Manaus's river bridge.

By air
There are 62 airports in Brazil, of which 40 are international and 22 domestic. The main ones are Rio de Janeiro (Galeo) and Sao Paulo (Guarulhos and Congonhas). The national airline is VARIG, and covers a major part of the international flights. The internal lines are covered by 3 companies: VASP, VARIG and TAM.

Standards

Conselho de Metrologia, Normalizaçao e Qualidade Industrial (CONMETRO), is is part of the Department of Trade and Industry and is responsible for the implementation of Brazilian standards and certificates.

The National institute of Metrology ( INMETRO) is in charge of the implementation of the CONMETRO directives. Though the standards are generally formulated by the Associaçao Brasileira of the Technical Standards (ABTN), some of them are formulated by the concerned ministries.

Patents and brands

The organisation in charge of the protection of patents and trademarks in Brazil is the INPI (Instituto Nacional Industrial da Propriedad).

Brazil adhered to the Convention of Paris for the protection of industrial property and to the agreement established by the World Organization of Intellectual Property.