Brazil Guide
Profile
Brazil is the largest country in South America and the fifth largest country in the world after Russia, Canada, China, and the United States. It was a Portuguese colony from the landing of Pedro Alvares Cabral in 1500 until 1815 when it became a united kingdom with Portugal. In 1822 the country became independent as the Brazilian Empire, but has been a republic since 1889. Due to its origin, it is the only Portuguese-speaking country in South America.
Brazil occupies a large area along the eastern coast of South America and includes much of the continent's interior, sharing land borders with Uruguay to the South; Argentina and Paraguay to the Southwest; Bolivia and Peru to the West; Colombia to the Northwest; and Venezuela, Suriname, Guyana and French Guiana to the North. It shares a border with every country in South America except for Ecuador and Chile. It also encompasses a number of oceanic archipelagos, such as Fernando de Noronha, Rocas Atoll, Saint Peter and Paul Rocks, and Trindade and Martim Vaz.
Its size, relief, climate, and natural resources make Brazil geographically diverse. It spans three time zones; from UTC-4 in the western states, to UTC-3 in the eastern states (and the official time of Brazil), and UTC-2 in the Atlantic islands. Brazilian topography is also diverse and includes includes hills, mountains, plains, highlands, and scrublands. Within this topographical diversity, one can find magnificent snow-capped mountains, rainbow waterfalls, and lush tropical rainforests.
Brazil is also a country that's famous for its beaches, which embody almost 5,000 miles of pristine coastline with majestic white, gold, and rose colored sands touched by crystal clear waters. The beaches of Brazil are among the most beautiful in the world, with the country's Northeast region of Ceara known to hold the greatest appeal. Getting from one beach village to the next is quick and easy by beach buggy, a preferred mode of local transportation and among the unique samples of popular outdoor pursuits for visitors. Small, upscale boutique hotels and beachfront resorts further cater to adventure seekers or those opting to simply soak up the sun.
Fueled by foreign investment, a booming tourism industry and a growing domestic middle class, the northeast of Brazil has become a real estate hotspot and a popular destination for retirees from southern Brazil, Europe and recently North America. Brazil's continued emergence on the world stage is underscored by having Fortaleza named as a host city for the 2014 World Cup, and Rio de Janeiro as host for the 2016 Olympic Games.
Weather
The climate of Brazil comprises a wide range of weather conditions across a large area and varied topography. Most of the country is tropical but different climatic conditions produce environments ranging from equatorial rainforests to semiarid deserts and tropical savannas. An equatorial climate characterizes much of northern Brazil. There is no real dry season, but there are some variations in rain fall throughout the year. Temperatures average 77 F (25 C); Over central Brazil rainfall is more seasonal, characteristic of a savanna climate; The south enjoys temperate conditions, cool winters with occasional snowfall and average annual temperatures of 64 F (18 C). Brazil Weather >>
Economy
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. Brazil currently ranks as the world's tenth largest economy, according to recent estimates from the InternationalMonetary Fund and the World Bank.
During the mid-2000s, productivity gains coupled with high commodity prices contributed to a surge in Brazilian exports. Major export products include aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, iron ore, steel, coffee, orange juice, soybeans and corned beef. The country has been expanding its presence in international financial and commodities markets.
Once hobbled with high inflation and perennially susceptible to worldwide crises, Brazil enters 2010 with a flourishing consumer market, investment-grade status for its sovereign debt, vast foreign reserves approaching $300 billion, and an agricultural sector that is vying to supplant that of the United States as the world's most productive.
Grouped together among four emerging economies known as the BRIC countries, Brazil's GDP, estimated at $1.3 trillion is the largest in Latin America and greater than those of India and Russia. Recent discoveries by Brazil's state oil company are expected to make the country one of the world's biggest crude producers. An unwieldy bureaucracy and red tape have not slowed foreign investment, which at $45 billion in 2008 is three times as much as it was a decade ago.
Brazil's President Luiz Inacio Lula da Silva has made ending poverty a priority of his policy and through the development of a trade-oriented economy and innovative government sponsored programs, has been a catalyst in the country's economic growth and rising middle class. Brazil's economy is emerged from a brief recession in 2009 that also saw foreign direct investment drop significantly. The economy has been expanding by around 5% in recent years and expectations within the financial community are for continued growth of 6% during 2010.
"We were one of the last countries to go into the global crisis and we have been one of the first to come out," according to Brazil's president.
Tourism
Tourism in Brazil is a growing sector and key to the economy of several regions of the country. The country had 5.2 million visitors in 2008 and ranks as the main tourist destination in South America, and second in Latin America after Mexico, in terms of the international tourist arrivals.
Brazil offers for both domestic and international tourists a variety of options. Visitors can combine ecotourism with leisure and recreation, beach sports and adventure travel, as well as historic and cultural tourism. Among the most popular destinations are the Amazon Rainforest, beaches and dunes in the Northeast Region, the Pantanal in the Center-West Region, beaches at Rio de Janeiro and Santa Catarina, cultural and historic tourism in Minas Gerais, and business trips to Sao Paulo city.
The climate in northeastern Brazil is very sunny with a refreshing tropical sea breeze. Compared to many other tropical destinations where the air can have levels of humidity, the climate in the Northeast of Brazil is dry and more comfortable.
Tourism promotion is a top priority in the Ministry of Tourism's agenda and the National Tourism Plan has been an ongoing success. Brazil has seen a more than 75% increase in foreign tourism between 2002 and 2008 as a direct result of the National Tourism Plan.
When Brazilians plan their holidays they don't have to look any further than their own border and they usually head to the northeast of Brazil (because of the climate). Along with economic growth and increased spending powers of the Brazilian population, this market should continue to accelerate and have a positive impact on coastal property prices.
Land of Opportunity
 Brazil is gaining interest from the international community for its low cost of living, a mild, temperate climate and affordable real estate.
The Brazilian economy keeps on improving at a steady rate, and Brazil as a country likewise keeps on improving in international ratings. According to the Global Competitiveness Report 2009, Brazil now occupies 56th place in the ranking of 133 countries, outpacing its fellow BRIC member countries from the previous year. Some of the main reasons for Brazil's improving ranking are growth in Brazilian domestic consumption, control of inflation, market size, and improving business environment.
The rental potential for Brazilian properties is exceptionally solid, particularly for the domestic market. Brazil is a big country with a population of approximately 192 million. The economy is growing fast and the spending power of consumers should increase in-kind. The northeast of Brazil is also a quickly growing holiday destination for Brazilians and will likely become one of the leading tourist destinations in the world, benefitting from both a pre- and post-World Cup effect in 2014.
What does this mean to visitors and potential investors?
Brazil property is the highest rated of all property in South America, and is increasingly gaining a reputation for also being the best international investment property for sale. Building and construction costs for Brazil property are low compared with much of the developed world, and real estate in Brazil offers unique investment opportunities for investors who want to benefit from the capital growth and rental returns that are possible.
“If you look at all of the facts, I don't think there is a better environment in all the world than Brazil.” —Samuel Zell
In 2004 Brazil targeted 2,000 miles of its costal area for development with the "Grow Northeast" program. The Fortaleza area alone, already the fastest growing area for tourism, will be receiving $4.5 billion. In preparation for the 13 million annual visitors that are expected, Fortaleza's International Airport will be expanded, upgrades will be made to the roads, telecommunications systems, public transportation, and health care facilities.
In the past, popular cities like Paris or Barcelona have benefitted considerably from hosting the World Cup. This event will help put Fortaleza and the nearby northeastern cities on the world map. In certain areas of these host cities real estate values more than doubled during the years preceding the event. A city like Fortaleza, who's real estate ceiling has never been approached, may expect at least that much increased value.
Due to a lack of available housing for the Brazilians, some 20% of the population lacks adequate housing. The current development of new mortgage laws will make home ownership a more affordable option for much of the population, and help accommodate foreign investor demand. A new Brazilian mortgage product for foreigners is expected to be delivered sometime during 2010.
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Selling Points
Brazil is one of the four largest developing economies in the world (the three others being China, India and Russia) with annual GDP growth of approximately 6%. According to Goldman Sachs, by 2050 Brazil will be the world's fifth largest economy.
At of the end of 2009, the exchange rate of the Brazilian real to the U.S. dollar was favorable for foreign investors, where one U.S. dollar was valued at 1.76 Brazilian reals. In the past, the Brazilian currency was artificially linked 1:1 to the dollar, and most real estate prices in Brazil today still reflect the older price levels. But the real has been continuing to gain on the dollar in recent years and this trend is expected to continue in the future, thereby increasing the value of real-denominated investments against the dollar.
Historically, banks in Brazil were not legally able to repossess property for defaulted mortgages, thus virtually no banks lent money for real estate purchases. The law has since changed and now the Brazilian mortgage market is growing. Currently, total mortgage values represent only 2% of the Brazilian GDP; however the Brazilian government expects the mortgage market to grow 600% by 2014, with total mortgage values reaching 12% of GDP, and aidng the increase in the value of Brazilian real estate.
Compared to most other destinations, building costs are low in Brazil. This represents excellent opportunities for property investors as this translates to much lower purchase prices for the property investor. Along with economic growth, building costs are set to increase in the future. There are no restrictions imposed by the government on foreigners buying property in Brazil; property ownership is 100% freehold and secure.
The northeast of Brazil will benefit from massive investments along the coastline. In the next five years, billions will be invested in hotels, resorts and golf courses. Flight times to the region are a manageable six to nine hours from most European cities and more and more operators are extending service to Brazilian cities making it much more accessible to international travelers.
Business Opportunities
Brazil offers a variety of business opportunities, and notably, as host of the 2014 World Cup and 2016 Olympics, the government has earmarked billions in funding new infrastructure and extensive commercial development to coincide with the tourism growth. Besides the lucrative tax saving advantages, there is great demand for foreign business entry to serve the local and flourishing international markets. We know Brazil and are very well connected with reliable sources in numerous industries. We can assist you to establish or extend your business operations and guide you through the entry process. Contact us today to see how we can assist you to get started.. Learn more... Brazil Business >>
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