São Paulo – The dual income tax, red tape and the exchange rate were pointed out as some of the main obstacles to the internationalization of Brazilian companies attending the seminar “Internationalization of Brazilian Companies,” held today (7th) at the headquarters of the Federation of Industries of the State of São Paulo (Fiesp).
The event brought together large Brazilian companies that maintain operations in other countries, such as Embraer, Marcopolo, Petrobras, Vale, Alpargatas, among others, as well as government representatives, such as the minister of Development, Industry and Foreign Trade, Miguel Jorge, and the Foreign Trade secretary, Welber Barral, as well as economic sector organizations.
Alberto Pinto Souza Júnior, special advisor to the Secretariat of Federal Revenue, stated that Brazil must pay attention as it sets rules for reducing tax on exports, because it is being watched by other countries and by the World Trade Organization (WTO). “Brazil is under scrutiny, and our domestic norms are watched by the whole world.”
In turn, Alessandro Teixeira, president of the Brazilian Export and Investment Promotion Agency (Apex), considers the high level of competitiveness of mature markets to be one of the main obstacles to the internationalization of national companies. According to him, 45% of Brazilian transnational companies have internationalized themselves in order to expand their export market.
José Carlos Martins, executive director for Vale, preferred to underscore the advantages of maintaining operations abroad. The executive presented estimates according to which for each dollar directly invested abroad, two dollars are generated in exports for emerging countries. Other advantages would be lowering the cost of capital operations for investing in the company’s home country, attracting foreign investment into the home country through joint ventures, and opening the market to national partners.
As a challenge, Martins mentioned the large geographical distance between Brazil and the markets of the United States, Europe and particularly Asia.
The director of the International Area of Petrobras, Jorge Luiz Zelada, claimed that the company is still in an initial stage of internationalization compared with other Brazilian companies, but hopes that the pre-salt may give rise to a broad range of exportable products.
Horácio Forjaz, executive vice president of Corporate Affairs at Embraer, called attention to the specific features of the aircraft market, such as the low production scale, the capital intensiveness and the need for highly trained labour force, in order to explain that “the aircraft industry needs to export, it cannot sustain itself by manufacturing for the country only.”
The CEO of bus body manufacturing company Marcopolo, José Rubens de la Rosa, underscored the need for government support. “The government can help companies to know the risks of investing in the countries that they wish to invest in.”
*Translated by Gabriel Pomerancblum
