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Brazil Foreign Investment Booms

Foreign investment floods into Brazil as key multinationals announce major investment flows for this year. Between them, Wal-Mart and Ford will be investing over US$3 billion in 2010, a sure sign that foreign investment in Brazil is booming.

Wal-Mart, the world's largest retailer, has just announced that it will increase its investment in Brazil by a massive 40% this year. The giant supermarket chain will invest between R$2 billion and R$2.2 billion (US$1 billion) in local stores throughout Brazil over the next 12 months.

The plans revealed by Ford to invest US$2.3 billion in Brazil this year show that Brazil's car manufacturing has a bright future. At a time when the car industry in Europe and North America is suffering from cutbacks and factory closures, the automobile sector in Brazil has never been stronger.

On the technological side, Infosys, a world leader in new generation IT technology, is establishing a subsidiary company in Brazil. The company, India's second largest software producer, will set up its first development centre in Belo Horizonte. According to Mr Gopalakrishnan, Chief Executive Officer and Managing Director of Infosys, "Brazil is the largest IT and Business Processing Outsourcing services market in Latin America, with the eighth highest IT and BPO services spend in the world".

As well as attracting foreign investment inflows, Brazil has also seen booming export trade over the last 12 months. Brazil is extremely rich in commodities and the Chinese appetite for these has led to record levels of commodity exports. Export trade between China and Latin America generally has grown by 40% since 2003 and import-export trade with India has increased by 50%.

Brazil is a major centre for investment in acquisitions. According to the Latin Business Chronicle, over half the top 25 acquisitions (acquirers and targets) that took place in Latin America in 2009 were Brazilian. The Chronicle reports that this tendency looks set to continue during 2010 as multinational interest in Brazilian companies grows and Brazilian companies expand at international level.

2010 also promises to be a boom year for property investment in Brazil. Homesoverseas.co.uk, who tip Brazil as this year's top destination for property investment, claim foreigners are literally flocking to Brazil to buy real estate. The Brazilian government housing programme, Minha Casa Minha Vida, has also sparked major interest from foreign investment.

At a time when many countries are still suffering from lack of foreign investment and confidence, Brazil is something of a honeypot. Previous high records of foreign investment mean that Brazil is the world's second largest destination for foreign investment inflows after China. 2010 promises to follow suit. As a result, at Obelisk, we believe that foreign investment opportunities in Brazil are currently second to none - whether your investment runs to thousands or millions of euros.

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