Foreign direct investment into Brazil boomed between 2009-2011 but had been slowing down ever since. However, according to theWorld Investment Report 2023published by UNCTAD, FDI inflows increased to USD 86 billion in 2022, compared to USD 50.6 one year earlier (+69.9%), the second-highest value ever recorded and the fifth worldwide, due to a doubling of reinvested earnings. Moreover, Brazil attracts 41% of direct investment in Latin America in 2022. In the same year, the total stock of FDI stood at USD 815.6 billion, around 42.4% of the country’s GDP. According to the latest figures available from the Brazilian Central Bank, the main investing countries in Brazil are the Netherlands, the United States, France, Spain, and Canada. Investments are mainly oriented towards commerce, non-metallic mineral products, chemical products, financial and auxiliary services, and motor vehicles. In the first eight months of 2023, FDI inflows totalled USD 37.9 billion, down by 36% compared to the same period one year earlier (data Central Bank).
The country is an attractive destination for international investors due to several factors: a domestic market of over 210 million inhabitants, availability of easily exploitable raw materials, a diversified economy that is less vulnerable to international crises, and a strategic geographic position that allows easy access to other South American countries. However, investment in Brazil remains risky because of some negative factors including cumbersome and complex taxation, bureaucratic delays and heavy and rigid labour legislation. As part of the country’s ongoing effort to strengthen its business environment, Brazil introduced electronic certificates of origin which reduced the time required for import documentary compliance, facilitating and simplifying the whole process. The country also made several infrastructure concessions which have helped foster investment. The current president has plans for further improving the business environment in the country, implementing reforms such as decreasing the number of days needed to create a company in Brazil from 79.5 days down to the regional average of 30 days. Easing of regulation in some sectors and potential amendments to the tax system should help as well. To date, Brazil does not have a national security-based foreign investment screening process. The country ranks 49th among the 132 economies on theGlobal Innovation Index 2023and 127th out of 184 on the2023 Index of Economic Freedom.
