Everything to know before shipping to Brazil
Created on July 28, 2022 | Last updated on July 19, 2023 at 02:02 pm
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Freight forwarders are always looking for new ways to increase their sales and expand their business by finding new customers in different markets. Expanding your freight forwarder’s operations into a new market, while advantageous, has its challenges… If you are considering exploring the opportunities of the Brazilian market, here is everything you should know before shipping to Brazil.
Getting to know the Brazilian market
Shipping to Brazil means entering the fifth most populous country in the world with one of the ten largest GDPs. However, some of the things that make the country extremely attractive to tourism can make transporting to the region a challenge.
Similarly, Brazil can be a lucrative place to invest, despite occasional economic and political turbulence. That’s because, since 1960, Brazil’s economy has expanded from $15 billion to more than $2 trillion in 2011.
Facing Brazil’s economic and logistical challenges requires that freight forwarders have a good knowledge of the country, as well as a logistics partner with experience in the region.
One of the reasons why Brazil is such an influential country in Latin America is its territorial enormity: the country occupies half of the South American territory. In addition, Brazil has a large and diverse population of approximately 201 million people.
Although the country is experiencing economic challenges, the Brazilian economy is still large and dynamic. The size of the Brazilian market translates into powerful business opportunities for companies wishing to expand and grow beyond their local borders.
Talking about freight transportation, Brazil, the largest country by population and land area in South and Latin America, shipped about $280.8 billion worth of goods around the world in 2021. In addition, the country imported $219.4 billion in goods from around the world that same year.
Despite being an attractive market, shipping goods into Brazil also has challenges that you need to keep in mind before you start expanding your operations in the region.
Unpaved roads are the most obvious challenge for shipping goods throughout the country. Since the main shipping method is via truck, this can slow down deliveries once they are in the country. It also causes Brazil to have one of the highest logistics costs in the world.
In addition, Brazil has a complex regulatory system and as a result shipping into the country requires special knowledge of the Brazilian regulatory network to avoid being caught with fines.
Brazil’s language difference when compared to other Latin American countries also makes it difficult to do business there. With most business being done in Portuguese, your Spanish-speaking staff and partners will be less useful in Brazil.
Things to keep in mind before shipping to Brazil
The transportation challenges for Brazil fall into three main categories: infrastructure, regulation, and language. But that doesn’t mean you should avoid this huge economic powerhouse…
Here are 2 things that can help you when it comes to shipping to Brazil:
- Brazilian rules and regulations
In order to do business in Brazil, the first thing you must do is register with the country’s Foreign Trade Secretariat (SECEX). Once registered with SECEX, you will receive a password to operate SISCOMEX, which is an online register that creates electronic import documents and transmits information to a central customs system.
Besides reducing the bureaucracy required to plan an import operation in Brazil, this platform will concentrate all the data related to the customs clearance of the cargo, making it easier to monitor the processes remotely.
The clearance of products imported into Brazil is subject to authorizations issued by the respective Brazilian authorities that regulate the entry and marketing of these items. This means that in addition to registration in Siscomex, you may also need specific documents for the type of goods you are importing into Brazil.
So be sure to check what kind of documents are needed specifically for the cargo you intend to ship to Brazil.
- Tax benefits
Knowing the tax benefits offered by the Brazilian government that dispenses or reduces the costs of importation, can make the process more economical. The ex-tariff, for example, consists of the temporary reduction of import tariffs for capital goods, as long as there are no similar goods being manufactured domestically in Brazil.
The ex-tariff program is coordinated by the Ministry of Industry, Foreign Trade, and Services (MDIC) and can only be requested by companies with import/export registration at Customs.
Another tax levied on imports is the Industrialized Products Tax (IPI), a federal tax levied on most imported manufactured goods. As part of the federal government’s efforts to support local producers, the IPI rates between imported and domestically produced goods within the same product category may differ.
Finally, there is also the Circulation of Goods and Services Tax (ICMS), a state government value-added tax applicable to both imports and domestic products. Although importers have to pay ICMS to clear the imported product through Customs, it is not necessarily a cost item for the importer, as the amount paid represents a credit to the importer.
Find your next opportunity in Brazil
Just like any other region, Brazil has particularities that can make logistics processes more difficult. However, as you’ve seen, the opportunities the region offers are valuable and with the right assistance can be extremely advantageous for your freight forwarder.
So if your freight company is looking to expand into the Brazilian market, remember to understand Brazil’s regulations and trade standards and how they might affect your business. Also, invest your time in building relationships in the country, especially when it comes to your freight partners.
Furthermore, if you want to find partners in Brazil, you can search for freight forwarders on Parnity and take advantage of the business opportunities on the Business Hub.
Parnity’s Business Hub is a technology system where all members add their shipments on a daily basis to get quotations in up to 48 hours. Forwarders can add their requests to receive quotations, and find businesses that other forwarders added to handle on their lane.