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Start a business in Brazil : the benefits of the Direct Investment OmbudsmanPosted 23/10/2019
The Brazilian government recently issued Decree No. 9.770 on 22 April 2019, which aims to strengthen the Direct Investment Ombudsman (DIO) service that already existed with the Chamber of Foreign Trade (Câmara de Comércio Exterior, CAMEX).
This new article seeks to demonstrate the beneficial impacts of this update for potential foreign investors on the Brazilian market.
The Direct Investment Ombudsman before the Decree of 22 april 2019
First and foremost, it’s necessary to specify that the Direct Investments Ombudsman is part of the Executive Secretariat of the Chamber of Foreign Trade. Since the beginning of 2019, this service is attached to the Special Secretary of Foreign Trade and International Affairs of the Ministry of Economy.
It is also worth remembering that the Ombudsman on Direct Investments was initially founded in the circle of the Cooperation and Facilitation of Investments Agreement (CFIA) and negotiated by Brazil. To this day, the country led by Jair Bolsonaro has signed investment agreements with Mozambique, Angola, Malawi, Mexico, Colombia, Chile, Peru, Guyana, Ethiopia and Suriname. To that has been added the signature of a protocol on the facilitation of investments under Mercosur.
This approach is in line with the OECD Declaration on International Investment and Multinational Enterprises of 1976. Brazil, as a candidate for entry to the OECD, has been a member of this Declaration since November 1997.
With the release of the new Decree, procedures for foreign investments in Brazil have been significantly extended.
How this decree opens new perspectives for Foreign invests in Brazil ?
So far, the Direct Investment Ombudsman could only respond to solicitations or complaints from investors whose home countries had signed a Trade Facilitation Agreement with Brazil.
The purpose of this decree is that this mechanism – through its electronic platform – is now accessible to all foreign investors and becomes their single desk for investment in Brazil. To bring about this reform, Brazil has been inspired by similar mechanisms put in place by other country, especially the South Korean model.
The central role of this service is to provide a coherent and effective response to the problems and obstacles encountered by investors in Brazil. Thanks to this reform, the service should turn into an investment facilitation platform (and reinvestments). In order to move in this direction, it will provide potential investors with answers and/or Brazilian regulations – relying on the relevant technical services (government agencies and other Brazilian ministries).
This mechanism should also allow the Brazilian authorities to identify, monitor and manage business requests in a more uniform approach. A consolidated vision that will enable them to identify possible/desirable reforms for improving the investment environment in Brazil.
The DIO is therefore a “facilitator” tool, serving investors, responsible for delivering concrete results in order to reduce the “Brazil cost”.
In a nutshell, let’s outline that the Ombudsman’s office has two main functions :
- Providing information to potential and existing investors about legal and regulatory procedures to open a business in Brazil.
- And also, guaranteeing a consistent and efficient government response towards investors’ inquiries and/or grievances.
You’re thinking of investing in Brazil ? Our team will supports you in all the administrative set-up process. Don’t hesitate to complete our contact form, we’ll be delighted to help you bring your brazilian business project to life.
Author's post: Europartner Accounting