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Young Entrepreneurs Favour Brazil for Investment

Brazilian investment opportunities are not just top of the agenda for asset managers, hedge funds and developers of real estate. Young entrepreneurs also favour investment in Brazil, ranking the country third in the G20.

Among the G20 nations, Brazil comes in third place when it comes to attractive investment opportunities. In the latest Ernst & Young Entrepreneurship Barometer, young people in business rank Brazil behind the US and China but ahead of Germany, Japan and the UK in terms of a favourable business environment.

Optimism Plus Growth

Describing Brazilian investment as having "high potential and strong growth", the Barometer finds young entrepreneurs very optimistic about opportunities in Brazil. This optimism springs from Brazil's consolidated economic strength and "great policy improvements".

Reflecting this, the creation of new businesses in Brazil grew nearly 30% between 2005 and 2008, considerably higher than the G20 average (11.8%). New business density in Brazil stands at 2.4, on a par with the 2.5 found in the G20 and much higher than the 1.3 average among the rapid-growth market.

Strengths & Opportunities

The Barometer lists the strengths in the Brazilian investment environment for young entrepreneurs. Highlights include a more favourable business culture towards entrepreneurship in Brazil, which is mirrored in high employment opportunities in small and medium enterprises, responsible for 80% of job creation.

Economic growth has expanded the consumer market in Brazil creating countless opportunities for investment in a wide range of business areas. The Barometer also notes that many sectors are fragmented, which translates into big potential for consolidation.

Infrastructure is another key area for Brazilian investments. Massive government and private investment for the 2014 and 2016 sporting events has, in turn, attracted huge interest. Brazilian real estate, particularly within the social housing programme Minha Casa Minha Vida is also a favoured destination for investors.

Tasks Ahead

Together with a huge potential for investment, Brazil comes with several challenges for newcomers and young entrepreneurs doing business there. The Barometer find high corporate tax rates and labour costs place obstacles in the way of new businesses. Starting a new business is also time-consuming and bureaucratic compared to some other G20 nations.

However, access to funding has improved and the government has pledged to reform tax regulations to facilitate doing business in Brazil. And in spite of the tasks ahead, Brazil is the best country in the G20 to do business for 58% of Brazilian entrepreneurs.

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