Taxation & Bureaucracy: Whether you are an investor,
and especially if you are an entrepreneur, this is no doubt a major
downside and one of the more challenging aspects of doing business in
Brazil.
The Brazilian tax system is heavy, hugely cumbersome, and at times very unclear, resulting in unknown liabilities.
Labor
costs are very high both on hiring and firing, and the legislation is
inflexible and hardly supportive of entrepreneurship.
Take for
example a recent decision by a major multinational company to block
email distribution to its workforce in non-working hours and on
vacations, after having lost a an ‘overtime’ labor suit for this reason.
Imagine the potential liabilities, and restrictions to productivity, of such a legal decision(!)
Brazil
is laden with these ‘mines’ and unfortunately considerable time has to
be spent dealing with bureaucracy rather than building great businesses.
This
ends Part I, and to sum-up: Brazil’s potential is massive. At the same
time, the current challenges and shortcomings must be embraced and
tackled one-by-one, both on the individual level of each start-up, and
as a community as a whole.
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