Doing business in Brazil as a foreigner is entirely possible — and for the right venture, genuinely rewarding. The ninth-largest economy in the world, Brazil has 215 million consumers, the region’s deepest capital markets, and a fintech and digital infrastructure that is technically world-class. The challenge is the Custo Brasil: a tax code that requires specialist accountants to navigate, labour regulations built on a 1943 framework, and a registration bureaucracy that still requires patience even after meaningful digital reform. This guide covers every major step an informed foreign entrepreneur needs to understand before getting started.
The “Custo Brasil” — What It Is and Why It Matters
“Custo Brasil” (Cost of Brazil) is the aggregate burden of doing business in the country: an estimated 60–90 changes to tax legislation per day, compliance costs estimated at 1,500 hours per year per company (OECD), a SELIC rate that makes corporate borrowing among the most expensive in the world, infrastructure logistics costs double those of the United States, and labour obligations that make the true cost of an employee 1.5–1.8x gross salary. The 2024–2026 tax reform (EC 132/2023) will eventually simplify the indirect tax system — replacing PIS, COFINS, ICMS, and ISS with a dual VAT — but the transition runs to 2033 with dual compliance obligations in the interim. Budget for Custo Brasil; don’t be surprised by it.
