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Investing in Brazil
The World Bank / International Finance Corporation ‘Doing Business’ project provides objective measures of business regulations and their enforcement across 181 economies and selected cities at the subnational and regional level. In its sixth in a series of annual reports, a set of regulations affecting 10 stages of a business’s life are measured : starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. The Doing Business project encompasses 2 types of data. The first come from readings of laws and regulations. The second are time and motion indicators that measure the efficiency in achieving a regulatory goal (such as granting the legal identity of a business).
The report places Brazil in the 125th position in what concerns ease of doing business, which is not a very confortable positions. Even compared with the other BRIC countries (Brazil, Russia, India and China), Brazil scores the worst results. Amongst other issues, the report points to four bigger challenges for entrepreneurs:
- Brazil is amongst the countries in the world which raise more bureaucratic barriers to starting a business and where starting a business takes longer (152 days, compared to 64.5 in Latin America & Caribbean and 13.4 in OECD countries);
- The rigid labour laws ends up limiting corporations’ size and reducing the number of jobs;
- Brazil is amongst the countries with bigger regulations on proprety registration;
- Paying in Brazil taxes is hard too, as a medium-size company takes 2600 hours to pay or withhold taxes in a given year, against 393.5 in Latin America & Caribbean and 210.5 in OECD countries.
Check Brazil’s overall “Ease of Doing Business” rank (out of 181 economies) and the rankings by each topic in the table below.
| Ease of… | Doing Business 2009 rank | Doing Business 2008 rank | Change in rank |
|---|---|---|---|
| Doing Business | 125 | 126 | +1 |
| Starting a Business | 127 | 125 | -2 |
| Dealing with Construction Permits | 108 | 105 | -3 |
| Employing Workers | 121 | 120 | -1 |
| Registering Property | 111 | 115 | +4 |
| Getting Credit | 84 | 79 | -5 |
| Protecting Investors | 70 | 66 | -4 |
| Paying Taxes | 145 | 138 | -7 |
| Trading Across Borders | 92 | 98 | +6 |
| Enforcing Contracts | 100 | 103 | +3 |
| 127 | 134 | +7 |
Check the Doing Business 2009 data for Brazil and the country report.
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