Doing Business in a Foreign Country - Essay Example

The understanding of the things that can determine the performance of a business operation in Brazil will ensure that foreign investors will be able to establish sustainable businesses in the country. Though doing business in Brazil cannot be easy and has several issues, it is achievable for a foreign organization that is committed to explore the opportunities in the country. The business environment of Brazil requires that the investor be willing and dedicated to the performance of business by supplying sufficient resources and personnel (Ibp Inc 56).

Political environment of Brazil Brazil has a business environment that is regulated by the political atmosphere of people in the country considering the federal government has a lot of input into the operation of the business. The government strategies in the country have contributed to the kind of operations into which investors can venture so that they exploit the economic opportunities in the country. Through the government system, the parliament of the country decided on the amount of interest that businesses and individuals could be charged when they acquire loans from the banks.

This regulation of the interests on loans shows that there is political influence in business operations in the country (Ibp Inc 55). Legal Environment Foreigners who have to invest in Brazil take a considerable long time to comply with the bureaucratic systems that are established to allow them to operate in the country. This time is taken in filing of issues that show compliance to the legally acceptable charges like taxation, labor laws, reporting and getting permits for their businesses. These processes are legally stipulated and, therefore, every foreign investor has to conform to the requirement to be allowed to start a business (Ibp Inc 55-57).

Economic Environment Brazil is a capitalist state that operates in the southern America and has firmly established itself in export of high quality products that attract customers. This means that businesses in the area have to compete for their customers and ensure that they make sales to them so that they can sustain their operation. In many instances, the operations in the business in this country involve export of coffee and other agricultural products, as well as impost of machinery and other products from its business partners that may include the US, China and South Korea among others (Ibp Inc 56).

Monetary Environment The federal government of Brazil has Real as its currency since 1994 and, therefore, business operations in the country are done using this currency, especially when it targets the local population. The currency has performed well at the steady exchange rates with other popular currencies within the business environment. This means that the operations of the business in the country are not threatened if the exchange rates in the currency shift within considerable limits. The currency is used to trade with the people within the country or those who want to buy products from the country from other countries (Marr 76).

Fiscal Constraints in doing Business in Brazil In Brazil, the rates of interests in the central bank of the country are high as compared to other countries in the world and, therefore, it can affect adversely the foreign investors who want to