Brazil Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in brazil, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Distribution & Sales Channels
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Overview

It is essential to understand the Brazilian regulatory environment which affects your exported product.  Common issues affecting U.S. products’ distribution and sales include import taxes, product certifications, labeling requirements, and compliance with local health and safety standards. Logistics and customs can also affect the distribution and sales channels for U.S. products, which is why U.S. firms are encouraged to use approved and trusted import/export agents, or local customs brokers to fully comply with Brazilian requirements. Potential U.S. exporters can consider the following channels when selling their products and services in Brazil:  

  • Direct Export to Retailers/Wholesalers: including selling directly to larger retailers that import products from the U.S. using distributors or via their own logistics networks.
  • E-Commerce Platforms: see E-Commerce Platform Chapter  
  • Distributor Networks: including local agents, distributors, sales representatives, and trading companies.
  • Subsidiaries: including joint ventures and licensing.
  • Franchising
  • Direct Selling

Direct Export to Retailers/Wholesalers 

Large retailers and supermarket chains such as Carrefour, Pão de Açúcar, and Walmart Brazil often import products directly from the U.S. through distributors or via their own import networks. 

Distributor Networks  

Several strategies exist for U.S. exporters interested in the Brazilian market, including agents, authorized distributors, and representatives. Due to the size of the country, it is important for companies to consider key cities and regions for exports as they initially build sales channels and a customer base in Brazil. Other important factors for success include developing a Brazil-oriented marketing strategy and a willingness to develop close relationships with key industry contacts and partners. Fortunately, in Brazil, U.S. products are widely recognized for their reliability and quality, which facilitates introductions to local partners and provides new exporters an opportunity to leverage this reputation for success. 

Brazilian importers generally do not maintain inventory of capital equipment, spare parts, or raw materials, due to high import and storage costs. However, some industries that rely heavily on imported components and parts will maintain larger inventories in bonded warehouses, where import duties and taxes are levied only when they are removed from the warehouse, thus “officially” entering Brazil 

Please see the Brazil Country Commercial Guide Ecommerce Chapter 


Subsidiaries, Joint Ventures, and Licensing.  

Establishing a subsidiary in Brazil presents both rewards and challenges. Benefits include eliminating the need for a customs broker or export agent, access to local government incentives, and access to lower transfer pricing. Opening and maintaining a Brazilian subsidiary is complex, costly, and time-consuming. The commonly accepted timetable for opening subsidiary in Brazil is roughly 36 weeks. This long timeframe reflects the need for most bureaucratic and regulatory processes to be completed consecutively rather than concurrently. It is essential to have a local legal and accounting team to assist in the process of opening of a subsidiary in Brazil.

Franchising 

Franchising has been and continues to be a viable distribution and sales channel in Brazil. The solid franchising market is based on a large and diverse consumer base, growing middle class, and increasing demand for U.S. brands. Successful sectors for U.S. brands include food, health and beauty, home/construction, and education services. Hospitality and tourism also present opportunities for future growth. Franchising in Brazil offers a proven model for U.S. companies to enter the market with local expertise via partnerships with master or regional franchisees. These master and regional franchisors are key to understanding and navigating the cultural, economic, and legal challenges.  

U.S. franchising firms will need to navigate challenges like high import taxes, complex regulations, adjusting to local culture, and accounting for regional economic disparities. Brazil’s size and diverse regions, each with its own consumer habits and purchasing power, require customized approaches to both marketing and operations.  

Franchising in Brazil is governed and regulated by multiple laws and regulations including Law No. 13,966/2019 which provides key provisions for franchise disclosure documentation, guidelines for franchise agreements, exclusivity and territorial rights, and arbitration and dispute resolution. U.S. franchises interested in the Brazilian market also must remain sensitive to the Código de Defesa do Consumidor – CDC (Consumer Protection Code), local labor laws, tax regulations, intellectual property laws, antitrust law. 

The premier Brazilian industry/advocacy group is the ABF Associação Brasileira de Franchising (The Association of Brazilian Franchising). While not a formal legal or regulatory body, the ABF plays a crucial role in the Brazilian franchising ecosystem by supporting the industry, setting voluntary standards, and maintaining ethical guidelines for franchisors in Brazil.  

Direct Selling 

According to Brazilian Direct Selling Associations, 3.5 million people are currently selling in the estimated US$ 9 b sector. Direct selling in Brazil has evolved in recent years, embracing technology that leverages personal connections across social media platforms. Brazilian direct selling, as in other Latin American markets is concentrated in cosmetics and personal care and on platforms like WhatsApp, Facebook, Instagram, and in person.  

Establishing an Office 

Establishing an office in Brazil is a complicated process and is only required for fulfilling government contracts in Brazil. Establishing an office requires a clear understanding of local regulations, tax structures, and business practices. Working with local legal, financial, and administrative professionals is crucial for navigating Brazil’s complex legal and regulatory landscape. 

The basic steps required for opening an office in Brazil include: 

  • Registering for CNPJ (Cadastro Nacional da Pessoa Jurídica): This is the Brazilian corporate taxpayer identification number. All businesses operating in Brazil need to obtain a CNPJ, which allows companies to engage in commercial activities and file taxes.
     
  • Complying with State and Municipal Regulations: Depending on the nature of the business, U.S. firms may need to register with state and municipal authorities to obtain specific operating licenses and permits.
     
  • Registering with the Federal Revenue Service (Receita Federal): This registration is needed for tax purposes.
     
  • Complying with Local Labor Law: Brazil has strict labor laws protecting employees’ rights.  U.S. companies need to comply with regulations regarding contracts, wages, working hours, benefits, and health insurance.
     
  • Contractual Requirements: Business contracts in Brazil must adhere to the Brazilian Civil Code. It is common to work with local legal experts to ensure contracts comply with local laws, especially for commercial transactions, distribution agreements, and labor contracts.
     
  • Securing Regulatory Approvals: Depending on the industry, U.S. businesses may need to obtain special permits, licenses, or approvals from regulatory bodies (e.g., ANVISA for pharmaceuticals and health products, ANATEL for telecommunications, and others).