Business in Brazil

Hello everyone,

Seeing as we are here in Brazil to start a business, I thought I would share how far we have gotten the past two months.

First, here's a bit of background.  Shaun and I have been interested in Brazil for years.  We originally hoped to come down and do some sort of mission aid work, but Shaun ended up hearing about a lead on the coco-peat industry.  I like to call Shaun a visionary.  Fortunately, unlike some people who only see the big picture and dream all the time, Shaun likes to make things happen as well.  He loves business, economics, and studies these topics continually (I have to admit it is sometimes hard to appear remain interested).  If anyone follows economics, there is a lot of talk right now about Brazil's rapid economic growth.  In the northeast there are lots of opportunities, but not as many people who have experience running businesses.  There is also lots of unemployment.  We are hoping to start this business and use it to help the community as well.  Anyways, our hope was to be down here last January. Obviously, things have slightly changed, and it has been hard to remain patient.  My general feeling over the last two months is that our lessons in patience are not going to end soon.

Prior to our arrival, our Brazilian administrator submitted all our paperwork to the bank to open up a bank account for the business.  The business was already registered, and we needed the account to deposit the money to apply for investment visas.  The bank informed Hermes that to open a bank account should not be a problem.

Here's a summary of our time here thus far:

Day 1-7 - Carnival

Day 8 - business meeting

Day 9 - business meeting

Day 12 - Where's the bank account?

Shaun had more meetings interspersed.

Day 20 - Where's the bank account? "Oh, the paperwork is in Recife, we should have it open in no time."

Day 30 - Where's the bank account? (does everyone get my point here yet?)

Day 35 - Where's the bank account? (FORTY days after we submitted our paperwork). "Oh, sorry sir, you do not have the right paperwork from the federal police to show you are allowed in the country!"

Shaun's lawyers had told him it was difficult to open a bank account.  However, because they were saying it could be done, and the bank we had originally applied with (which is a large Brazilian bank) said we had the right paperwork (on their website as well), we had just waited...and waited....and waited.

Not understanding this turn of events, we applied at two more banks.  One took 3 days to say it was not possible, the other took 2 hours.  The paperwork we needed was a Foreigner's Identity Card.  You can't get one of these cards unless you at least have a 12 month visa.  Not a Tourist Visa.

We were stumped.  There is a possibility of an investment visa.  But how to get money here into our very own company!?!?!?!?!?!

Finally we checked out some more internet sites.  And on two other banks' websites we were told that a foreigner without a permanent or temporary visa could open a business account with 4 things:

1) articles of association

2) CNPJ (business number)

3) Brazilian with our Power of Attorney

4) Resident Card of the business' legal representation

So Simple.

Now you may think this could all have been prevented.  Maybe yes, maybe no.  But I like to think of it as a learning opportunity regarding doing business in Brazil.  And we get to learn it before we've even started.  Some important notes to take if you are planning to start a business here:

1) Never expect a straight answer.  Always second guess.

2) We learned forums are often full of information (however watch out for mis-information or dated information.)

3) Things take a long time.

4) Things take a long time (and really this was only the first two months, which in the whole scheme of things is not very long.  I think it just seemed really long because we've already been waiting for two years.

So around two weeks ago, we got to the point of wondering if it was worth it.  Many Brazilians we talk to caution us that it will not get better.  Things will always remain slow.  A foreign friend of our neighbour, when he heard about us, said that we would never do business in Brazil, as he had tried and there was too much red tape.  So it was a low point.  

It's so easy to get sucked into emotions and not know if you are thinking logically or if you are only using emotions.  And it is harder if you start to read up on cultural adaptation and all that jazz, because just like a marriage (or some marriages, I should say), there's a honeymoon period, and then a "what have I done?" period, and then a period where you can accept the pros and cons of a culture.  So are we questioning just based on emotions, or are we realistically wondering if we can handle the different business landscape here?

We went out for drinks with Sandro and Djane and our friend Luiz I think the next night, and of course they convinced us that we needed to keep-on-keeping-on.  One of the great things about Brazilian culture.  And now that I think of it, we spent a lot of time discussing the pros and cons of each culture in a energetic, sometimes heated way, which was really fun.  And the band kept playing a song: Sempre Em Frente.  I guess that is now our new motto.  So for now, we keep doing what we're doing.  Shaun is confident that the bank account can now be opened no problem next week, so we will take one day at a time and see where that leads.  He also feels like once we actually have the equipment in hand to produce the peat, how can anyone stop us?  

In the meantime, we only have 3 1/2 weeks left here, if you can believe it.  And we'll keep you posted if anything else develops.

Talk to you soon,

Brenda