Relationships between America And Brazil is taking place through a series of initiatives on trade and investment issues.
In 2011, the United States and Brazil signed a Trade and Economic Cooperation Agreement to promote bilateral trade and investment relations between the two major economies. Since then, the agreement has broadened and deepened this relationship, including facilitating innovation and business transactions.
Therefore, the figures for the first half of 2022 marked a new record of US$ 42.7 billion in trade in goods between Brazil and the United States, representing an increase of 43.2% over the same period in 2021.
However, in the first half of 2022, in the entire historical series, Brazil recorded its largest deficit with the United States, amounting to US$ 7.4 billion. This is the country’s largest decline in 2022 relative to any trading partner. (Source: AMCHAM)
This poor performance derives in large part from the increase in international prices for energy and food products, the biggest impact of which is due to the war in Ukraine, affecting the performance of key products of bilateral trade such as oil and derivatives, fertilizers. Chemical inputs and so on.
In this way, the situation of rising international prices and the bilateral results already recorded in the first semester, forecasts indicate a high probability of a record value in bilateral trade for 2022, with a significant growth in imports. and, to a lesser extent, exports.
More than a decade after the signing of the agreement, the evolution of bilateral trade between the two countries shows excellent results, resuming its growth, mainly since 2018, the resumption of good relations between the countries, bringing encouraging numbers.
The 31.9% growth in exports from Brazil to the US in the first half outpaced the 20.5% increase in total Brazilian exports. There was a 52.4% increase in Brazilian purchases from the US, almost doubling the 30.9% increase in total imports from Brazil during the semester, with the US having the highest growth in average values of daily exports. and imports among Brazil’s ten major trading partners.
Thus, the United States continues to be Brazil’s second largest trading partner, accounting for 14.5% of Brazil’s total trade. China tops the list with 25.6%.
Brazil and America They have long had a close historical relationship. The United States was the first country to recognize Brazil’s independence, while Brazil was the only South American country to fight alongside the Allies in World War II. Today, the two largest democracies in the Western Hemisphere are reaping the benefits of this trade agreement, with Brazilian companies actively exporting goods and services to the United States.
US direct investment in Brazil is led by the manufacturing, finance, insurance and mining sectors. Sales of services by US-owned subsidiaries in Brazil show a strong outlook and positive performance.
Bilateral trade statistics are encouraging and the North American market remains a major opportunity for Brazilian companies. With a population of over 327 million, it is 50% larger than the Brazilian market and its main attractions are its stable currency and unmatched consumption habits, making the US market an ideal environment for Brazilian entrepreneurs to invest and develop your business. Great opportunity for security and growth, one of the most open and accessible markets in the world for foreign companies.
However, it is important for an entrepreneur looking to invest in this market to understand the regulatory issues and legal requirements, as each industry has its own rules and foreign companies must be aware of specific federal, state and local regulations. And it’s different for every state.
The US market is one of the most sought after by entrepreneurs who want to internationalize their business or start a company abroad. , without surprises and in a coherent way, more favorable labor laws and less bureaucratic taxation, which simplifies the management of the company, leaving more space for the investor entrepreneur to enjoy this volatile market with clear laws and rules for consumption. Anyone who chooses to start or relocate their business to the United States will, with absolute certainty, be operating in a market that opens doors for business worldwide.
However, to begin your journey, first understand the types of companies that can be opened and what fits the proposed business model. The most fundamental law firm in America The only one, “sole owner”. This type of company does not require a corporate name and can use the entrepreneur’s own name, and the company does not pay taxes directly. All tax procedures are done directly with the tax authorities as an individual in relation to what profits can be derived from the business. However, it is important to note that there cannot be loans on behalf of the company.
However, the simplest and most popular model is the Limited Liability Company (LLC), a newly formed corporate structure with a limited partnership. In it, entrepreneurs have the option to open a company in the US individually or with partners. This system is most popular among small, single-owner businesses, with the advantages of sole proprietorships and no exposure to the owner’s assets. The biggest advantage of an LLC is that it costs less to set up and requires little formality. But in this model the entrepreneur has limited liability.
On the other hand, the corporation is the most common form for large companies, with the advantage of opening the company with the possibility of going public, a relatively common practice in the United States. Additionally, as a sole proprietorship, the corporation has many unique characteristics such as limited liability, easy transfer of parts of the corporation, can be managed by someone other than its owner, taxes are paid by the corporation and separate from the owners. .
However, this type of company also brings its disadvantages. First, its structure requires a lot of formalities, even double taxation is possible, since the company is taxed and the dividends paid to the owners are subject to income tax on each.
There are other types of companies like GP (General partnership/general partnership), models with two or more partners who share the responsibilities of the business. Shareholder participation affects division of profits, losses and taxation. Also LP (Limited partnership/Limited Companies), which are companies with more than one partner. In that, the obligations of the partners may be limited or unlimited depending on its formation. Taxation in this model takes into account shareholders’ equity. or LLB (Limited liability partnership/ limited liability company), companies with two or more partners who are responsible for business management and follow what is agreed in the articles of association and the liabilities and taxes are proportional to the participation of each partner in the company.
Therefore, given the historical scenario of bilateral relations between Brazil and the United States, the situation for investments Brazilian entrepreneurs is very favorable in every way, as a result of the excellent prospects for this year, the resumption of business and the recovery of the economy after the period of epidemic caused by Covid-19. However, several precautions should be taken and the investor entrepreneur should provide as much information as possible about his performance in the market, consistent planning, detailed business plan and changing the type of company. Be open to the business model and business objectives, so that there are no surprises or disappointments, so that it can flourish exactly and as planned.
Marcelo Fontin is a lawyer specializing in international commercial law with over 20 years of experience in various commercial areas.
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