Doing business in Brazil: The ease of doing business in Brazil

Doing business in Brazil refers to the time, steps and other requisites that the process of starting up a business in the country requires. The ease of doing business is a key component of a country's competitiveness and as such it is included as part of the Government Efficiency factor in the competitiveness index of the IMD World Competitiveness Center. The ranking includes three indicators of doing business: The number of days needed to start-up a business, the number of procedures required to do so and the costs of terminating a redundant worker (or redundancy costs).Within the competitiveness index, the ease of doing business in Brazil can be compared to the processes in other Latin American countries that are also covered by the competitiveness rankings.

The number of days needed to start-up a business is an element of the framework used to assess the doing business in Brazil. In this indicator, Brazil lags behind all its Latin American peers except for Venezuela. In Chile and Mexico the number of days to start a business is six days, in Colombia 15, in Argentina and Peru 25 days, in Brazil 108 and in Venezuela 144 days.

Another indicator of doing business in Brazil is the number of procedures required to start a business. In this regard, among its regional peers, Brazil lags behind Argentina and Venezuela. In Peru there are five procedural steps needed, in Mexico six steps, in Chile seven steps, in Colombia nine, in Brazil 13, in Argentina 14 and in Venezuela 17 steps.

In the redundancy costs dimension of doing business in Brazil, Brazil leads all its Latin American peers with 8.9 weeks of salary required for termination. In Peru 11.4 weeks are required, in Colombia 16.7 weeks and in Mexico 22 weeks. Argentina and Chile require 23.1 weeks.

The following table summarizes the indicators of doing business in Brazil and other Latin American countries that are include in the IMD World Competitiveness index. Please note that all data is from the World Bank's Doing Business report of 2013.

Table 1. Ease of doing business in Brazil and selected Latin American countries

Country Start-up days
(in number of days)
Star-up procedures
(in number of procedural steps)
Redundancy costs
(in weeks of salary)
Argentina 25 14 23.1
Brazil 108 13 8.9
Chile 6 7 23.1
Columbia 15 9 16.7
Mexico 6 6 22
Peru 25 5 11.4
Venezuela 144 17 NA

 

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Recommended readings

Cavusgil, S. T., Ghauri, P. N., and Akcal, A. A. 2012. Doing business in emerging markets. Sage.

Gouvea, R. 2004. "Doing business in Brazil: a strategic approach," Thunderbird International Business Review, Vol.46, No. 2, pp. 165-189.

Suggested Websites

The IMD World Competitiveness Center's Yearbook

Doing Business website of the World Bank