In the recent past, such waves of investment would have been welcomed on these shores with open arms, like tourists arriving for carnaval.  These days, however, as all expatriates know, monetary inflows mean only one thing:  a stronger real.  The stronger real, in turn, means more expensive Brazilian products abroad and a shrinking manufacturing base at home.  A strong, vibrant economy simply can’t survive on the export of commodities like iron and soy beans alone.

Rousseff’s anger in this case was specifically aimed at what she called the “protectionist” policies of rich nations.  As she put it, “Brazil as a sovereign nation will take all necessary measures to protect its economy.”  Rumors have been flying in world financial circles about how far Brazil will go to protect itself from all the money wealthy nations are throwing at it.  Some have even whispered that Brazil is about to institute a minimum time limit for investments, essentially setting up a financial “quarantine” of foreign funds.

Understandably, these rumors caused a little concern on the part of foreign investors who would not be able to repatriate their funds in case of a financial fall.

The question on many expatriate’s minds will be, “What exactly is Brazil about to do and what does this mean for the exchange rate in the foreseeable future?”

A report from Barclays Capital last week put things in context.  Barclays argued that extreme measures like a time limit were simply not in the cards and Rousseff also dismissed that plan today in Germany.  No, Barclays argued that until the real reaches 1.70 the Brazilians would just use their standard currency control technique—buying USD in the spot and derivatives markets.

So, can we expect to see the real drop below $1.70?  Barclays argued yes, that after facing a barrier at $1.70 the real could drop further.

As they put it:  It is when the USDBRL slips into the 1.65-1.70 range that the finance minister steps in, and we could see more creative intervention mechanisms being used. And, as we have seen in the past, the minister has a large range of instruments at his disposal, from new IOF tax hikes to sovereign wealth fund USD acquisitions.

I tend to agree.  The real will continue to appreciate.  It may not make it far beyond $1.65 in the short term, but I simply don’t see anything to cause a turn around.  Until the rich nations start making money instead of talking about defaults, we will see this trend continue in varying intensities—keeping a constant pressure on the real.

This will come as bad news to some expatriates and will be downright painful to others.  Still, know that whatever you own in Brazil gets more valuable by the day.

http://en.wikipedia.org/wiki/List_of_countries_by_future_GDP_(PPP)_estimates

That ranking put Brazil ahead of such economic heavyweights Italy, France, and Spain.  Many predict that Brazil will even surpass Russia and Germany (currently ranked just ahead of Brazil) at some point in the not-so distant future in terms of GDP.  Best of all, Brazil’s rise has been dramatic and rapid, with the last ten years showing impressive gains across a broad cross-section of economic areas.  There is little reason to believe that this trend won’t continue into the future.

With such an enticing profile of growth, progress, and prosperity it’s tempting to imagine that these advances have been uniform–or at least similar– for all Brazilians.  Is this really the case, however?  Or is Brazil, like many countries, large and small, subject to wide economic gaps by region or even by state?  And if so, where are these disparities and how great are these economic divides?  Most importantly, where does Santa Catarina fit into this picture?

A graphic that appeared in the Economist shows the extreme disparity in regions, especially between the small states of the northeast and the wealthy, southern states.  While there are some obvious problems in comparing individual Brazilian states with whole countries, the chart gives a picture of how disparate GDPs are in Brazil.  The small northeastern state of Alagoas, for example, has a GDP comparable to that of Afghanistan.  On the other end of the scale is the prosperous state of São Paulo, whose GDP is equal to that of the entire nation of Poland.   

http://www.economist.com/content/compare-cabana?fsrc=nlw%7Cnewe%7C09-05-11%7Cnew_on_the_economist

Aviva offers a comprehensive international health care plan called International Solutions.  This service is
for those who will be living overseas for more than six months out of the year.  (They also have a separate
traveler’s insurance.)  International Solutions helps pay for treatments, therapies, hospital accommodation and meals, nursing care, drugs and dressings.  However, the plan is flexible, so you can also choose to include extra benefits on your policy.

Aviva’s service allows you to receive private medical treatment in private, Brazilian hospitals.  It includes specialist fees, diagnostic, tests, hospital charges, and even psychiatric treatment–all at private clinics, hospitals, and out-patient facilities.  While public health care is available in Brazil, long wait times are common in clinics.

Aviva also has a 24-hour telephone service where qualified medical personnel will be on hand to give you advice, travel information and guidance on dealing with symptoms, or directions to find further care. Aviva also provides a 24-hour multilingual telephone service that allows you to consult with staff in your own language.  This is especially important during that early period in Brazil if you haven’t yet fully mastered Portuguese.

Best of all, if you sign up for coverage in Brazil, your policy will cover you for the rest of the world, too, with the exceptions of the US and the Caribbean.  They have a separate policy that covers those countries.

Find out more about Aviva’s global health insurance by downloading the International Solutions brochure for International Solutions.

Finally, notice that in addition to their overseas health services, Aviva also provides home insurance that protects your home while you dancing the samba in Rio or sailing down the Amazon.

The rise of the Florianópolis real estate market is an astonishing success story. A brief  history of the real estate market in Florianópolis is sufficient to put this story into a global perspective and show why Florianópolis is fundamentally different from other comparable real estate markets around the world.

For centuries after the Portuguese first arrived in Brazil in 1500 Santa Catarina remained a distant province disconnected from the commercial and political centers of Rio de Janeiro, Bahia, and later, São Paulo.   Attempts to integrate the state into the 19^th century nation were rebuffed by the citizens of Santa Catarina.  Plans to build roads connecting the region to São Paulo were vigorously opposed and finally defeated.  The state of Santa Catarina remained largely self-contained through the passage of the years.  The economy of the island revolved around fishing and whaling.  No one really wanted to hasten the pace of life.   Even as late as 1960 there were no major roads directly linking Florianópolis with the interior of the state.

As a result, property prices on the island of Santa Catarina remained remarkably low until very recently.  Consider that in the 1940’s beach front property in Campeche was bartered for meat at Carnival time.  The land was so cheap that you couldn’t buy parcels of less than 50,000 square meters.  Things began to change in the 1970’s when the BR101 was built.  The highway made access to Florianópolis much easier and people from São Paulo began to arrive.  They found property prices dirt cheap, the cost of living low, the island as beautiful a place as one could ever hope to find, and the surfing top notch.  Paulistas began to buy land from the fisherman.  Argentines and Uruguayans came, too.

These more sophisticated newcomers bought large parcels of land, legalized them, and then divided them up into individual plots.  This is what happened, for example, in Novo Campeche.  What had been farm land with a nebulous—even questionable title—became a community of completely legal, subdivided lots.  Each plot had an escritura publica, a publically recognized title that allowed buyers to ensure legal ownership.

As soon as property titles became common on the island, prices began to increase 100% per year—year after year.  Developers arrived to build luxury houses and modern apartment buildings.

In 2003, as the Brazilian economy faltered and the real plunged to below 4.00 against the dollar,  Americans and Europeans began to arrive and snap up cheap deals, furthering the cycle.  By 2011 land that had been nearly worthless in the 1970’s is now worth $100 per square meter and above.  Larger plots, formerly used for cattle grazing and horse farming, is now worth tens of millions.

In the last twenty years the real estate market in Florianópolis has realized spectacular gains.  Many have rightfully asked whether such a trend can continue.  Or will Florianópolis succumb to the losses that have devastated property markets in such places as Miami or Marbella?

In Miami losses in the real estate market have been astonishing.  In 2008, at the height of the crisis, high rise projects that were started during the boom of 2003-2007 were left unfinished as buyers dumped their deposits and ran for the exits.  Property prices in South Florida have seen a staggering drop of 50%–and more in some cases.  Prices have now leveled off, but sales are once again beginning to drop, according to the most recent S&P Case-Schiller Index figures.  This new decline may herald even lower prices, especially if the world economy stumbles again.

Marbella, whose beautiful beach real estate market crackled during the boom, are now being sold off at steep discounts by the banks.  As Europe’s troubles continue, one might expect prices there to continue to plummet.

But what of Florianópolis, where property values enjoyed price rises that were steeper than those in the US or Spain?  Did these prices fall as steeply as their counterparts?  No, they did not.  While sales did slow in 2008, prices have not dropped.  In fact, they have only continued to rise and will continue to rise.  Why is this?

There are two main reasons, both of which stem back into Florianópolis’s past as a secluded, remote island in a distant part of Brazil.

First of all, Florianópolis is an island and so real estate is a very finite resource.  As the old saying goes, you can’t make any more of it.  Furthermore, people in Florianópolis have seen the prices of their properties go up dramatically each year and bank on yearly gains of 10-20%.  These are modest increases, they maintain, since earlier gains were dramatically higher.   If sellers on the island of Florianópolis don’t receive what they want, they just don’t sell.  Therefore it is not uncommon for a property which does not sell one year to go up in price the next and the next.  Like the fishermen of the sleepy island town of bygone years, the residents of Florianópolis are content to wait until they catch the big fish. If that fish doesn’t bite, they don’t sell.  This point of view has kept prices going up and up and up in Florianópolis.

The second reason is that the vast majority of real estate in Florianópolis was bought with cash.  Few properties in Florianópolis have been seized by the banks because they weren’t bought with untenable mortgages.  They are owned outright.  So there are no big-discount sales going on in Florianópolis as are now extremely common in Miami or Marbella and many, many other places around the world today.  Consequently, don’t expect to find any cut-rate foreclosed houses in Florianópolis.

One way of looking at this situation is to assume that this is the moment to buy in those badly beaten down markets.  After all, now is the moment to buy cheap in Miami or Marbella.  This is a perfectly reasonable way to think.  But it is not without risk.  There is no telling how long it will take real estate markets in those places to recover.  For example, though selling has picked up in Miami in the last three months, that selling is at a significant discount as compared to 2010.  In other words, prices continue to fall.  Moreover, last month selling dropped off again signaling more bad times ahead.

In such an environment, property purchases that will hold their value against a relentless downward trend may offer a real advantage.  At the same time, even after dramatic price drops in Miami and Marbella, Florianópolis real estate remains below what you can expect to pay for a luxury property in those places, even when bought from the bank at a steep discount. 

Meanwhile, swimming against world currents, Florianópolis property prices just continue to rise.  Here, the beaches remain as pristine as in long-ago times and the way of life is deeply tranquil when compared to Miami or Europe.  While there is no guarantee that prices on the island will not fall, it’s unlikely.  For those who already own a slice of Floripa just won’t sell until they catch their big fish.

Now we are seeing rain clouds gathering on the world economic horizon once again.  Those interested in investing in or moving to Brazil should ask themselves whether this might not be the time to start planning to take advantage of the problems in distant economies and buy into Brazil at a discount.

Last week the real dropped to its lowest levels in seven weeks, R1.86—an 8.5% drop for the year.  Bloomberg went so far as to report that it could drop to 2.40 before the adjustment was over.  Referring to the uncertain global economic scenario Hideaki Iha, a currency trader at Fair Corretora de Cambio e Valores said that, “The situation in the global market is ugly.  With the danger out there, nobody wants to buy the real.”

At the same time Brazil has reported a dramatic economic slowdown.  The economy expanded at the slowest pace in two and a half years last quarter.  In response, the government has vowed to bring interest rates down.   Analysts expect that the policy makers could cut the COPOM by as much as 75 basis points at their next meeting, signaling the government’s anxiousness to stimulate the economy.  Guido Mantega, Brazil’s finance minister told reporters that the government will do “everything possible” to reduce the cost of credit and spur the economy.

It’s clear that this situation will continue, and possibly worsen, until the European debt crisis, Chinese manufacturing slowdown, and the American deficit problems are realistically addressed.  Is this unfavorable scenario a window of opportunity opening for those who hope to invest or live in Brazil?

One approach would be to consider that this is not a good moment to invest.  Brazil is economically vulnerable and who is to say that it is not on the verge of an extended period of economic decline?  That could be the case, especially if China, now Brazil’s largest trading partner, goes into a period of dramatically slower growth.  If that happens Brazil’s export revenues—from such commodities as soy beans and iron ore—would drop and the Brazilian economy would suffer.  That’s because commodity exports now account for nearly 12% of Brazil’s GDP, according to the national statistics agency.

On the other hand, this may be one of those rare windows of opportunity to buy into Brazil at a discount.  Since 2003 there have been only two or three such windows of time when foreign investors could get into Brazil at 20% or more slashed off the usual price.  All such windows have been short-lived.  After the Lehman’s collapse, for example, the real dropped precipitously from 1.56 against the dollar to 2.40.  The Bovespa stood above 70,000 in May of 2008 but plummeted to below 30,000 late in the same year.  But by January of 2010 the Bovespa was up over 70,000 again.  In other words, a 100% gain was not at all unusual during that 15 month period for those who had the courage and foresight to buy at the bottom. 

The same was true of the real.  While it took longer to fully recover, it rose consistently until it reached the 1.56 level and even went a little beyond early this year.  For larger investors, the drop in interest rates might bring Brazilian rates into line with other developing countries for the first time and increase consumer and corporate lending alike.

Are we on the edge of another Brazilian precipice?  Many analysts think we are.  If so, bold investors will be looking to take advantage of a solid overall Brazilian economic scenario that goes into a temporary decline.  While there’s never any guarantee that the past will repeat itself and any drop in Brazilian currency or stocks may not be followed by a dramatic recovery this time round, it might be worth considering the gains that could be made if it does. 

For those who are looking for a way to move to Brazil and get into the dance of Brazilian life, get ready.  In the next year the window of opportunity might once again open to purchase beautiful Brazilian property at a steep discount, minimize moving costs and other expenses, and lessen the threshold of investment required for an investors’ visa.  Such opportunities have appeared only rarely in the period since 2003.  Only time will tell, but the window might be about to slide open once again.

Dr. Carlos Zoéga Coelho

In our most recent interview, Carlos Zoéga discussed the exciting, new service offered by his law practice. Carlos will now offer a full-service business consultancy that allows foreign investors the opportunity to perform thorough due-diligence investigations on Brazilian businesses. 

This new consultancy service, Carlos told me, “examines all the non-legal aspects of investing in a Brazilian company.  For example, we can now help foreign investors evaluate the financial records of the company.  We can also prepare the necessary reports to provide the investor with a clear understanding of the risks and returns their investments should command.”

Carlos is offering this consultancy service to his clients, whether they are interested in investing in Brazil–today one of the top two BRIC economies–or investors who seek an investor’s visa in Brazil through investment.

Carlos assists foreigners wishing to living permanently in Brazil to obtain a permanent resident status through an investor’s visa.  In our interviews on this subject, Questions about Brazil’s Investor Visa?  Ask Dr. Zoéga. and More Questions about Brazil’s Investor Visa?  Ask Dr. Zoéga. we learned that foreign nationals who invest R150,000 in a Brazilian business can obtain the right to live permanently in Brazil.  Those articles described how to go about setting up your own business from scratch.  But not all clients wanted to build up a business from the ground up.

In fact, several clients asked if Carlos wouldn’t be willing to try and connect them up with already-existing Brazilian businesses so that they could act as partners or investors.  Carlos explained that “in many cases, my clients tell me that they would prefer to become a partner of a business that is already running, that is already successful, that is already making profits, than to start from zero in a new country, in a completely different cultural and economic environment.”

Some of these clients have special areas of expertise that they can offer Brazilian businesses.  Others just want to make an investment and be silent partners.  Investing in a Brazilian business, however, can be almost as complicated for an uninformed foreign investor as starting a Brazilian business from scratch.  That’s why Carlos is now offering a specialized business consultancy in addition to his legal services.  Those who wish to invest in an already-existing business can make sure that the business is profitable, honest, and following Brazil tax and other guidelines.  The first step is “due diligence in researching the prospective company in order to understand exactly what the situation is regarding its debts, especially labor and tax debts.”

Through this consultancy, prospective investors can assess whether a Brazilian company is worth investing in, how much of a return they should receive on investments, and assess its track record.

Carlos added that he is now equipped to offer his consultancy service to both individuals and businesses as well.  In fact, his services are available to any investor, whether they want to live in Brazil or not.  In addition to assessing the value of partnerships with individual companies, Carlos can also help to set up holding companies that control partnerships in a variety of Brazilian companies in order to diversify investments among different industries or markets.

Once clients have decided that a partner business is a good investment, Carlos can also negotiate “the percentage of the shares that will be sold against the amount that will be invested, including the preparation of all legal documents involved.”  So, for those individuals and businesses who want to come to Brazil and invest in an already-existing and profitable business, Zoéga Coelho & Advogados now offers a way to do it in a way that is fully informed and with proper due diligence.

Dr. Carlos is Senior Partner at ZOÉGA COELHO & ADVOGADOS  Rua Adolfo Melo, n.38, sala 202 – Centro 88015-090 Florianópolis/SC – Brasil Telefone: (55 48) 3223-4729  Fax: (55 48) 3322-0483

SKYPE: carloszoegacoelho

So what is picanha?  How do we translate Brazilian cuts of beef into American or English cuts of beef?  The answer to that question is surprisingly hard to answer.    

Top sirloin? Bottom sirloin?  Which one is it?    

Someone named tanya c on Ask Yahoo! timidly suggested that picanha is not sirloin at all, but actually is part of the Round—or rear—of the cow.  However, no one seemed to give any credence to tanya c.    

British Beef Cuts

Confused, I decided to take the matter up with John Rodnei of Companhia da Carne in Campeche.  He explained that picanha is actually from the Round section (tanya c was right!!!) and that the correct name for it is actually the rump roast, though in the U.S. the fat is usually cut off the top.   “In England,” Rodnei said, “it’s the top part of the Silverside and Topside sections.”    

John Rodnei also handed me a useful chart that shows the equivalents of all the cuts of beef from Brazil, England, the USA, Germany and other countries all together.   So here it is.  Next time you find yourself confused at the butcher’s, just take a look at this chart and all will become clear! Translation of Beef Cuts Various Languages   

Companhia da Carne, where you can buy some of the best meat on the island, can be found at Rod.  Luis Antonio Gonzaga, 2255, just across from La Pedrita.  Tel.  3226 7031.     

Any questions?  Talk to John Rodnei, he’ll help sort you out.

If you are new to Floripa or to Brazil, you may be looking for a pleasant place to learn Portuguese. Located in the heart of Lagoa da Conceição, The Language Club is a well-established language school with over eighteen years in the business, with many, many happy students from all over the world. Not only does The Language Club (or TLC) offer excellent Portuguese language instruction, but the school also provides the documents necessary for obtaining a student visa.  And if you need it, TLC offers foreign visitors that extra tender loving care: they can find a place for you to stay and even help negotiate your rental contract in the process.

Set in a beautiful campus, just a block from the shores of Lagoa de Conceição, The Language Club provides modern, clean classrooms with up-to-date teaching technology, like interactive whiteboards. At the snack bar you’ll find delicious, freshly-made Brazilian snacks and juices. Calm, pleasant, and up-beat, The Language Club offers a welcoming atmosphere for you to learn Portuguese and can serve as a solid base for all your Brazilian adventures.

Portuguese classes at The Language Club emphasize conversation, with an eye toward practical, everyday situations. In the class room, students study grammar, vocabulary, and pronunciation.  During further class time, students go out on the streets to supermarkets, restaurants, and stores in order to practice Portuguese in the real world.  Later, teachers and students review students’ experiences in speaking Portuguese and correct mistakes in a process that builds confidence and takes the language learning process out of the abstract and into the real.

TLC offers Portuguese courses from beginning to advanced levels, including preparatory courses for the CELPE-BRAS, the Brazilian Portuguese proficiency certificate, issued by MEC (National Ministry of Education). Rosane Kath, the school coordinator for the Portuguese Courses, is a specialist in Portuguese as a Foreign Language with a degree from the Catholic University of Rio de Janeiro (PUC-Rio).  Ms. Kath has given presentations in national (SIPLE) and international conferences and has also worked abroad.  Additionally, The Language Club has been an institutional member of BRAZ-TESOL since 1994.  BRAZ-TESOL is an affiliate of TESOL International (US), IATEFL (UK) and a member of Southern Cone TESOL (Argentina, Chile, Uruguay and Paraguay).

Beyond language instruction, The Language Club can help prospective students obtain a student visa that will allow them to stay in the country from 6 months to a year. Students who register for at least 90 hours of instruction at The Language Club receive a letter from the school which allows the student to apply for a student visa.  Once you have this letter in hand, it is usually a straight-forward process to obtain your visa.  (Be aware that you must obtain this visa—and the letter—before leaving your home country.  To apply for your visa, contact the Brazilian consulate closest to your place of residence.)

The Language Club also serves as an advocate for students. TLC can arrange student housing in and around the Lagoa area, for instance.  The school works with a variety of local landlords who rent houses and apartments by the month, so there is no need for foreign visitors to sign yearly rental agreements or pay costly—and often confusing—security deposits and fees.  Furthermore, beyond finding housing, TLC will help mediate any disputes that might arise during the rental period.  This is especially practical for people who speak little or no Portuguese, as confusions over rental rules occasionally crop up.  The Language Club provides these services for $30 USD.  As student advocates, the TLC administration is available to help foreign students negotiate whatever complications and difficulties might arise during their stay in Floripa.  This sort of ¨backup¨ can be invaluable for anyone staying in Florianópolis for a short time and is especially useful for those whose Portuguese is less than perfect.

TLC is far more than just a Portuguese school.  If you happen to get bit by the language bug while you are on the island, The Language Club offers classes in English, French, Italian, and Spanish as well.

So “Falas Português?” “Parli italiano?” “Parlez vous francais?”  “¿Hablas español?” If not, contact The Language Club. They’ll provide just the TLC you need here in Floripa.  With their help you’ll be chatting with friends the world over, in no time.

For more information, visit www.thelanguageclub.com.br/index.php?lang=en-US

Adriana Maciel, Official Translator

The good news is that there is now a new translator in town:  Adriana Maciel, who works out of Lagoa de Conceição.  Now anyone who needs a translation can obtain one—WITH NO LONG WAIT TIMES!

And for those of you who live outside of Floripa, Adriana can accept and return documents for translation through the regular mail if you don’t live in on the island.

I recently met with Adriana in her home near the center of Lagoa to talk about her training, her work, and her life.   Originally from São Paulo, Adriana speaks perfect English.  She studied both Portuguese and English at the University of São Paulo, where she earned separate BA degrees in each language.  Adriana also studied at Bishop’s University in Canada, where she lived for a year.  She has also studied and lived in Portland, Oregon.

I asked Adriana why there are so few people working as official translators in Florianópolis.  The reason, she explained, is that the Junta Commercial—the governmental board that sanctions official translators—only chooses new translators once every twenty years or so.  Adriana was chosen as one of only two new translators from a pool of nearly 200 candidates after a rigorous—and apparently nerve-wracking—examination.   Her presence in Lagoa will be much appreciated both by foreigners and by Brazilians who need official translations.

More than just a translator, Adriana lives with one foot in the English-speaking world and travels regularly to South Florida to visit her sister, who lives there.  She has called Florianópolis her home since 2007.

You can contact Adriana via e-mail at macieladri@ig.com.br or reach her by telephone at: (48) 3879-7472 or mobile at: (48) 9163-8336.

SHF:  I heard somewhere that you have to have a Brazilian partner—or buy into an existing Brazilian business—in order to get an Investor’s Visa.  Is that true?

Dr. Carlos Zoéga, Senior Partner at Zoéga Coelho & Advogados

CZC:  No, that’s not true.  What you do have to have, though, is a person who is a Brazilian citizen or a permanent resident to be what’s called an “administrator.”  The administrator has to be Brazilian or a (foreign) permanent resident because the government requires someone with a permanent Brazilian address to receive documents on behalf of the company.  An administrator must be appointed when the documents are filed to open the company.  So, someone besides the person opening the business will have to be an officer of the company—at least at first.

SHF:  Well, six months after filing the articles of the company the visa holder will become a permanent resident.  Can he or she them become the administrator?

CZC:  Yes, they can and that sometimes happens.

SHF:  Do visa applicants feel nervous about appointing an administrator to run a company in possession of R150,000 of their cash?

CZC:  Usually the decision to open a business is taken among friends.  People rarely just appoint a stranger or an acquaintance to be their administrator.  Usually it’s an important contact or connection in Brazil.  It’s usually a person that the investor knows well. It can’t be just anyone.

SHF:  Now, let’s talk about once the visa process is completed.   What are the investor’s responsibilities?  I once spoke to a person who has an Investor’s Visa.  I asked him how his business was going and he shrugged, grinned and then confessed that he wasn’t doing much business.  Instead, he was just lying on the beach and drawing the interest on his investment each month. He seemed quite pleased to be getting a steady return. Is that okay?  Or is there some oversight to make sure that you really are running a Brazilian business?

CZC:  No, that’s a problem.  When you take out the Investor’s Visa you have to explain the nature of your business.   Later, the Polícia Federal, which monitors all visas, will ask you to prove that you have been engaged in the type of business stated on your application.  If you have not been involved in business of that nature then you will be asked to leave the country.

SHF:  How long before you have to report to the Polícia Federal and show that you are running a business?

CZC:  It used to be five years.  But now it’s only three.  Many people don’t know about that, but it’s important to know because the police WILL check your economic activity.  It’s not clear yet whether people who received their Investor’s Visas when the period was five years will be checked after only three years, but it is possible.

SHF:  Why did the law change?

CZC:  The law was actually changed as a result of efforts on the part of the Ministry of Labor.  You see, the Investor’s Visa is supposed to give foreigners the right to live in Brazil in exchange for creating jobs in Brazil.  It’s not just a formality, it’s a real policy goal.  The amount a person had to invest in Brazil used to be much higher, but the government lowered it in order to attract investors.  They are working with the assumption that people will bring in their investment money, open businesses, and then hire Brazilians to work for them.  The Ministry of Labor wanted to make sure that these jobs would really appear.  So they shortened the time limit.

SHF:  So, what would happen if you go to the authorities after three years and they see that you have no economic activity to speak of and you say, “Well, I meant to run my business, but one thing led to another, there were so many sunny days, I took up surfing.  I’m very sorry.  I’ll try harder next time.”

CZC:  Well, then you’ll be asked to leave the country.  The police will say that you are obviously a tourist and not a businessman at all.  So you are to leave and return on a tourist visa, which allows you to stay in the country for six months every year.

SHF:  Well, what if you haven’t done any business, but you hire a maid and a gardener?  Does that count?  Will the authorities ask you to leave and take away those jobs?

CZC:  No, that doesn’t count.  Domestic jobs are out of the immigration policy focus. You will be asked to leave the country, because your visa will not be renewed.

SHF:  So, I guess that means that you can’t take your investment cash and buy a house with it?

CZC:  No.

SHF:  Well, what about a hotel?  What if you build a hotel and your house is part of the hotel?

CZC:  In that case it might be okay, but you would have had to list “Hotel” as the nature of your business when you filed the original documents for the Investor’s Visa.

SHF:  What about if you open a business, do regular commerce, but don’t hire anyone.  For example, what if you open a translating business and work it yourself.   Or if you open a consultancy business where you are the only employee.  In other words, the nature of your work excludes Brazilians.  What then?

CZC:  When you are applying for an investor visa, you need to attach to the application form a document showing your investment plan, the number of jobs that will be generated, the type of earnings your business will provide, the increase of productiveness, etc. If you declare that your business will not generate a single job, it is very probable that the authorities will not grant you the investor’s visa.

SHF:  Lastly, what about if you open a business and you just can’t make any money.  You hire people, you advertise, you do whatever you can do, but the business just doesn’t cut it?  Can you lose your visa?

CZC:  You don’t have to make a profit.  You don’t have to make a big success.  But  you do have to show that you were engaged in the type of economic activity described on your application.

SHF:  Dr. Zoega, on behalf of Sweet Home Floripa, I want to thank once again for helping our readers understand Brazilian law.

CZC:  My pleasure.  See you next month.

Dr. Carlos is Senior Partner at ZOÉGA COELHO & ADVOGADOS Rua Adolfo Melo, n.38, sala 202 – Centro 88015-090 Florianópolis/SC – Brasil Telefone: (55 48) 3223-4729  Fax: (55 48) 3322-0483

SKYPE: carloszoegacoelho