Doing Business in Brazil

1. Doing Business in Brazil • Acme Manufacturing Company • Auburn Hills • MI • USA

2. The official language is Portuguese Brazilian’s do not perceive themselves as Hispanics and don’t like to be called Latinos A strong personal relationship is important to closing deals and to build a partnership. Brazilian’s are always skeptical. Brazilian’s have an attraction for risk, but are cautious. They are reluctant with new methods and processes. Brazilian’s are very emotional and transfer it to the negotiation table Face-to-face negotiations are important to closing a deal Promotional material or other documents should be in Portuguese and English References are important It is not advisable to initiate a meeting going straight to the point. This is can be perceived as being rude! Price and Contract Negotiations • Acme Manufacturing Company • Auburn Hills • MI • USA

3. Brazilian’s tend to mistrust people who appear unwilling to spend the necessary time for relationship building Brazilian’s may expect you to value people and relationships more strongly than your business objectives The primary negotiation style is competitive and Brazilian’s can be very aggressive negotiators Expect negotiations to be slow and protracted. Brazilian's don’t hurry and don’t like people who do. Be prepared to make several trips if necessary to achieve your objectives Patience and persistence are very important When submitting prices, keep sufficient room for concessions If your proposal needs them to support a risky decision, you need to find ways of making them feel comfortable such as offering additional guarantees and warranties. Price and Contract Negotiations • Acme Manufacturing Company • Auburn Hills • MI • USA

4. Having a local working directly for you or having a representative is extremely important for your success. Additionally, you can also set up a business or commercial office. A large number of foreign companies trying to enter the Brazilian market never manage to get a single product across the border to Brazil. Their lack of success is often directly related to their lack of focus and understanding of local behavior. Assuming your pricing is competitive, you need to be aware of added costs for doing business in Brazil: Import taxes to Brazil Non-refundable sales tax Industry average commission mark-up for Brazil You need to be aware of taxation for your product, which can vary in the different states of Brazil Sao Paolo is the state with the highest taxation and is a good base to use Viability study should be performed. Non-financial aspects: Are there any import restrictions on my product in Brazil? Are my conditions competitive? Sales and Distributor Channels • Acme Manufacturing Company • Auburn Hills • MI • USA

5. Finding out competitors pricing is helpful Brazilian's expect discounts especially when clients make up-front payments Brazilian's evaluate your value propositions with using the following attributes: Durability Reduced maintenance cost Simplicity How do you promote your company? Trade shows such as FEIMAFE, MACANICA - Brazilian Machinery Trade Fair E-mail is not a preferred way to introduce yourself. Pick up the phone and then buy a plane ticket. Face-to-face is important to establish a level of personal confidence before you have any agreements Brazilian buyers do not like issuing letters of credit Sales and Distributor Channels • Acme Manufacturing Company • Auburn Hills • MI • USA

6. Agent Commission Structures Since our equipment is generally custom, you need to work with someone who is very familiar with your technology. Otherwise you are wasting your time. Normal commissions are 2 to 5% and are negotiable with the final machine price • Acme Manufacturing Company • Auburn Hills • MI • USA

7. Brazil has been by far the best market for us over the past two years and we expect this to continue for the next several years 2014 World Cup 2016 Olympics - Rio de Janeiro If you aren't willing to invest the time to go face-to-face and develop a relationship – stay home! Conclusion: • Acme Manufacturing Company • Auburn Hills • MI • USA