Several world-known companies are hesitant to enter the (complex) Brazilian market. Although it’s been showing record growth rates, Brazil’s market is still avoided by many multinationals due to its high costs and bureaucracy (“Custo-Brazil”). Among the companies interviewed by Veja magazine for this article are: H&M;, Ikea, Best Buy, Abercrombie & Fitch, Vodafone, Tesco, J.C. Penney, Metro AG, Ritz-Carlton and Four Seasons.
Interestingly, most of the companies cited above are present in the other BRIC countries (Russia, India and China), and even in less developed regions such as Middle East and Africa. But they refuse to buy into the “Brazilian Dream”.
Among the reasons to stay out, they claim: high taxes, expensive real estate, closed market (difficult to import parts), no incentive (and very high costs) for local manufacturing, lack of skilled labor, bureaucracy, and precarious infrastructure.