Brazil is a major player in the global economy, with the eighth-largest GDP in the world and the largest in Latin America. Its strategic location, diversified economy, and large domestic market make it an attractive destination for foreign businesses and investors. If you’re considering exporting goods or services from Brazil, it’s essential to understand the country’s export regulations and procedures to navigate the process successfully.
In this comprehensive guide, we’ll walk you through the essential steps to exporting from Brazil, including the country’s foreign investment activity, export market, and procedures. We’ll also provide tips and best practices to ensure your business is compliant with local laws and regulations and help you navigate the process with ease.
Brazil’s Foreign Investment Activity
Brazil has been a top destination for foreign direct investment (FDI) in Latin America, with US$61.2 billion invested in the country during 2017-2018. The country’s high-performing industries, including oil and gas extraction, automotive, financial services, trade, electricity, paper production, information, and communication technologies, storage and transport, and food industry and mining, have attracted significant FDI.
To further develop its economy, the Brazilian government has made attracting greater levels of foreign investment the central objective of its international policy since 2016. The government is taking steps to improve, strengthen, and implement laws and regulatory procedures to provide investors with a favorable business environment in the country.
Brazil’s Export Market
Brazil’s export market is critical to its economy and has been growing significantly in recent years. During the first seven months of 2019, the country exported about US$130 billion worth of goods, with Asia as its leading destination (44%). Brazil exports a diverse range of products, including oilseeds, mineral fuels, ores, slag, ash, machinery, meat, and vehicles. Some of these goods have grown exponentially in export volume, notably mineral fuels, including oil, with a growth rate of 39.8% in 2017, and food industry waste, with an increase of 32.9%.
Exporting Successfully from Brazil
Exporting from Brazil requires particular attention to the administrative process and the documents requested by local authorities. Any missing information or errors can cause delays and lead to additional costs. Here are the essential steps to follow when exporting from Brazil.
1. Determine the Tariff Classification of Your Product
The first step in exporting from Brazil is to determine the price category of your product, which will help you apply the right tax rate (VAT) and anticipate your moves and export costs correctly. Several ways can help you find out which tariff category your products belong to, depending on your chosen export destination. For example, if you wish to trade with MERCOSUR member countries, you must refer to the Mercosur Common Nomenclature (MCN).
2. Obtain a Certificate of Origin
The certificate of origin is a document provided by the Chamber of Commerce that proves the source of your goods. You’ll need to send this document to the importer to guarantee its origin and apply the right customs regime. The certificate can be requisitioned at customs, but having it beforehand is advisable when negotiating with the importer.
3. Organize Your Administrative Documents
As in most countries, Brazil has a control and standardization body overseeing manufacturing and quality processes. It’s the exporter’s responsibility to specify the characteristics of the goods and how they’re made so that local customs officers can check whether they correspond to the standards of their country.
Exporters must fill out the right documents in the correct order to avoid any paperwork problems or setbacks. In case of a breach, the customs services can impose high fines or even seize your goods. To avoid such issues, it’s advisable to get help from a competent local customs broker who knows the export laws and administrative procedures. Depending on the product type, more specific procedures and documents are required. The essential documents for exporting from Brazil include:
- Export permit obtained by registering in the Exporter and Importer Register (EIR) – SECEX/MDIC
- Export contract documents
- Letter of credit confirming the importer’s request for goods
- Registration of your company for RADAR and Siscomex services in Brazil, which takes 10-17 days
- Sistema Integrado de Comercio Exterior (Siscomex) for product registration
- Registration of your company as an exporter through the Registo de Qualificaçao no Registo Aduaneiro de Interveniente Interveniente Provisorio e Ambiente de Rastreio (RADAR)
- Obtaining your registration number in the National Persons Register (CPF) or the National Tax Register (CCG) for customs clearance of goods
- Export registration form
4. Master Incoterms
Knowledge and mastery of Incoterms are essential for anyone wishing to export products internationally. Incoterms are standardized terms used to define the rights and duties of buyers and sellers involved in international and domestic trade. Incoterms are developed and regulated by the International Chamber of Commerce (ICC) and define the responsibilities and obligations of the exporter and importer. They take into account loading and transport information, type of transportation used, insurance, risks, and place of delivery.
One widely used Incoterm is ‘Free On Board (FOB), which relieves the exporter of certain responsibilities once the goods are loaded on a carrier vessel. They then become the responsibility of the importer. FOB responsibilities that transfer from the exporter to the vessel’s operators can include freight rental and international freight insurance.
Exporting from Brazil can be a challenging process, but it’s essential to understand the country’s export regulations and procedures to navigate it successfully. From determining the tariff classification of your product to organizing your administrative documents and mastering Incoterms, following the essential steps will help you export your goods or services with ease. If you need personalized support and expert guidance for your export venture, contact us today. LAKAY BUSINESS‘s locally-based experts are fully aware of the specificities of the Brazilian market and its laws and regulations and can help ensure the operational compliance of your business.