1 Minas Gerais Business Guide - 2012 | ACMinas
Transcription
1 Minas Gerais Business Guide - 2012 | ACMinas
Minas Gerais Business Guide - 2012 | ACMinas 1 2 Minas Gerais Business Guide - 2012 | ACMinas The 2012 Minas Gerais Business Guide was produced by: ASSOCIAÇÃO COMERCIAL E EMPRESARIAL DE MINAS - ACMINAS Conselho de Assuntos Internacionais (Commercial and Entrepreneurial Association of Minas - Foreign Affairs Council) Av. Afonso Pena, 372 - Belo Horizonte / MG - Brazil - 30130-001 www.acminas.com.br Roberto Fagundes - ACMinas President Silvio Soares Nazaré - Foreign Affairs Council President Luiz Fernando D. Moura e Castro - Organizor/International Analyst Leonardo Faria Lima - Colaborator/Economic Advisor FAZ! Comunicação - Graphic Design Abelhaazul - Translation Printing - Formato From Minas to the World The 2012 Minas Gerais Business Guide, is a publication of the Commercial and Entrepreneurial Association of Minas that is now in its third edition. This international business guide is aimed at disclosure of services, products and business opportunities and investments in the State of Minas Gerais, Brazil, having its distribution aimed at foreign governments representatives, chambers of commerce, businesses and international organizations, as well as focal points such as hotels and airports. The purpose of this guide is to become a reliable source of information, presenting a comprehensive overview of the economic scenario of the State, which included a comprehensive mapping of its private sector, including small, medium and large businesses as well as the description of the legal procedures on investment inflow. It therefore represents a further contribution of ACMinas in the efforts expended by the private sector and the state government in favor of business expansion and definitive globalization of Minas Gerais. This is a role, incidentally, in which the entity has a key part as a historical player: ACMinas was, for example, where we first spoke about the construction of the Belo Horizonte International Airport in Confins, about the Expominas Exposition Center and about the design and structuring of a intensively organized system capable to explore the enormous economic potential of the State. By taking the initiative of publishing this Guide, ACMinas continues an on-going sequence to a long history of collaborative action aimed at the perpetuation of the results already obtained by Minas Gerais in the process of developing and opening up new opportunities for business and investments. I am positive that the Minas Gerais Business Guide will provide you with useful information about Brazil and the potential of Minas Gerais. Roberto Luciano Fortes Fagundes | ACMinas President Minas Gerais Business Guide - 2012 | ACMinas 6 Minas Gerais, a land of possibilities Luiz Fernando D. Moura e Castro ACMinas International Analyst Leonardo Faria Lima ACMinas Economic Assessor In 2010, the economic power of Brazil´s image is already enshrined in the international market. It reflects a rapidly growing domestic economy, with big international aspirations, economic and political, seemingly beyond their reach. But these aspirations do not come out of the blue. They were built over the last ten years through effective government policies, but mainly supported by a private sector hungry for new market opportunities. Foreign Investments in Minas Gerais (2001 through 2010) Sectors Total 2001 - 2010 (US$) Growth % Mining 14,774,328,713 49,69% Steel Industry 7,355,397,188 24,74% Automotive 4,209,305,857 14,16% Chemical 951,466,520 3,20% Services 735,238,478 2,47% Non-metallic 432,944,888 1,46% Energy 362,787,040 1,22% Agribusiness 207,823,936 0,70% Metallurgy 198,574,898 0,67% Electronics 161,589,943 0,54% Mechanical 145,882,535 0,49% Textile 76,684,311 0,26% Furniture 75,022,686 0,25% Footwear and leather 35,860,333 0,12% Electrical 10,250,758 0,03% Total 29,733,158,086 100,00% Source: INDI / ACMinas Economic Department The economic capacity of some regions in this country and some sectors of the economy are already known around the world. However, Brazil still has a lot of potential to be exploited by and for the global market. The State of Minas Gerais represents this growing potential in the last decade. In its underground bubbles the mineral potential of the state, while in its major cities and its capital, Belo Horizonte, tech companies take root in large office buildings in an ever growing city. Minas Gerais is located in Brazil´s southeastern region. The state is in a mountainous area with a pleasant climate, and home to peaceful and receptive people. However, the peaceful character of the state residents is not consistent with the aggressiveness of their business, always looking to stay abreast of the latest market trends, investing in innovation, new products and methodologies for sustainable growth. This attitude is one of the major market potentials of Minas Gerais for the foreign investor. In retrospect of foreign direct investment (FDI) in the State during the last decade and the growth of the sectors that received such investments, it is possible to have an overview of the opportunities in Minas Gerais. Minas Gerais Business Guide - 2012 | ACMinas According to data from the government agency supporting and attracting foreign investment, INDI (Institute for Integrated Development of Minas Gerais) the flow of FDI in Minas in the last 10 years was US$ 29,733 billion. This corresponds to an impressive growth of 435% over the previous decade. From this amount, 50% went to the mining sector, equivalent to US$ 14,774 billion. In addition, other sectors such as steel, automotive, chemical, furniture, textile and services also stand out as attractive FDI between 2001 and 2010. During this period, 2010 was the year the state received the largest volume of foreign investment, or US$ 18,847 billion (63.39% of total), an increase of 1,519% over 2009 (US$ 1.164 billion). The considerable growth of FDI in Minas Gerais reflects two factors: 1) the foreign investor’s confidence in the Brazilian economy, gained through a governmental economic pol- 7 icy with firm foundations, 2) the strength of the domestic market, whose demand for new products and services grows every day. The internal Brazilian market has grown in recent years mainly due to annual salary increases (above inflation) and government policies to eradicate poverty. These national economic incentive policies were replicated in Minas Gerais, decreasing poverty levels in the state and increasing the strength of its domestic market with the new Brazilian middle class. Another highlight of Minas Gerais State at the national level is the differential growth of its Gross Domestic Product (GDP) that grew 10.9% in 2010. The performance of Minas Gerais was 3.4 percentage points above the national result of 7.5%. The differential growth of GDP of this state was primarily due to the increased value MINAS GERAIS Area 558.384 km2 Geography Mountainous Municipalities 853 Capital Belo Horizonte Mean annual temperature 21°C - 69° F Population (2010) 19,597 million Highways 269.545,5 km Railroads 5.322 km GDP US$ (2010) 196, 443 billion GDP per capita US$ (2010) 9.721 Economically active population (2009) Source: INDI / ACMinas Economic Department 11,215 million Minas Gerais Business Guide - 2012 | ACMinas 8 of agricultural commodities, steel and iron ore, influenced by the strong pace of exports to China. But it is important to note that there are other influential sectors such as the mining services sector. FDI in this sector grew by more than 16,000% over the previous decade (1991-2000), reaching a total of US$735 million. The culmination of this investment was measured in 2009, when the sector received US$ 461 million (62% of the total) FDI. Minas Gerais ranks as a state full of FDI potential, presenting an overview of diverse sectors in which to invest. For example, only in the first half of 2011, more than US$1 billion was announced in ten major sectors, totaling 60 different projects and generating over 18,000 jobs. The amount announced in 2011 already accounts for 35% of the total FDI in the ten year period between1991 to 2000. At the municipal level, Belo Horizonte is the largest city in the state and also its capital. As a service center, the city has the largest number of companies active in Minas Gerais, with a total of 260,836 companies accounting for 34.49% of the total state enterprises. The city is only 114 years old, and has the Brazilian headquarters of large multinationals such as Fiat in the automotive industry and the giant Google in the information technology sector, besides being surrounded by large mining companies like Vale and Anglogold. Business tourism is another strong point for Belo Horizonte; the city hosts national and international events in various sectors in different areas, and is prepared and ready to receive them. Finally, with the approach of major sporting events, the Total Investments Announced - 2011 Volume (thousant US$) % Jobs Created % Projects % 1.438.082,62 6,59 13.983 27,96 31 15,58 AUTOMOTIVE 69.163,89 0,32 632 1,26 4 2,01 SHOES AND LEATHER 12.582,57 0,06 1.000 2,00 1 0,50 TRADE 25.228,06 0,12 532 1,06 5 2,51 EDUCATION 1.447,00 0,01 0 0,00 2 1,01 ELECTRIC 342.466,18 1,57 1.592 3,18 8 4,02 ELECTRONCS 52.664,67 0,24 933 1,87 25 12,56 ENERGY 673.192,83 3,08 365 0,73 10 5,03 1.405.185,91 6,44 0 0,00 3 1,51 INFRASTRUCTURE 437.760,30 2,01 58 0,12 6 3,02 MECHANICAL 439.903,58 2,02 3.776 7,55 12 6,03 METALLURGY 161.820,54 0,74 1.431 2,86 7 3,52 8.068.624,72 36,97 3.515 7,03 7 3,52 FURNITURE 520.918,53 2,39 500 1,00 1 0,50 NON-METALS 225.203,52 1,03 869 1,74 4 2,01 R&D 14.029,57 0,06 0 0,00 2 1,01 5.384.647,49 24,67 11.423 22,84 42 21,11 108.732,31 0,50 0 0,00 8 4,02 SECURITY 943,69 0,00 150 0,30 1 0,50 SERVICES 546.270,86 2,50 6.066 12,13 10 5,03 1.484.743,63 6,80 0 0,00 1 0,50 TEXTILE 169.367,73 0,78 2.990 5,98 6 3,02 AIR TRANSPORT 243.913,18 1,12 200 0,40 3 1,51 21.826.893,37 100,00 50.015 100,00 199 100,00 Sector AGRIBUSINESS GAS MINING CHEMICAL HEALTH STEEL TOTAL Minas Gerais Business Guide - 2012 | ACMinas covering activities ranging from supply of raw materials and equipment to providing services. Other areas of interest are Information Technology, Wood and Furniture, Textile & Garments, Tourism, Production Associated with Tourism, Retail Trade, Agribusiness and Services. Belo Horizonte is also surrounded by historic towns, dating from the eighteenth century. Mariana, Tiradentes and the former capital of our state, Ouro Preto (recognized by UNESCO as a World Heritage Site), are just some of the cities that shape this tourist and historical complex that dates back to colonial Brazil. The text, data and articles that follow in the 2012 Minas Gerais International Business Guide touches in greater depth on these and other capabilities found in Minas Gerais. They were written by international relations and foreign trade agents making up the mosaic of the potential found in the State of Minas Gerais. Every agent is committed to assist and ease the work of foreign investors who want to enter the Minas Gerais market. They make themselves available and provide information on your area of expertise. Throughout this Guide more useful information about agents who act in Minas Gerais and the state market will be provided. Source: INDI - Updated through 31/12/2011 2014 World Cup and the 2016 Olympics in Rio de Janeiro, the city’s hotel network has been expanding and is modernizing in order to receive the wave of tourists. These investments are still being made, opening a new front for FDI. According to mapping commissioned by government agencies with the Getúlio Vargas Foundation, Belo Horizonte is the capital in Brazil with more business opportunities looking to the 2014 World Cup. The study found 699 opportunities in nine sectors of the economy to be explored before, during and after the sporting event. The construction industry is the sector which offers the most opportunities, ACMinas ACMinas is much more than a class entity. That is how you can define the Commercial and Entrepreneurial Association of Minas, which for over a century (since 1901) operates in pursuit of development with social justice. The entity’s mission is to meet the needs of businesses and entrepre- neurs with ethics and competence through institutional representation and services provided. The Commercial and Entrepreneurial Association of Minas has a wide range of products and services designed to expedite business management, bringing greater flexibility and convenience for the companies in this state, especially those associated with this entity. International Affairs Council The purpose of the International Affairs Council is to effectively contribute to improve the integration of enterprises, businessmen and the image of the State of Minas Gerais in Brazil and abroad. Their tools are the exercise of business intelligence and international relations. The International Affairs Council is available to investors, government officials and foreign businessmen 9 who want to know the market and the possibilities offered in Minas Gerais. For more information on the articles and institutions presented here, contact us. Associação Comercial e Empresarial de Minas (Commercial and Entrepreneurial Association of Minas) Adress: Av. Afonso Pena, 372m Centro, Belo Horizonte, MG, BRAZIL CEP: 30 130 001 Telephone: +55 31 3048 0703 www.acminas.com.br [email protected] Minas Gerais Business Guide - 2012 | ACMinas 10 indi Minas Gerais The State of : A prominent location for Investment Minas Gerais offers several competitive advantages to investors interested in setting up production units or expanding operations. Together with its geographic position in southeast Brazil, the main consumption center of the country, the State also represents a pathway between the Midwest and Northeast regions, offering a logistical advantage to entrepreneurs compared to other Brazilian States. The most extensive highway and railway networks in Brazil, which connects the State to the main seaport complexes, are located in Minas Gerais, as well as the first industrial airport in the country. Minas Gerais government supports the investor in working force training, research and development projects. It also offers credit lines to meet financial demands of investment, allows special tax treatment, and offers a reliable energy infrastructure and an operational development system focused on quickly meeting the demands of entrepreneurs, through the Minas Gerais Institute of Integrated Development (INDI). The State was a pioneer in establishing Private Public Partnerships (PPP’s) in Brazil, having made the first concession of a State highway, transferring operation of MG-050 road to the private initiative. Minas Gerais government has been working on other potential PPP’s, to open new possi- bilities for private investment in the State, including the “Mineirão” soccer stadium. In addition, companies interested in locating in the northern portion of Minas Gerais or in the Jequitinhonha and “Mucuri” River valleys are eligible for federal tax incentives provided by the Northeast Region Development Authority (SUDENE) and loans granted by the Bank of the Northeast of Brazil (BNB). As a consequence of this set of natural and institutional attractions combined with a focus on promoting private investment, Minas Gerais was the Brazilian State that attracted more direct investment from 2003-2010 according to Ministry of Development, Industry and Foreign Trade (MDIC). During this period, the amount of announced investments that were recorded by INDI reached US$143 billion1. These investments are reached all State regions and productive chains. However, due to their economic dynamics, the most benefited areas were the Central and “Rio Doce” regions (44.05% and 10.8% of the total announced), followed by the “Triângulo” (6.31%), Northern Minas Gerais (5.22%), “Zona da Mata” (4.97%), Southern Minas Gerais (2.39%) and the rest of the State (21.31%). In this last case investments on transportation and energy infrastructure are included. The Central region stands out in this sce- nario as the most dynamic area of the State due to the fact that its economy is based on capital-intensive productive chain industries, such as mineral-metallurgical and automotive. In addition to the large-scale investments naturally attracted due to its production structure, the Central region, due to economic growth, income improvement, high demographic density and a skilled labor force, has benefitted from a high number of investment projects of companies operating in the diverse services sector, such as health, education and trade; and in knowledge-intensive sectors, like information technology, software and biotechnology. The “Rio Doce” region, especially the “Vale do Aço”, has benefitted from investments made by companies operating in the mineral-metallurgical sector, in pulp production and in real estate projects. In the “Triângulo Mineiro”region, the main projects are tied to the agribusiness sector. There was a large expansion of sugar ethanol industry in this region during the 2003-2010 periods. Among the projects being implemented there, Dow Chemical/Crystalsev stands out, which will be the world´s largest biopolymers investment, filling a gap still existing in the State’s ethanol/chemical industrial matrix. The investments in Northern Minas Gerais will create a new iron ore productive chain in the State. Other important projects planned during the period were: the establishment of a biodiesel plant by Petrobras S/A, the capacity expansion of “Novo Nordisk Produção Farmacêutica do Brasil Ltda.”, the main biotechnology company in Minas Gerais, the establishment of an agroindustrial unit by the “Sada Group” and an electrical power production unit by “Arcadis Logos Energia S/A”. Southern Minas Gerais differs from the other regions of the State due to the large number of projects attracted, the number of municipalities benefitting from announced investments and the high number of jobs generated from invested capital. This occurs because the productive chain and prominent are less capital intensive and more labor intensive. In addition to investments in the traditional fields like agribusiness and textiles and clothing, Southern Minas Gerais has attracted a large number of electro-electronics projects. Historically, the electro-electronic sector in Southern Minas Gerais was restricted to the Electronics Valley in “Santa Rita do Sapucaí”city but, currently, it has also spread to other micro geographical regions like Varginha, Pouso Alegre and Itajubá. Projects that stand out in other parts of the State include those of “Vale Fertilizantes”, in Patrocínio city (“Alto Paranaíba region”), “Rio Paracatu Mineração” in “Paracatu” city (Northeastern Minas Gerais), “Bioenergética Vale do Paracatu S/A”, in “João Pinheiro” city (Northeastern Minas Gerais) and the installation of the “Irapé” power plant by Cemig in the “Jequitinhonha” River Valley (“Jequitinhonha/Mucuri”). In order to support continuation of this investment cycle, Minas Gerais government has carried out important structural projects to improve State infrastructure. Among this set of initiatives, the investments related to sanitation stands out for their large social and economic scope, as well as the benefits they provide for population significantly increasing water supply and sewage systems in all regions. Another important project is “Proacesso”, which resulted in paved access for almost all 853 State municipalities to the national highway network and “Pro-MG” which restored State highways. In 2011, as a result of the infrastructure improvements and social advances achieved over the last decade, together with the continuing development policies of the State government, Minas Gerais remains an important location attracting private investment at the national level. In the period from January to October 2011, INDI recorded close to US$16,8 billion2 in investments for the State. Last year, the regions that received most of the investments were: Central region (53%), “Alto Paranaíba” (16%), “Triângulo Mineiro” (14%) and Southern Minas Gerais (6%). The economic sectors that attracted more investments were: mining (39%), chemicals (14%), non-metallic minerals (13%), natural gas (7%) and agribusiness (7%). 11 INDI is the most traditional investment promotion agency in South America, with 44 years of activity, being considered, consequently, a model for the creation of similar institutions by other Brazilian States. The institute is tied to the State Secretary of Economic Development (SEDE) and is supported by the State Electrical Company (CEMIG) and the Minas Gerais Development Bank (BDMG). INDI provides assistance to investors interested in establishing production units in Minas Gerais and supports projects already installed in the State, helping them expand, relocate and increase competitiveness. All the work developed by INDI is carried out at no cost to investors. Instituto de Desenvolvimento Integrado de Minas Gerais - INDI (Minas Gerais Institute of Integrated Development - INDI) Cidade Administrativa Rod. Prefeito Américo Renê Gianetti - Serra Verde, Belo Horizonte / MG - BRAZIL CEP: 31790-160 Telephone +55 31 3915-2866, http://www.indi.mg.gov.br. e-mail: [email protected] 1 - Ptax closing rate in January 6th, 2012. 2 - Ptax closing rate in January 6th, 2012. Minas Gerais Business Guide - 2012 | ACMinas 12 Belo Horizonte & Metropolitan Area Area 330,2 km2 Mean annual temperature 21º C Population (2010) 6,234 million Minas Gerais Business Guide - 2012 | ACMinas Belo Horizonte: A City of Opportunities HDI 0,880 Distance by Highway Brasília - 740 km Rio de Janeiro - 435 km São Paulo - 586 km Vitória - 540 km Distance by Railroads Rio de Janeiro - 561 km São Paulo - 845 km Vitória - 705 km GDP US$ (2008) 26,518 million GDP per capta (2008): 7.313 Economically active population (2009): 2,923 million 13 Rodrigo Perpétuo International Affairs Secretary Belo Horizonte, the country’s first planned city, a metropolitan center that is home to nearly 5 million people, a metropolis which is experiencing a time of positive transformatxion, consolidates its position today as a city of opportunities. The construction of a city that is attractive to business is not a mono-causal phenomenon. One can list some factors and initiatives that contribute to this process: appropriateness of the urban infrastructure, quality of public policies that promote social inclusion and local development, a lifestyle that combines tradition, sophistication as well as simplicity and modernity, in a time of political and economic stability Public and Private Partnership (PPP) Type of contract Investment Sanitary Landfill Administrative 49,69% PPP R$ 760 million 24,74% Barreiro Metropolitan Hospital Administrativa PPP R$ 234 million Qualification of the Infrastructure Network of Elementary Education of the City Administrative PPP R$ 150 million at the national level. Another success factor that should not be overlooked is education. Belo Horizonte is proud to be home to some of the best institutions of higher education in the country. In Belo Horizonte we have FDC Fundação Dom Cabral, ranked as the 5th best business school in the world, in customized courses, according to the 2011 Executive Education ranking of the Financial Times; PUC-Minas, Catholic University which is the best university in the state according to IGC - General Index of Courses of the Ministry of Education of Brazil, and UFMG - Federal University of Minas Gerais, received for the third consecutive year the highest IGC classification, combining an environment conducive to innovation with a highly qualified pool of applicants. In addition to the opportunities directly linked to the services in the mining industry, base of the economy in the State of Minas Gerais, the state capital also stands out in fashion, design and gemstones, business tourism, construction, automotive industry and technology and biotechnology - since 1999, BiominasBrazil, located in BH, is a private institution dedicated to promote and develop biotechnology and life science businesses in the country. But the personnel in the Belo Horizonte City Hall believe that we must go further. So, without giving up the continuous improvement of public policies through various cooperative activities, PBH (Belo Horizonte City Hall), based on rigorous short, medium and long term planning (www. pbh.gov.br/bhmetaseresultados) advances to consolidate a broad portfolio of public-private partnerships that will allow for a new milestone in the relationship of the municipal government with the private sector to promote local development. In this sense, organizations such as the centennial ACMinas play a key role in promoting what is in the best interest of the city and its government: “Development with Social Justice”. The integration between people, companies, cities, organizations and countries around the world is now a reality. The speed of technological and communication advances in the globalization era, a growing interaction between different cultures. Belo Horizonte fits more in this scene of intense cultural and commercial exchanges. Municipal International Relations Assistant Secretariat The inclusion of our capital in the international community is the direct responsibility of the Assistant Secretary for International Relations, linked to the Secretary of Municipal Development. The agency shall work so that Belo Horizonte remains an attractive center for major international events and will also undertake actions that may contribute to local economic and social development. The Secretariat is responsible for establishing and maintaining relationships and partnerships with international multilateral agencies, sister cities of the Municipality of Belo Horizonte, among other networks and organizations, to formulate, plan and coordinate, in conjunction with other agencies and government entities, policies and actions aimed at raising funds and negotiating with the international bodies and institutions; provide technical support to the Administration in the development and drafting of agreements and international cooperation projects among others. Secretaria Municipal Adjunta de Relações Internacionais Secretaria Municipal de Desenvolvimento (Municipal International Relations Assistant Secretariat Municipal Development Secretary) Address: Av. Álvares Cabral, nº 200, 10th floor - Centro CEP: 30170-000 Belo Horizonte, MG, Brasil Telephone: +55 31 3246 0027 / 0031 / 0032 [email protected] www.pbh.gov.br/international Twitter: twitter.com/smari_bh 14 Minas Gerais Business Guide - 2012 | ACMinas Minas Gerais Business Guide - 2012 | ACMinas 15 Minas Gerais breaks historical records in exports With support from the State Government through investments in infrastructure, tax incentives and projects for the development of export, products “made in Minas Gerais” are winning over the world as the word gets out. Minas Gerais has experienced in recent years, a tremendous growth in foreign trade, not only in total exports and imports value, but also the diversification of our export basket with the inclusion of new cities and companies from this state in foreign markets as well as the number of countries of destination and origin. In 2010, for the first time in history, the state surpassed US$31 billion in exports, an increase of 60% compared to 2009. As the second exporting state (behind only São Paulo), Minas Gerais had growth above the national average. In 2010, state participation in total Brazilian exports was, on average, 15.5% above the same period from the previous year (12.8%). But this state´s trade balance exceeded US$ 21 billion, a growth of 74.7% compared to 2009 and even higher than the total balance of the country, which was US$ 20.27 billion. The latest data shows this state´s exports for the first half of 2011 totaled US$ 18.68 billion - a growth of 51.5% over the same period in 2010 - 32.6% higher than the growth of national exports. As a result, the state share of the total in Brazil´s exports increased to 15.8% (it was 15.5% in 2010 and 10.3% in 2003). In the same period, the trade balance of Minas Gerais was US$ 12.92 billion while the national balance was US$ 12.98 billion; a growth of 63.2% over the first six months of last year. The Export Agenda - Although Minas Gerais is characterized as a major exporter of iron ore and coffee (representing 56.4% of the total exports by the state), the export basket has been enhanced by the inclusion of high technology products and services - particularly in the software and engineering areas- as well as products with higher added value, including the entire food chain, especially fruits, pasta and beverage. In 2010, 258 municipalities of Minas Gerais exported 2,874 different products to 182 countries. The main destinations were China (leading for the third consecutive year), Japan, Germany, USA, Argentina, Netherlands, United Kingdom, Italy, South Korea and Belgium in that order. The Middle East has also increasingly acquired food products, minerals, fashion goods, industrial products and services from Minas Gerais. All this diversification is evidence that exporting is not restricted to large companies. Indeed, the large companies are a minority when we analyze all the exporting companies in the state. Although mining and metallurgy account for 51.6% of the export value, of the 1664 companies that exported in 20091, 1071 were micro and 16 small businesses. On the agenda of micro and small companies are mainly textiles, metals, gems, jewelry, electrical, electronics, chemicals, machinery, and mechanical appliances. Thus, it is clear that while most products exported by large companies in Minas Gerais are commodities, exports from this states´ micro and small companies are mainly composed of products with higher added value, often with a high degree of industrialization. Investments - Aware of the evolution in the new economy, the State Government invests in the development of the Tancredo Neves International Airport (AITN), which exceeded seven million passengers in 2010, with an increase of domestic connections and opening new flights to Europe, United States, Central America and South America. With the large dimensions of the airport site for company installations, the International Airport is the first in Brazil to operate in the customs-airport industry regime. Under this new concept, the airport has aircraft maintenance centers and companies in the aeronautical sector. All this growth is not by chance. The State Government has been investing heavily in export promotion. An example was the creation in 2004 of Exportaminas. A public-private development and promo- Minas Gerais Business Guide - 2012 | ACMinas tion of this state´s foreign trade, Exportaminas Center was created by the State Secretariat for Economic Development and includes in its network of partners the Institute for Integrated Development of Minas Gerais (INDI), the Federation of Industries in Minas Gerais (FIEMG), the Federation of Agriculture and Livestock of Minas Gerais (FAEMG), the Brazilian Service of Support to Micro and Small Enterprises of Minas Gerais (MG-SEBRAE) and Stock Exchange, Commodities and Futures (BM & F Bovespa). Projects - The Exportaminas Center provides free services to Brazilian and foreign entrepreneurs interested in increasing their international business; it operates as an intelligence unit, promotes international trade and manages a series of projects for the development of state exports. All projects are coordinated by the Exportaminas Center in line with the Minas Gerais Foreign Trade Strategic Map. The map defines the vision and establishes a shared strategy for Minas Gerais State trade by 2030. Minas Gerais is the only Brazilian state that has a specific strategy for foreign trade. “Under this umbrella are projects on extensionism, training, globalization of Micro and Small Companies, promotion of international trade, competitive intelligence, exportpilot, as well as projects focused on spe- cific sectors such as horticulture and the ‘Perishables’, ‘Food Clusters’, ‘Marketing in the Arab World’ projects, among others,” according to Jorge Leonardo Duarte de Oliveira, Exportaminas Center Director. RTPO - The Exportaminas Center is the first Brazilian institution to participate in the Regional Network of Trade Promotion Organizations (RTPO), established in 2008. The network brings together 17 government agencies at sub-national levels in 13 countries. Their affiliation occurred during the General Assembly in November 2010 in Johannesburg, South Africa, and was unanimously approved. The outlook for 2011 is to participate in the agenda of cross trade marketing, professional exchanges and joint funding resources from international agencies, among other projects. Another important project is an Exportaminas participation in social networks like Twitter, Facebook, LinkedIn, Slideshare and in particular the social network aimed at partners, students and professionals related to their projects: www.exportaminas2030.net. In the network, the participants discuss initiatives of interest to the state export trade. 1 - We do not have consolidated data for 2011. Minas Gerais Business Guide - 2012 | ACMinas 17 Exportaminas Center The Exportaminas Center - linked to the Special Coordinator for Foreign Trade of the State Secretariat of Economic Development - was established in 2004 by the State of Minas Gerais in order to simplify exports, expanding opportunities for state products in the international market. Its mission is to promote sustainable economic development of Minas Gerais by attending to the exporters from our state and international commercial promotion of Minas Gerais State, providing a more competitive environment, generating employment, income and reducing regional inequalities. As institutional partners, it has the Instituto de Desenvolvimento Integrado de Minas Gerais - INDI (Institute for Integrated Development of Minas Gerais), the BM & F Bovespa (Commodities and Futures Exchange), the Federação da Agricultura e Pecuária do Estado de Minas Gerais - Faemg (Federation of Agriculture and Livestock of Minas Gerais), Federação das Indústrias do Estado de Minas Gerais - Fiemg (Federation of Industries of Minas Gerais) and Serviço Brasileiro de Apoio às Micro e Pequenas Empresas de Minas Gerais - Sebrae (Brazilian Service to Support Micro and Small Enterprises in Minas Gerais). Among its services are: - Provide free assistance to state entrepreneurs in their exporting efforts; - Identify new opportunities for integration in the international market of products and services for companies in our state; - Promote the integration of state enterprises in global markets; - Contribute to the consolidation of functional structures within the State to expand the diversification of the export base; - Coordinate and / or enter into partnership interests of international trade; - Contribute to the provision of new services and improvement of legislation that aims to add value to export products and services; - Provide conditions to increase the amount exported and imported through customs units in Minas Gerais; - Develop projects to increase the competitiveness of companies in Minas Gerais; -Foster relationships and cooperation with national and international credit; - Participate in international events Central Exportaminas Coordenação Especial de Comércio Exterior - Secretaria de Estado de Desenvolvimento Econômico Governo de Minas Gerais, Brasil (Exportaminas Center Special Coordination of Foreign Trade - State Department of Economic Development Government of Minas Gerais, Brazil) Address: Av. Afonso Pena, 2910 Térreo, Centro Belo Horizonte MG BRAZIL. CEP 30130-007 Telephone: +55 31 3269-5500 www.exportaminas.mg.gov.br email: [email protected] Minas Gerais Business Guide - 2012 | ACMinas 18 Minas Gerais and China, exploring new markets: coffee and cachaça CHINA & MINAS GERAIS The Sino-Brazilian relations have intensified each year, jumping from US$ 2.3 billion in 2000, growing by approximately 1000%, exceeding the threshold of US$ 20 billion. In addition, the future is even more promising. Projections indicate that bilateral trade will reach US$ 35 billion in 2011. With these results, China is now Brazil´s 2nd largest trading partner, and establishes itself as an attractive and competitive market for the business community. On the global level, China is the country with the highest level of growth in the last 25 years and today has become the 2nd largest power in trade volume and the second in GDP purchasing power parity. Over the past few years, Minas Gerais has drawn the attention of foreign investors, especially the Chinese, who invested US$10 billion in this state in FDI between 2003 and 2011. Companies in the Coffee, Infrastructure and Construction sectors begin to gain prominence in the diversification of the relations between Minas Gerais and China, traditionally oriented toward businesses in the Mining and Metallurgy sectors. The Sino-Brazilian relations have excellent prospects and on-going visits of Brazilian and Chinese delegations open up opportunities for trade exchanges, investment and partnerships. As an example, in July 2011, Belo Horizonte, the State Capital, received a delegation of businessmen and government officials from the city of Nanjing, a large Chinese financial and commercial hub, seeking partners in Infrastructure and Transport sectors. On the other hand, the Brazil-China Chamber of Commerce and Industry (CCIBC) followed a group of businessmen and coffee producers in the state participating in the 2011 International Coffee Industry Exhibition in China. The corporate mission has identified a large Chinese interest in Brazilian coffee, but also the need to disclose the characteristics of different coffees produced in the country since the main obstacle to export coffee to China is the lack of information from Chinese buyers. In this sense, CCIBC is developing a project that maintains contact with about 60 Chinese importers and passes information about the coffee produced in Minas Gerais, and intends to invite them on guided tours of properties producing coffee in our state. In addition to coffee, another product of great interest to the Chinese identified by CCIBC is high quality Cachaça (alcohol distilled from sugar-cane, comparable to rum), the main ingredient of the famous Brazilian Caipirinha. Minas Gerais already exports it to Europe with great success. Several Brazilian brands of Cachaça have started their integration in Eastern markets, including the Chinese market, and the results have been very good. However, a study conducted by CCIBC showed that changes in the beverage and packaging are often required to suit the culture and custom of alcohol consumption in China, as the alcohol content, for example, which in China is generally higher than in Brazil. Ypioca Cachaça produced in northeast Brazil, for example, now sells in China for about US$40 a bottle while Cachaça 51 is marketed in Australia for up to AUS $ 50 In general, it has been observed that as the various branches of the industry Minas Gerais Business Guide - 2012 | ACMinas in this state gained importance, new markets are opened, enabling the creation of new businesses and stimulating the economy of the State of Minas Gerais as a whole. For instance, more than investment for the acquisition of mines and power stations, the state also received investments for food production. The largest consumer of food in the world due to its population of over 1.3 billion people, China has less than 15% of arable land in its territory, a number that is falling in recent months due to its expanding population and industry. Thus, Brazil is one of the strategic partners to maintain the food supply for the Chinese and even the Minas Gerais traditional treat, the “pão de queijo” (cheese bread), is already being introduced into the Chinese market. However, the good business opportunities are not restricted to 19 typical Brazilian food, but all ingredients in Chinese cuisine, be it traditional or westernized to some degree. Brazil-China Chamber of Commerce and Industry With 24 years in the market, the Brazil-China Chamber of Commerce and Industry (CCIBC) has promoted closer commercial ties between Brazil and China. In order to increase the business of our associates, our team works on several fronts: incoming Chinese and Brazilian delegations, scheduling and encouraging meetings, fairs and events, conferences and business meetings, training, trade missions to China, scheduled visits, dissemination of information on Chinese and Brazilian companies, research in China from Chinese suppliers and potential buyers of domestic products, in addition to the disclosure in our bilingual Portuguese-Chinese site (www.camarabrasilchina.com. br), of services and products of our affiliates. In each area, the CCIBC unites its efforts, to help our associates as much as possible. We customize the job with our partners according to their market needs, assisting in the development of a special strategy for the Chinese market. There is a lot that both countries can offer each other, and we hope that your company can be a part of these opportunities through our help Thus, we are available to answer your questions and we hope to begin a prosperous partnership. Câmara de Comércio e Indústria Brazil - China (CCIBC) (Brazil-China Chamber of Commerce and Industry) Address: Rua Felipe dos Santos, 521, 805, Lourdes - Belo Horizonte / MG, BRAZIL. CEP: 30140-060 Telephone: +55 31 2552-7414 Email: [email protected] www.ccibc.com.br Minas Gerais Business Guide - 2012 | ACMinas 21 Minas Gerais Business Guide - 2012 | ACMinas 20 Minas Gerais and India: A Growing Partnership INDIA & MINAS GERAIS Minas Gerais has become a preferred destination of several companies seeking to expand their business markets. With the state’s economy growing at promising rates, the demand for products and services increases, and those who provide these services must advance and innovate alongside the market in order to sustain growth. The state has a widely diversified economy that enables growth across various sectors. As the second most industrialized state of Brazil, Minas Gerais has an economic and financial stability that is directly reflected in the GDP, the optimum balance of trade results, and the growth of foreign investments. India, due to its wide range of products, can become an even greater partner in the estate. In 2010, Minas Gerais’ exports to India totaled approximately US$140 million (FOB), and imports totaled approximately US$150 million (FOB) across various sectors. Brazil is proud to have become the second leading market of interest (behind China) from the BRIC countries (Brazil, Russia, India and China) in terms of investment industry with private capital and of venture. The main areas of potential growth between India and Minas Gerais are: Mining The mining sector is an anchor of Minas Gerais’ economy, and is forecasted to continue to grow substantially. Minas Gerais is responsible for 44.05% of Brazil’s mineral production, largely due to the growing interest of companies in the exploitation of large reserves of iron ore, gold, diamond, phosphate, zinc, and ornamental rocks, amongst others. Influential mining companies that are already present in Minas Gerais include ArcelorMittal, Ferrous (NMDC), and BEML, amongst others. Information Technology - IT The IT sector in Minas Gerais is growing at a rapid pace. In the last seven years, the sector has grown by 385%, and in 2010 alone, the sector’s revenues reached US$1.6 billion. Over the course of 2007 - 2010, US$ 9 million was invested in projects of Local Productive Arrangement (APL). Because of the World Cup in 2014 and subsequent necessary adjustments that Belo Horizonte and the state of Minas Gerais will implement, the IT industry is increasingly investing in infrastructure and skilled manpower to meet the growing demand from the companies of Minas Gerais. As companies from Minas Gerais are increasingly becoming aware of the necessity of technology in modernizing and leveraging their business, the IT sector in this state has experienced remarkable growth, and many high-profile Indian companies have established subsidiaries in Belo Horizonte, such as Aptech, a company that develops training activities for professional careers in IT since 1986; and Infosys, an IT company with an extensive range of products, and recognized worldwide for its work. Automobile Minas Gerais is home to the second largest fleet of vehicles in Brazil, representing about 30% of the national production. The presence of the largest automobile companies of Brazil in Minas Gerais has attracted a multitude of auto parts manufacturers to Minas Gerais. Both Fiat and the Indian company Tata Motors have signed partnerships in this sector. Beverage The exportation of the Brazilian drink “Cachaça” has grown significantly in recent years, and Minas Gerais, which produces a well-known and artisanal “Cachaça”, has brought numerous investments to this sector, spurring growth and job creation in many inner cities which are home to concentrations of large numbers of producers. In 2010, exports of “Cachaça” from Minas Gerais accounted for 10% of the country’s total exports of this product. Recently, India has become one of the destinations of the “Cachaça” exports from Minas Gerais. Steel Production Minas Gerais is responsible for 35.6% of the total Brazilian production of crude steel. Due to the restructuring processes of many companies which allows for reduced costs and greater added value to production, Minas Gerais’ steel sector offers competitive prices and flexibility in trading. The five largest Brazilian steel producers are located in Minas Gerais. INDIA BRAZIL CHAMBER OF COMMERCE The India-Brazil Chamber of Commerce (IBCC) was created in November of 2003 with the support of the A.H. Indian Consulate in Minas Gerais. The Chamber has as its main goal to instigate and consolidate commercial, industrial, agricultural and economic relations between India and Brazil, celebrating agreements, developing business, and orienting and helping its associates. In this sense, the IBCC offers specific professional assistance in all relative matters concerning the Brazilian-Indian relations, putting our operational infrastructure at our associate’s services. As a competitive advantage, the IBCC has strategic contacts in India and Brazil, profound knowledge of both cultures, and great capacity to explore the Indian market. Throughout the year, the Chamber promotes numerous meetings which aim to consolidate the relations between both countries and to organize missions to India. The IBCC has been influential in initiating and establishing many successful cases of joint ventures between Brazilian and India companies. The results of our work can be seen in the joint venture between the Brazilian group EMBRASIL and the Indian group Sabero; Marcopolo’s partnership with Tata Motors to construct the biggest bus plant in Lucknow, India, and other important achievements. Câmara de Comércio Índia- Brasil (India-Brazil Chamber of Commerce) Adress: Rua Paraíba, 523 - Funcionários Belo Horizonte / MG - BRAZIL CEP: 30150-321 Telephone: +55 31 3264-5444 email: inteligência@indizbrazilchamber. org / www.indiabrazilchamber.org Minas Gerais Business Guide - 2012 | ACMinas 22 Minas Gerais is ready to lead the economic integration between Brazil and Africa MOZAMBIQUE & MINAS GERAIS In the seventeenth century, the Bandeirantes (Brazilian pioneer explorers) started exploiting the Brazilian coast in search of mineral resources, especially gold. In their journey for wealth, the explorers discovered a region rich in fertile soil, with a lush rainforest and abundant mineral resources. They named the region Minas Gerais. More than three centuries later, Minas Gerais remains a potential producer of mineral resources and hosts the largest companies of the segment operating in the State. Occupying about the same area as France, and the second largest population in the country, with approximately 20 million inhabitants spread over 853 municipalities, Minas Gerais calls the world’s attention especially for its natural beauty. Its strategic location, fertile soil, natural resources and a well-developed agribusiness sector are other reasons for the investment success in this state. The territory of Minas Gerais also contributes to the development of the region, for it is one of the country’s largest with an area of 588,384 km2, the fourth Brazilian state in size with one of the highest rates of population participation in Brazilian GDP (approximately 11%). Since the beginning of the twenty first century, Minas Gerais has had one of the highest rates of GDP growth in Brazil, twice the national average over the same period. This state also has a diversified economy. The service sector accounts for 58% of the GDP, while the industrial segment represents 32% and the primary sector is responsible for the remaining 10% (2010). In agriculture the highlights are sugar cane, coffee, soybeans, corn, pineapple, onions, beans, bananas among others. In livestock, the greatest performers are cattle, swine and poultry. In addition to the primary sector, Minas Gerais has one of the largest industrial parks in Brazil, which propelled this state to a position among the largest GDPs in Latin America, representing approximately 10% of the national GDP in 2010. Behind only São Paulo and Rio de Janeiro, Minas Gerais stands out in the mining industry and aggregated sectors such as metallurgy. Other important industries are automobile and automobile parts manufacturing, textile, chemical and construction sectors. The service sector is the most developed in the region, as the State’s Capital, Belo Horizonte, with over 5 million inhabitants, is a national reference in Information Technology. The financial and business management sectors in the state are also a reference, given the presence of some of the most prestigious universities and business schools in Latin America. Due to the impressive development of its GDP in recent years, its range of different sectors attractive to investment and its similarities, geographical and cultural, with Mozambique and Angola, Minas Gerais was chosen to host the Headquarters of the Chamber of Commerce, Industry and Agriculture Brazil-Mozambique. Minas Gerais is in second place among the Brazilian states that has a relationship with Mozambique, with an export rate of 15.5% of Brazil’s total. And the overseas sales are still growing, both with respect to trading partners about the goods / services and companies. In 2010, this increase was 60%, recording an amount of US$ 31.2 billion, a new annual record. Minas Gerais Business Guide - 2012 | ACMinas 23 As the years go by, relations between Brazil and Mozambique have intensified, and there is still enormous potential for promoting this relationship. Projections indicate that bilateral trade and investment between the two countries will increase sharply in coming years. Minas Gerais presents perfect conditions to be the integration center between Brazil and Africa, and it is now globally recognized as the world center for services in the Portuguese language countries. Minas Gerais is the perfect destination for foreign investments and to accommodate offices, companies and global organizations interested in investing in Brazil. Brazil - Mozambique Chamber of Commerce, Industry and Agriculture The main objective of the institution is to strengthen relations between Brazil and Mozambique through receptions, advisory services to Brazilian and Mozambican delegations, trade fairs and promotional events, business roundtables, training and individual business missions, scheduling visits, dissemination of business/government information in both countries, in addition to publishing on the website the Products and Services of Partners and Associates, focusing strictly on business deals. Mozambique, according to the authoritative British weekly newspaper The Economist, in a study released in early 2011, had the 8th highest rate of economic growth worldwide, with 7.9% in the first decade of this century. For the next 5 years, the study indicates that the country will be among the 4 countries with the highest average rate of world economic growth. In each area, CCIABM joins efforts to meet in the best possible way the Brazilian and Mozambique business community. We do a custom job with our partner companies, according to their needs, assisting in the expert development of its strategy to markets of its interest. Câmara de Comércio, Industria e Agricultura Brasil-Moçambique (Brazil-Mozambique Chamber of Commerce Industry, and Agriculture) Address: Rua da Paisagem, 220, Belvedere Belo Horizonte / MG - BraZIL CEP: 34000-000 Telephone: +55 31 3243-3012 www.cciabm.com / twitter: @CCIABM Other Locations - Brasil: Brasília/DF - Belo Horizonte/MG - São Paulo/SP Porto Alegre/RS - Goiânia/GO - Fortaleza/CE Moçambique: Maputo Minas Gerais Business Guide - 2012 | ACMinas 25 Minas Gerais Business Guide - 2012 | ACMinas 24 A new vision on trade relations between Minas Gerais and Portugal portugal & MINAS GERAIS Gone are the days when Minas Gerais exports were based only on primary products with low added value to the world, and in particular to Portugal. Gone are the days that imported Portuguese products were only wine, cod, olive oil and olives. As the saying goes “Time passes, time flies,” and it has been so for the economies of Minas Gerais and Portugal. Both evolved in its list of export products, and began to add more value to products produced by them. This is due to investments made by both governments. It is an indisputable fact that the safe haven exports from Minas Gerais to the world is still mining activities. However, when we look at our list of exports, we find a huge variety of industrial products with high value added in sectors ranging from consumer electronics, footwear, apparel, and more recently, products generated by agribusiness, especially of fruits from Jaíba Valley, on the State’s northeast. On the other hand, Portugal has also increased the number of products it exports, also with high added value products, but not forgetting the traditional and appreciated Portuguese wine, cod, and olive oil. Still, the differences evident in the trade balance between Minas Gerais and Portugal is clearly favorable to our state. In recent years we have seen a major process of globalization in Portuguese companies from diverse industries, the demand for bigger and more stable consumer markets, lower costs, etc., starting to act globally. So it has been with construction, IT, cement, real estate, hotel services, financial services, etc. Today we can see Portuguese companies excelling in the world market in many areas, and several of them arrived in Brazil and Minas Gerais. Why is this? It is a fact that the Brazilian economy has experienced a moment of strong and sustained growth. The current solid foundations of the Brazilian economy associated with an expanding domestic market, both in quantity and in purchasing power in general; and Minas Gerais, which has grown above the national average, in particular. These are the reasons why we are attracting many Portuguese investments. On the other hand, the economic and financial crisis that hit Europe, in spite of its severity, can make a difference to Brazilian companies that seek the globalization of its activities, the basis of their survival in the global market. In other words, good busi- We can highlight sectors where Portugal has emerged as the generation of alternative energy, providing services in information technology, design, templates, etc. Therefore, we can observe that both Minas Gerais and Portugal are rich in opportunities for investors. For the Portuguese investors that target the Brazilian market, Minas Gerais offers opportunities as Public Private Partnerships (PPPs) for the modernization of public transit systems (Light Rail, BRT, Metro), modernization of highways throughout the ness opportunities can be found. At this point, we firmly believe that Portugal could be the safe haven for investors in Brazil, focusing on the European market, and the Portuguese speaking countries. Since its entry into the European Common Market, Portugal has invested heavily in modernizing and improving its road, rail, port, and airport infrastructure. It also invested heavily in its communication and power generation infrastructure. And most importantly, invested heavily in its human capital! Today, Portugal has one of the best qualified workforces in the European Community, with outstanding professionals in several new areas in the new Portuguese industry, structured from an excellent school system, with programs designed to qualify them and continually enable them, in several segments. It also carried out important work to simplify the bureaucracy of the economy, reducing and streamlining processes, time and cost for start-ups, and modernizing the tax system. state, airports, power generation (hydro / PCH ‘s, wind , photovoltaics, gas, biofuels), health services, hotels, convention centers and events. Moreover the technological parks of Santa Rita do Sapucaí, the aeronautical park in Lagoa Santa, furniture from Uba, Nova Serrana footwear, and agribusiness (West, South, Jaíba Valley etc.) further strengthen the menu of options that Minas Gerais has to offer. For state investors looking for good opportunities, the timing could not be better. Sectors such as metal-mechani- cal, equipment for power generation, IT services, real estate, tourism, distribution centers, academic, among others, offer excellent opportunities for those who want to invest in the form of acquisition, total or partial transfer of technology, and human resources training and qualification. Time is of essence! It’s time for Portugal to rediscover Minas Gerais, and vice versa, in the search for strong and sustainable growth of trade relations between the two countries. Portuguese Chamber of Commerce in Brazil - Minas Gerais The Portuguese Chamber of Commerce in Brazil - Minas Gerais, founded in 1996, it is an association dedicated to the growth of commercial, technological, social and cultural relations between Minas Gerais, Portugal and Portuguesespeaking countries. We support the achievement of international business, bringing companies together that are seeking a competitive insertion in the global scenario. In this sense, the Chamber assumes an increasingly dominant role in strengthening economic relations between Minas Gerais, Portugal and all businesses of Portuguese origin. The common elements that unite the two countries, especially the language, culture and history, clearly favor the achievement of new business opportunities and generate promising opportunities. Add to this the prime location of Portugal, considered the most strategic point of Europe, which allows the development of globalization in the entire European Union, due to the existence of a common economic market. Among the objectives of the Chamber, are the encouragement and strengthening of trade and cultural exchange between the two countries, as well as creating business opportunities in various industries: exports, imports, technology, food, transportation, infrastructure, construction, financial inspection, tourism and health. Our mission is to promote a network in Minas Gerais of international business-generating opportunities in the Portuguese speaking countries. Câmara Portuguesa de Comércio no Brasil - Minas Gerais (Portuguese Chamber of Commerce in Brazil - Minas Gerais) Address: Av Contorno, 4.520, 7th floor, Funcionários - Belo Horizonte / MG BRAZIL CEP:30.110-916 Telephone: +55 31 3213-1557 e-mail: [email protected] Minas Gerais Business Guide - 2012 | ACMinas 26 Agribusiness: Opportunities for Foreign Investors italy & MINAS GERAIS Minas Gerais is a traditional farming state. It is the largest milk and coffee producer in Brazil and holds the second largest cattle herd. Also noteworthy is the national production of corn, beans, soybeans, potatoes, garlic, carrots, tomatoes, fruits and eggs. It is the largest national producer of reforested coal and planted forests in the country. The state has a population of about 19,597 million inhabitants (2010 census), with a territory of 588,383.6 square kilometers and is the first state to have its Gross Domestic Product (GDP) calculated monthly by the Center for Advanced Studies in Applied Economics (CEPEA ). The GDP related to agribusiness in Minas Gerais represents about 35% of the state’s total, and 12% of the Brazilian agribusiness GDP. Minas Gerais is the leading producer of coffee, with about 50% of the national production. The State also leads in the milk industry, responsible for one third of the national production. It is also the second largest producer of eggs. The State has the second largest cattle herd, with 22,4 million, and the largest herd of horses, with about 800,000 animals. The state also leads the production of Cachaça and is famous nationwide for its cheese production. With the main focus on the agricultural opportunities in Minas Gerais, the state has established itself as one of the most significant development centers of Brazil, when, in 2010, it received the “Quattro Motori per l’Europa” (Four Motors for Europe) mission, which featured the participation of 12 European companies and about 40 representatives from six European countries in politics, research institutes and major universities. The Association “Four Motors for Europe” is the union of the most important regions in Europe, when it comes to high development and technology, whose aim is to contribute to the globalization of their business and their citizens. The Association also foresees for cooperation in science, research, education, environment, culture, and other sectors. The purpose of this Association is to join forces to increase the economic growth of four regions which are: Lombardy (Italy), RhôneAlpes (France), Catalunya (Spain) and Baden-Württemberg (Germany) and has a partnership with the regions of Flanders (Belgium) and Wales (United Kingdom). In 2010, the presidency of this Association was the Lombardia Region and, ac- cording to an agreement signed in 2008 between the Government of Minas Gerais and the Lombardy region, the State was elected as the target of this initiative. The mission program, sponsored by the “Four Motors for Europe” Association in partnership with the Italian Chamber of Minas Gerais, featured an: Opening Seminar - with an economic presentation of Minas Gerais and the “Four Motors of Europe”, followed by Technical Seminars focused on agribusiness opportunities in Europe and in Minas Gerais. Technical and scientific workshops were also performed - focused on academia, B2B, scientific and institutional, including a meeting with the Minas Gerais State 2014 World Cup committee. The Technical Seminars explored issues of excellence in European regions and also an overview of the State of Minas Gerais on the matters raised by the Europeans, such as the integrated management of agribusiness products, plant biotechnology and industrial traceability of food products of animal origin, management of the milk network for the European and international markets and the effects of the financial crisis on the international trade in meat. Speakers included professors from renowned institutions and researchers from major European technology centers in Minas Gerais. Minas Gerais Business Guide - 2012 | ACMinas 27 Italian-Brazilian Chamber of Commerce, Industry and Craftwork of Minas Gerais We define the Italian Chamber of Commerce of Minas Gerais as a business environment, focusing on the promotion of global trade. A Chamber recognized by the Italian government since 1998, which promotes bilateral relations between Italy and Brazil, as well as with the relationships between all major markets. The Chamber is part of a network of more than 75 Italian Chambers of Commerce in the world, supporting approximately 25,000 members in 48 countries. By promoting services and products at the global level, this network becomes central in the globalization process of the companies. To boost cooperation in trade, the Chamber offers customized services to meet the needs of businesses. Through exhibitions, seminars, missions, and match making events, the associate companies update and expand their social network. The Italian Chamber prospects business opportunities, support for technology transfer and joint ventures. In addition to this, it is committed to sustainability, judging as a smart choice for a management committed to the future. The Italian Chamber of Minas Gerais is therefore a direct and strategic link between the Brazilian companies, the Italian companies and world trade. Câmara Ítalo Brasileira de Comércio Indústria e Artesanato de Minas Gerais (Italian-Brazilian Chamber of Commerce, Industry and Craftwork of Minas Gerais) Address: Rua Piauí, 2019, 5th floor, Funcionários - Belo Horizonte / MG - BRAZIL CEP: 30150-321 Telephone: +55 31 3287-2212 www.italiabrasil.com.br Email: [email protected] Minas Gerais Business Guide - 2012 | ACMinas 28 Minas Gerais: The opportunities are here to capture now FRANCE & MINAS GERAIS Although the economic and financial environment of major developed countries are marked by the financial crisis, Brazil appears as an increasingly promising market. Our institutions are stable and the economy and finance of the country follow the same line. The country is open to foreign investment. Almost all the large French industrial groups are present here, often in a position as market leaders. The top 1000 companies in Brazil are subsidiaries of multinational groups. The domestic market is huge: nearly 200 million inhabitants of whom 30 million just came out of poverty in recent years. Domestic consumption, which represents 80% of Brazil’s GDP, is what mainly propels our growth. Therefore, Minas Gerais, which asserts itself in this country with a growth differential greater than the national average, has the potential to attract companies from around the world. Public investments are growing at around 20% per year. The infrastructure of the state is in the process of modernization through a public entrepreneur administration. Minas Gerais was the first Brazilian state to adopt and ratify the Law on Public- Private Partnerships (PPP) agreements between the public and private sectors to develop various sectors, particularly with a view to the 2014 World Cup and the installation of metro branches, improving roads, building prisons, etc. Minas Gerais has the largest highway network (269.545,5 km) and the second railroad network in this country, which connects the State directly with 4 ports (Vitoria, Sepetiba, Rio de Janeiro and Santos), greatly assisting in the implementation of new business. The state is also the first to propose the concept of industrial airport with the Tancredo Neves International Airport: importing and exporting companies domiciled around the airport will benefit from tax exemptions, special conditions and the metropolitan region is ready to accommodate development projects for the next 30 years. The State concentrates numerous business opportunities in the most promising sectors. Our list of export products includes metallurgical products, coffee, gems, footwear and mechanical products. We have a rich agri-business industry, which represents 33,3% of the State GDP. The country has the one of the largest hydroelectric potentials in the world (255 million KW) largely produced in Minas Gerais. The Vale group is the second largest producer of minerals and Embraer is the 3rd largest aircraft manufacturer in the world. The relationship between France and Brazil is dynamic in terms of both trade (+33% in the first half of 2010) and in terms of direct investments: France was the 5th direct investor in Brazil in 2010. France invests more in Brazil than in any other BRIC country. The market and cultural proximity are great attractions for French companies and, when well orchestrated and combined into a business project, the French and Brazilian cultures tend to form a mutually beneficial partnership. This means that the possibilities are vast in both directions. Minas Gerais, because of its geographical position, is a gateway to Brazil and the vastness of its territory is focused in several areas. As Minas is to Brazil, the region of Nord Pas de Calais, which has several trade agreements with our state, is to France, because of its location and logistical infrastructure, acts as an extremely important gateway for the market not only in France but for all of Europe. The development of mineral and steel centers in our state (68 billion U.S. dollars investment in new units expected between 2008 and 2015) and modernization of the highway and railroad in- Minas Gerais Business Guide - 2012 | ACMinas frastructures are probably the two economic sectors most attractive to foreign investors. The France-Brazil Chamber of Commerce (CCFB) is present in the state and in all initiatives aimed at increasing trade between the two countries. We feel that this is particularly suitable moment and we are available to all who are interested in investing in our state, promoting contacts, searching data, bringing institutions together and working effectively in the development of our business agenda. 29 France-Brazil-Minas Gerais Chamber of Commerce Founded just over 100 years ago, the France-Brazil Chamber of Commerce now has over 1000 members between French and Brazilian companies of all sizes, areas and individuals. We are an association that aims at the development of economic, financial, commercial, industrial, technical, cultural and social links between France and Brazil. In Brazil, CCFB has offices in São Paulo, Rio de Janeiro, Paraná and Minas Gerais, thus creating a network of joint action in Brazil. We provide services to members located in this country and represent the French business community. In Minas Gerais, CCFB supports French companies in their first steps stimulating associations, businesses and partnerships. As a privileged dialogue partner for French business organizations, such as Association des Chambres Françaises de Commerce et d’Industrie (ACFCI), Union des Chambres de Commerce et d’Industrie Françaises à l’Etranger (UCCIFE), Mouvement des Entreprises de France (MEDEF) and partner in several regional chambers of commerce and industry in France, we seek to foster relationships between members and these organizations. The CCFB also includes the Council of Chambers of Commerce and Industry of the European Union, which favors a united action of European business in Brazil. Câmara de Comércio França-BrasilMinas Gerais (France-Brazil-Minas Gerais Chamber of Commerce) Address: Avenida do Contorno, 4520, 7th floor, Funcionários - Belo Horizonte / MG - BRAZIL CEP: 30110 916 Telephone: +55 31 3213-1576 Fax.: +55 31 3213-1577 [email protected] www.ccfb.com.br MINAS GERAIS Minas Gerais Business Guide - 2012 | ACMinas 30 Minas Gerais Business Guide - 2012 | ACMinas FOTO BH TEC Minas Gerais’ R&D R&D and Education In recent years the Research & Development profile of Minas Gerais has changed very fast. The responsibility for this change is given mainly by the increase in public resources devoted to science and technology and partnerships with the private sector. The main government organization for this movement, which created an environment ripe for innovation, is the Minas Gerais State Research Support Foundation (Fapemig). In 2010, the institution received nearly 40% of the resources provided by the Government of Minas Gerais for science and technology. The amount provided was nearly US$ 150 million of the total US$ 394 million invested, 13% more than in 2009. The challenge faced by FAPEMIG and other institutions working in the state is to create a sustainable and sustained innovation culture in the private sector. The main objective is to bring scientific knowledge to industry to perfect it. This action would provide a more competitive industry in Minas Gerais, generating more jobs and making businesses more profitable. The major industries in the state have a productive mission with innovation. Agribusiness, software and metal mechanic companies come from sectors receptive to innovations from bio- technology, information technology and nanotechnology. The scenario in the State of Minas Gerais is further strengthened with the establishment of three state technological centers: the BHtec of Belo Horizonte, the state capital, with a multi-sectorial mission, the PVT-Centev of Viçosa, focusing on agribusiness, and the ParCtec Itajubá, focusing on energy. In addition to the technology centers, Minas Gerais has some of the best schools in the country, which also act as 31 referral centers for domestic R&D. The Federal University of Minas Gerais (UFMG) was mentioned in the first QS University Rankings: Latin America, as the third in Brazil. Fundação Dom Cabral, already mentioned more than once throughout this publication was considered in 2011 as the 5th best business school in the world. This is an institution that began and was developed in the heart of Minas Gerais. For more information about Fundação Dom Cabral, read the article that follows. BH-Tec Building Project: 90,525 square feet Fapemig - Fundação de Amparo à Pesquisa do Estado de MG (Minas Gerais Research Support Foundation) Rua Raul Pompéia, nº101 - São Pedro Belo Horizonte / MG - BRAZIL CEP: 30.330-080 Telephone: +55 31 3280-2100 www.fapemig.br Source: Valor Econômico Newspaper; Minas Gerais Secretariat of Science, Technology and Higher Education; ACMinas Economics Department. *Forecast BH-Tec Parque Tecnológico de Belo Horizonte (BH-Tec Belo Horizonte Technological Park) Rua Professor José Vieira de Mendonça, 770 - Engenho Nogueira Belo Horizonte MG- BRAZIL CEP: 31310-260 Telephone: +55 31 3409-7391 www.bhtec.org.br Secretaria de Estado de Ciência, Tecnologia e Ensino Superior de Minas Gerais (Cience, Techology and High Education Secretary of Minas Gerais) Cidade Adminstrativa Presidente Tancredo NEves - Rodovia Prefeito Américo Gianetti, s/n - Serra Verde - Edifício Gerais, 8th floor - Belo Horizonte / MG - BRAZIL CEP: 31.630-901 Telephone: +55 31 3915-5124 www.tecnologia.mg.gov.br Fundação Dom Cabral (Dom Cabral Foundation) Av. Princesa Diana, 760, Alphaville, Lagoa dos Ingleses Nova Lima / MG - BRAZIL CEP: 34000-000 Telephone: +55 31 3589 7300 www.fdc.org.br UFMG - Universidade Federal de MG (Federal University of Minas Gerais) Av. Antônio Carlos, 6627 - Pampulha Belo Horizonte / MG - BRAZIL CEP: 31270-901 Telephone: +55 31 3409.5000 www.ufmg.br PUC Minas - Pontifícia Universidade Católica de Minas Gerais (Catholic University of Minas Gerais) Av. Dom José Gaspar, 500 - Coração Eucarístico - Belo Horizonte / MG - BRAZIL CEP: 30535-901 Telephone: +55 31 3319-4444 www.pucminas.br 32 Minas Gerais Business Guide - 2012 | ACMinas Executive Education with overall quality Campus Aloysio Faria Minas Gerais Business Guide - 2012 | ACMinas agement topics, FDC conducts hundreds of programs customized to meet specific demands and challenges of companies, government organizations and the third sector. A specialty of the Fundação Dom Cabral business partnership are companies that gather in groups to exchange experiences and best management practices which is also a consortium manner to hire our educational solutions. Working with companies and not just for them is a hallmark philosophy and work practice at FDC. Our faculty is made up of Brazilian and foreign professors trained in the best schools in the world with extensive experience in the corporate world as entrepreneurs, executives, consultants or researchers. A group of managers and program directors meet business chal- Centro Alfa - Guilherme Bergamini Fundação Dom Cabral, was established in 1976, and is considered one of the leading business schools in the world. Through a network of cooperation with schools in Latin America, BRICs, Europe and the United States it offers its educational solutions for business development in several countries in the world. Fundação Dom Cabral provides the main Bra- zilian and multinational corporations with development and training programs for their managers and executives. The AMBA and EQUIS certifications were obtained in recognition of the worldwide standard of programs and courses offered by FDC. Ranked 5th in executive education by the Financial Times in 2011 and 1st place in the America Economia magazine attest to the recognition by companies and executives participating in the quality and applicability of the solutions developed by FDC. Annually about 30,000 business owners and executives participate in various programs offered by FDC in Brazil and elsewhere. In addition to a diversified portfolio of specialized courses, MBAs and open programs on various business man- lenges after a scheduled meeting to understand their challenges and effectively plan the best solutions. Our programs are developed and incorporate knowledge from the Centers for Knowledge Generation which focus on major themes of contemporary issues and challenges to companies such as Leadership, Innovation, Sustainability, Corporate Governance, International Business, among others. The Nuclei are the work area of a competent and experienced team of teachers and researchers, that conduct research, develop methodologies and create new programs and solutions to the needs of the organizations. To meet a growing demand for information about the opportunities and challenges of investment and trade with Brazil, 33 FDC has received groups of entrepreneurs, executives and foreign MBA students offering courses tailored to the interests of a platform which we call Brazil Business Environment. Lectures, workshops, lectures, interviews and business managers and public visits to companies that offer this program are lectured in English and Spanish. Fundação Dom Cabral - Campus Aloysio Faria Av. Princesa Diana, 760, Alphaville, Lagoa dos Ingleses - Nova Lima / MG - BRAZIL CEP: 34000-000 Telephone: +55 31 3589 7300 www.fdc.org.br Minas Gerais Business Guide - 2012 | ACMinas 35 The Minas Gerais’ colonial circuit Tourism & Culture Estrada Real (Royal Road) The Estrada Real (Royal Road) was created by the Portuguese crown in the seventeenth century with the intention of monitoring the circulation of wealth and goods transiting between Minas Gerais - gold and diamonds - and the coast of Rio de Janeiro - capital of the colony from where the ships returned to Portugal. As it was forbidden to make the journey by another route, the road was used by emperors, soldiers, merchants, musicians, adventurers and intellectuals, who in addition to products, took ideals, such as how to transform Brazil into an independent republic. Today, the Estrada Real Institute (IER) is a nongovernmental organization (NGO) established in 1999 by the Federation of Industries of Minas Gerais (Fiemg). A team of technical experts in tourism transformed the old road, open for over 300 years by the Portuguese Crown, in a recognized tourist destination in Brazil and abroad. Today, the ER (Royal Road) passes through 199 municipalities - 169 in Minas Gerais, 22 in São Paulo and 9 in Rio de Janeiro - and is 1600 km long. With the strengthening of the productive chain of tourism, the IER (Royal Road Institute) seeks sustainable development of municipalities of the Royal Road. The demand generated by millions of visitors to this destination is able to move more than 50 industry sectors, creating opportunities for profitable businesses, more jobs and income, contributing effectively to the reduction of social inequalities in Minas Gerais and Brazil. For more information go to: site.er.org.br Ouro Preto The capital of Minas Gerais until 1897, Ouro Preto is a fabulous seventeenth century town nestled in a deep valley of mountains in Minas Gerais. Anachronistic, amazing, fascinating... The feeling for the first time visitor is excitement! Suddenly it seems that time travel is a reality. A pilgrimage of the living is mixed with a procession of the dead. Historical and anonymous figures mingle with the contemporary. The city, center of gold mining in Colonial Minas Gerais, has more than 20 churches and temples of baroque architecture, each with its own history. For its value, Ouro Preto was declared a National Monument City in 1933. The interest and world recognition came in 1980, when UNESCO declared it a World Heritage Site. For more information go to: www.ouropreto.org.br Minas Gerais Business Guide - 2012 | ACMinas 36 Minas Gerais Business Guide - 2012 | ACMinas 37 Minas Gerais Business Guide - 2012 | ACMinas 37 Museums in Belo Horizonte Inhotim - Institute of Contemporary Art and Botanical Garden Inhotim is a unique and impressive tourist destination. Only 60 km from Belo Horizonte, it offers a collection of works of art, displayed outdoors, as well as in both temporary and permanent galleries. It is situated in a botanical garden with rare plant species, arranged landscape, five lakes and a preserved forest reserve. In this space, research projects are developed in the environmental area, educational activities and programs of inclusion and citizenry for the population that surrounds it. The Inhotim Institute is a public interest civil society organization. Contemporary Art The art collection houses over 500 works by artists such as Adriana Varejao, Helio Oiticica, Cildo Meireles, Chris Burden, Matthew Barney, Doug Aitken, Janet Cardiff, Rivane Neuenschwander, among others. Inhotim offers conditions unique for the artist to perform their work. Botanical Garden Covering an area of 97 hectares (approximately 240 acres), Inhotim is a botanical garden with a collection of approximately 4800 species in cultivation, and 145 acres of preserved Atlantic forest. Most notable are the collection of palms, the world’s largest number of species, and the collection of the Araceae family, both with global reach, but with emphasis on Brazilian species. Inclusion and Citizenry The Inhotim Institute has become a key vector for the socio-economic development of its municipality, Brumadinho, and its surrounding areas. Projects like Inhotim Encanto e Coral and the musical initialization appreciates the region´s vocation and gets the children, youth and adults involved. There is also dialogue with entrepreneurs in the region to increase their economic activities and projects in partnership with local government. Gastronomy With several dining options, Inhotim offers a diverse cuisine for you to try. Restaurants featured are Tamboril and Oiticica, which offer an integrated environment with the botanical garden and an international menu. visit Inhotim Inhotim is located in the town of Brumadinho, 60km from Belo Horizonte on Highway BR-381 and 70 km if you travel on Highway BR-040. Busses travel nonstop from Belo Horizonte to Inhotim and back, the busses depart from the Belo Horizonte Bus Station, Tuesday through Sunday and holidays. Information: +55 31 3419 1800 www.inhotim.org.br Pampulha Art Museum Pampulha Old Casino, a member of architectural Pampulha, focuses on trends in various artistic exhibitions, research and conceptualization. In its collection, there are works of contemporary Brazilian art. It is one of the buildings built by Oscar Niemeyer around Lake Pampulha, Belo Horizonte, Minas Gerais, Brazil, at the request of then Mayor Juscelino Kubitschek in the early forties. Address:Av. Otacílio Negrão de Lima, 16585, Pampulha - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3277 7996 www.map.art.br Arts and Crafts Museum The Arts and Crafts Museum - MAO - is a cultural space that houses and disseminates a collection representative of universal work, arts and crafts from Brazil. A meeting place of the worker with himself, with his own history and his own time. Address: Praça Rui Barbosa, s/nº, Cidade Jardim - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3248 8600 www.mao.org.br EBX-Mine and Metal Museum Minas Gerais and its history: Learn the process of economic, social and cultural development that has mining in its state´s name and find an important mining and metallurgy collection. With a lot of technology, visitors will be fascinated with this universe so rich and its importance to human life. Address: Circuito Liberdade Praça da Liberdade, s/nº - Belo Horizonte / MG - BRAZIL Telehone: +55 31 3409 8350 www.circuitoculturalliberdade.mg.gov.br TIM UFMG Knowledge Area The fascinating world of science and knowledge awaits you in this area. One of the places preferred by younger audiences presents a fun and interactive place. Visit a planetarium which is among the most modern in the world and an astronomical observatory in the central area of Belo Horizonte. The exibit “Too Human” is another interesting attraction for visitors to the Freedom circuit. Address: Praça da Liberdade, s/nº Belo Horizonte / MG - BRAZIL Telephone: +55 31 3409 8350 www.circuitoculturalliberdade.mg.gov.br Museu Abílio Barreto Opened un 1943, Museu Abílio Barreto is an institu- tion which holds a significant part of the History of Belo Horizonte. Its function is to collect ant preserve items which contribute to the comprehension of the socio-historic dynamics of the city, with a multiple and revealing collection of the several paths taken by the capital and its citizens. Its purpose is to make public the access to preserved cultural items, fomenting the participation of citizens in the construction of the city’s memory. Address: Avenida Prudente de Morais, 202, Cidade Jardim Belo Horizonte / MG - BRAZIL Telephone: +55 31 3342-1268 Associação Dos Amigos do Museu Histórico Abílio Barreto: www.amigosdomhab.org.br Minas Gerais Business Guide - 2012 | ACMinas 39 How to Invest in Brazil & Minas Gerais foreing capital & legislation Brazil currently lives, a unique moment in its history. By taking an opportunity of the solid macroeconomic stability of this century, Brazil, which was claimed to be a high risk for investors, became in 2011, the fourth largest recipient of direct external investment in the world. By matching sustainable growth, fiscal balance and investments in infrastructure, Brazil ranks third among the safest countries for investment in the Americas, according to the risk grading agency Standard&Poor’s, in addition to being considered an ascension symbol of developing countries. The fifth largest Stock Exchange in business volume in the world, BOVESPA, is located in Brazil; a State bank which has higher financial capacity than the World Bank, the National Bank of Economic and Social Development (BNDES); and the fourth largest company in market value in the world, Petrobras. Besides, the country counts on five great industrial plants, which ally technology, high productivity and sustainability. One of these plants is in the state of Minas Gerais; the second richest state of the country, the city of Belo Horizonte is its capital and is responsible for 50% of the Gross Domestic Product (GDP) of the State. Currently, Minas Gerais GDP is around 200 billion dollars annually; it is the largest exporter of iron ore and Arabica coffee in the world. The State of Minas Gerais still is a national reference in sugar production, meat, automobiles, chemical products and food in general, besides ranking second among the Brazilian exporting states, responsible for 15.7% of the international transactions of export products of the country. Its economy is stronger than countries like Peru, Egypt and New Zealand. For these reasons, the State of Minas Gerais is considered one of the best places to receive foreign investment in Brazil. CONCEPT OF FOREIGN CAPITAL According to Law 4.131, dated 09.03.1962, foreign capital are goods, machines and equipment introduced into Brazil without initial payment, designated for the production of goods and services, as well as the financial or monetary resources introduced into the country for use in economic activities. In both cases, foreign capital must belong to companies or individuals with permanent residence or headquarters in foreign countries. Foreign capital is safe and has the same legal treatment as agreed to with national capital. TYPES OF DIRECT FOREIGN INVESTMENT Foreign investment in Brazil can be made as a direct investment or in an investment portfolio. Foreign Direct Investment (FDI) is characterized when the investor withholds 10% or more of common stock or right to vote in a company residing in Brazil, whereas Foreign Portfolio Investment (FPI) is constituted when that percentage is less than 10%. Portfolio investment refers to foreign applications in the financial Market and of Brazilian capital, in the form of share acquisition or fixed-income or equity securities, traded in Brazil or abroad. Foreign Direct Investment is divided into two main types, which are (i) capital participation and (ii) intercompany loans. MOST COMMON LEGAL ENTITIES Most common entities used by foreigners in Brazil to start up a business are Sociedade Anônima (that is similar to a Corporation) and Sociedade Limitada (that is similar to a Limited Liability Company). Minas Gerais Business Guide - 2012 | ACMinas 40 Sociedade Limitada is governed by the Brazilian Civil Code, organized through the Articles of Association and has limited liability partners. • The partners have their responsibility limited to the value of their shares and are liable for the payment of the capital stock. • The capital stock is divided into corporate shares that represent the amount in money, credits, rights or assets by which the shareholder contributes (subscribes) for the formation of the company’s capital. • There is no minimum capital required to start up this type of company. • Minimum of two partners (Brazilian or Foreigner) Sociedade Anônima is governed by Law number. 6.404 of 1976, organized through By Laws and it is a business corporation by legal definition, with the purpose to earn profits to be disbursed to its shareholders. Its capital is represented by previously outstanding shares. • Minimum of two partners (Brazilian or Foreigner). • Generally, there is no minimum capital required, only for some special activities, like financial, banks and others. There are two types of Sociedades Anônimas: (i) publicly held company which obtains funds through public offers and subscriptions and is supervised by the Brazilian Securities Commission (CVM); and (ii) privately held company which obtains capital from its own shareholders or subscribers. Permanent Visa • Officers/Managers of Brazilian companies shall be Brazilians or Foreigners only with a permanent Brazilian Visa; • The permanent visa is conditioned to registration of the company’s Articles of Association or By Laws and must be approved HOW TO START UP A COMPANY IN BRAZIL by the Ministry of Labor, Ministry • The visa is also conditioned to exercise the work for which the • Foreign shareholders must appoint and be represented by a local attorney in fact, with specific powers to act on their behalf in several administrative and judicial proceedings; • Foreign citizens and companies must be enrolled before the Federal Revenue to obtain the Company’s Tax Registration Number (CNPJ) or Individual’s Tax Registration Number (CPF); • Articles of Association or By Laws of the investors’ foreign companies and Powers of Attorney shall be legalized at the nearest Brazilian Consulate in the foreign country before their respective sworn translation; • The manner by which the capital stock will be subscribed in the Brazilian companies (goods, cash, and rights) shall be described in the Articles of Association or By Laws; • After translation, Articles of Association or By Laws shall be duly filed before the Brazilian Local Trade Register (a certified Lawyer shall analyze and sign the Articles of Association or By Laws); work license was required; • After filing the company’s deeds, the investors shall register the foreign capital (cash, rights, goods, equipment) before the Brazilian Central Bank Information System (SISBACEN) in the software called RDE-IED (Electronic Registration). The capital registration in RDE-IED is also important to ensure remittance of profits, profit reinvestment and capital repatriation in the future; that such investment must be reg- • Before starting operation, the company must be registered under the State Revenue Agency, Municipal Revenue Agency and Social Security Agency (INSS). Capital admission Categories 1) Money; 2) Import of goods without exchange coverage. The goods may be tangible (machines, equipment) or intangible (rights); 3) Reinvestment of profits, “interest on own capital” or future profits reserve. Manucci Law Firm Rua Felipe dos Santos, 521, 7th floor, Lourdes - Belo Horizonte/MG - BRAZIL / CEP: 30180-160 Telephone: +55 31 2552-2009 Website: www.manucciadv.com.br BRAZILIAN TAX SYSTEM OVERVIEW • To apply for a permanent visa for its officer/manager, the foreign company must have, at least, US$ 200,000.00 invested in Brazil, for each officer/manager, provided istered before the Central Bank of Brazil; • It is also possible to obtain the permanent visa for its officer/ manager if the foreign company invests, at least, US$ 50,000.00 and is committed to hire within the following 2 (two) years, at least 10 (ten) new Brazilian employees for the Brazilian Company; • The permanent visa may also be granted to individuals who invest, at least, US$ 50,000.00 in a Brazilian company, either existing or recently formed. Brazilian Taxation System has 3 (three) spheres of taxation: •Federal; •State; •Municipal. • Taxation will vary depending on the activity of the company and the place where it is located (City and State); • Brazilian companies constituted or controlled by foreign capital, in general, have no special tax benefits in relation to companies constituted or controlled by Brazilians; (Cities and States generally offer tax benefits and concessions of lands for substantial foreign investments). Taxation • The profits/dividends distributed by Brazilian companies to partners based or resident in foreign countries have not been subject to income tax since 1996; • Capital gain (which is the result of the positive difference between the acquisition value of goods and rights and its sale value) has income taxed at the 41 Manucci Advogados and all its staffs are available for clarifications to all the interested companies regarding investments in Brazil. of Foreign Relations and Federal Police; Formal proceedings Manucci Law Firm Minas Gerais Business Guide - 2012 | ACMinas rate of 15% over the gain; • Services provided by foreigners, residents or domiciled abroad, to individuals or companies in Brazil are subject to income tax at the rate of 25%, plus Municipal taxes over services, depending on the service and location where it is provided; • Royalties paid to controlling companies based in foreign countries are subject to a total taxation at the rate of: 15% of income tax and of CIDE tax (nondeductible under double taxation agreements). Double Taxation Agreements Brazil has entered into Agreements to avoid double taxation with the following countries: South Africa, Argentina, Austria, Belgium, Canada, Chile, China, Korea, Denmark, Ecuador, Spain, Philippines, Finland, France, Netherlands, Hungary, India, Israel, Italy, Japan, Luxemburg, Mexico, Norway, Portugal, Czech Republic, Slovak Republic, Sweden and Ukraine. Minas Gerais Business Guide - 2012 | ACMinas 42 Helpful facilities for foreign investors in Belo Horizonte and Minas Gerais Executive Branches Sede do Governo Estadual - Cidade Administrativa Pres. Tancredo Neves (State Government Headquarters - Administrative City President Tancredo Neves) Rodovia Prefeito Américo Gianetti, s/n - Serra Verde - CEP: 31630-900 - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3915-0635 www.cidadeadministrativa.mg.gov.br Assistance on Trade Promotion and International Marketing of the Municipal Deputy Secretariat on International Relations and Affairs Rodovia Prefeito Américo Gianetti, s/n Serra Verde CEP: 31630-900 - Belo Horizonte / MG BRAZIL Telephone: + 55 31 3246-0027 www.pbh.gov.br/internacional Licensing Receita Federal (Federal Revenue) Rua Levindo Lopes, 357 - Funcionários CEP: 30.140-170 - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3546-9000 www.receita.fazenda.gov.br Polícia Federal (Federal Police) Rua Nascimento Gurgel, 30 - Gutierrez CEP:30430-340 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3330-5200 www.dpf.gov.br CEP: 31.630-900 Belo Horizonte/MG BRAZIL Telephone: +55 31 3915-2866 www.indi.mg.gov.br Agência Nacional de Vigilância Sanitária - Anvisa / Secretaria Municipal de Vigilância Sanitária (National Agency on Health Surveillance / Municipal Secretariat on Health Surveillance) Av. Afonso Pena, 2300, 5th floor - Funcionários CEP 30130 007- Belo Horizonte / MG BRAZIL Telephone.: +55 31 3215-7212 portal.anvisa.gov.br CODEMIG - Companhia de Desenvolvimento Econômico de Minas Gerais (Economic Development Company of Minas Gerais) Rua Aimorés, 1697 - Lourdes CEP: 30140-071 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3273-3060 www.comig.com.br Trade, Industry & Investment ACMinas - Associação Comercial e Empresarial de Minas (Commercial and Entrepreneurial Association of Minas) Av. Afonso Pena, 372, Centro - Belo Horizonte / MG - BRAZIL - CEP: 30130-001 Telephone: +55 31 3048-0703 www.acminas.com.br INDI - Instituto de Desenvolvimento Integrado de Minas Gerais (Institute of Integrated Development of Minas Gerais) Rodovia Prefeito Américo Gianetti, s/n 2º andar - Serra Verde - Cidade Administrativa FIEMG - Federação das Industrias do Estado de Minas Gerais (Federation of Industries of the State of Minas Gerais) Av. Contorno, 4520 - Funcionários CEP: 30110-090 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3263 4200 www5.fiemg.com.br Federaminas - Federação das Associações Comerciais e Empresariais de Minas Gerais (Federation of Commercial and Entrepreneurial Associations of Minas Gerais) Av. Afonso Pena, 726 - 15th floor - Centro CEP: 30130-003 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3078-7000 www.federaminas.org.br Minas Gerais Business Guide - 2012 | ACMinas Junta Comercial do Estado de Minas Gerais (State of Minas Gerais Board of Trade) Av. Santos Dumont, 380 - Centro CEP: 30111-040 - Belo Horizonte / MG BRAZIL Telephone +55 31 3226-5111 www.jucemg.mg.gov.br Convention & Expo Centers Auditório JK - Cidade Administratiava Presidente Tancredo Neves Rodovia Prefeito Américo Gianetti, s/n - Serra Verde - Belo Horizonte / MG BRAZIL Telephone: +55 31 3915-0635 emali:marilenabretas@planejamento. mg.gov.br Expominas Av. Amazonas, 6.030 - Gameleira - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3334-5145 www.expominas.com.br Minas Centro Rua Curitiba, 1.264 - Centro Belo Horizonte / MG - BRAZIL Telephone: +55 31 3217-7900 www.minascentro.com.br email: [email protected] Serraria Souza Pinto Av. Assis Chateaubriand, 809 - Centro Belo Horizonte / MG - BRAZIL Telephone: +55 31 3213-3434 www.fcs.mg.gov.br email: [email protected] Uberlândia Convention Center Av. João Naves Ávila, 1331 - Uberlândia / MG - BRAZIL 43 Telephone: +55 34 3239 8400 www.centerconvention.com.br Hotel Gloria Caxambu Av. Camilo Soares, 590 - Caxambu / MG - BRAZIL Telephone: +55 31 3341 9200 www.hotelgloriacaxambu.com.br Tauá Grande Hotel Termas & Convention Avenida do Contorno, 80, Estância do Barreiro, Araxá / Minas Gerais - BRAZIL Telephone: + 55 31 3236 1900 www.taua.com.br/araxa Hotels Belo Horizonte Ouro Minas Palace Hotel Av. Cristiano Machado, 4001 - Ipiranga Telephone: +55 31 3429-4001 www.ourominas.com.br Reservations: [email protected] Mercure Av. do Contorno, 7315 - Lourdes Telephone: +55 31 3298-4100 www.mercure.com.br Reservations: reservas.mercurebh@ accor.com.br Belo Horizonte Othon Palace Av. Afonso Pena, 1050 - Centro Telephone: +55 31 2126-0000 www.othon.com.br Reservations: [email protected] Ceasar Business Belo Horizonte Av. Luis Paulo Franco, 421 - Belvedere Telephone: +55 31 2123-9898 www.caesarbusiness.com Reservations: [email protected] AIRPORTS Tancredo Neves Internacional Airport- Confins, MG - BRAZIL Area: 15 Km² Aviation serviced: Domestic , International Aircraft Patio: 86,000 m² Passenger Terminal: 61,000 m² Air Cargo Terminal: 9,828 m² Aircraft Parking: 17 slots Two Runways: 1-3,000 m X 45 m 2-3,552 m X 23 m Car Parking: 2,560 slots Distance to Center of Belo Horizonte from the airport: 37 km Rodovia MG-10, Km 39, Confins / MG - BRAZIL Telephone: +55 31 3689 2240 Pampulha Airport - Belo Horizonte, MG - BRAZIL Area: 1,8 Km² Aviation serviced: Domestic, Executive and General Aircraft Patio: 40.470 m² One Runway: 45m x 2.540m Passenger Terminal: 4.500 m² Automobile Parking: 226 slots Distance to Center of Belo Horizonte from the airport: 9km Praça Bagatelle, s/n°, Bairro Aeroporto - Belo Horizonte / MG BRAZIL Telephone: +55 31 3490 2296 Minas Gerais Business Guide - 2012 | ACMinas 44 Bristol Metropolitan Apart Hotel Av. Getúlio Vargas, 286 - Funcionários Telephone: +55 31 2057-1200 www.redebristol.com.br Reservations: metropolitan@redebristol. com.br Confidence Câmbio BR-356, 3049, Belvedere BH Shopping - Belo Horizonte / MG Telephone: +55 31 3264-0079 Royal Golden Hotel Rua Rio Grande do Norte, 1015 - Savassi Telephone: +55 31 2101-0000 www.royaltowers.com.br Reservations: gerencia@royalgonden. com.br FEDERAL REPUBIC OF GERMANY Av. Protásio de Oliveira Penna, 366/101, Buritis - CEP: 30575-360 - Belo Horizonte / MG - BRAZIL Telephone: +55 31 3213-1568 REPUBLIC OF HONDURAS Av. do Contorno 4747 - 12th floor, Serra CEP: 30110-09 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3280-1800 ARGENTINE REPUBLIC Rua Ceará 1566 - 6th floor, Funcionários CEP: 30150-311 - Belo Horizonte / MG BRAZIL Telephone/ fax: +55 31 3281-5288 REPUBLIC OF INDIA Rua Paraíba, 523, Funcionários CEP: 30130-140 - Belo Horizonte / MG BRAZIL Telephone: +55 313264-5444 AUSTRIAN REPUBLIC Rua José Américo Cançado Bahia 199, Cidade Industrial - CEP: 32210-130 Belo Horizonte / MG - BRAZIL Telephone: +55 31 3333-5363 REPUBLIC OF ITALY Rua dos Inconfidentes, 600, Funcionários CEP: 30140-120 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3524-1002 CANADA Rua da Paisagem, 220 -3rd floor CEP: 34.000-000 - Nova Lima / MG BRAZIL Telephone: +55 31 3047-1225 HONORARY CONSULATE OF JAPAN Rua Prof. José Vieira de Mendonça, 3011, Engenho Nogueira CEP: 31310-260 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3499-9620 At Ouro Preto Solar do Rosário Rua Getúlio Vargas, 270 Telephone: +55 31 3551-5200 www.hotelsolardorosario.com.br At Tiradentes Solar da Ponte Praça das Mercês, s/n Telephone: +55 32 3355-1255 www.solardaponte.com.br Foreign Exchange Agencies Banco do Brasil 1 Agência Praça da Liberdade Rua Sergipe, 1062, Funcionários - Belo Horizonte / MG Telephone: +55 31 3271-3000 Banco do Brasil 2 Agência Belo Horizonte Rua Rio de Janeiro, 750, Centro - Belo Horizonte / MG Telephone: +55 31 3284-1400 Minas Câmbio Av. Amazonas, 507 - Belo Horizonte / MG Telephone: +55 31 3272-0545 Consulates in Belo Horizonte FRENCH REPUBLIC Av.do Contorno 5417 - 2nd floor, Cruzeiro CEP: 30110-035 - Belo Horizonte / MG BRAZIL Telephone: +55 31 4501-3649 REPUBLIC OF CHILE Avenida Raja Gabaglia 1587/1, Luxemburgo CEP: 30350-540 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3286-7249 HONORARY CONSULATE OF SENEGAL Address: Rua Tulipa, 215, Esplanada CEP: 30280-200 - Belo Horizonte / MG BRAZIL Telephone and fax: +55 31 3586-1044 REPUBLIC OF FINLAND Av. Afonso Pena 3111 conj. 1007 CEP 30130-008 - Belo Horizonte / MG BRAZIL Telephone: +55 31 2101-0700 GRAND DUCHY OF LUXEMBOURG Av. dos Andradas, 1093, Santa Efigênia CEP: 30120-010 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3048-6307 Minas Gerais Business Guide - 2012 | ACMinas REPUBLIC OF EQUADOR Avenida do Contorno, 4747 - 11th floor/1112, Serra - CEP: 30110-090 Belo Horizonte / MG - BRAZIL Telephone +55 31 3284-6564 HUNGARY Rua Tenente Anastácio de Moura, 676, Santa Efigênia CEP: 30240-390 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3481-2990 FEDERATION OF MALAYSIA Rua Alagoas 1314/313, Savassi CEP: 30130-160 - Belo Horizonte / MG BRAZIL Telephone +55 31 3284-7627 KINGDOM OF MAROCCO Rua Bernardo Guimarães 1998/8th floor, Lourdes CEP: 30140-082 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3292-2666 KINGDOM OF THE NETHERLANDS Rua Sergipe 1167/1203, Funcionários CEP: 30130-171 - Belo Horizonte / MG BRAZIL Telephone: +55 31 32217377 REPUBLIC OF NICARAGUA Avenida Alvares Cabral, 397 501/502, Centro CEP: 30170-000 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3274-5251 REPUBLIC OF PARAGUAY Rua Guandaus 60/102, Santa Lúcia CEP: 30350-640 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3344-6349 REPUBLIC OF POLAND Rua Pernambuco 353/1012, Centro CEP: 30.130-150 - Belo Horizonte / MG - BRAZIL Telephone: +55 31 33096874 REPUBLIC OF PORTUGAL Av. Álvares Cabral 1366, 9º andar, Lourdes CEP: 30170-001 - Belo Horizonte / MG BRAZIL Tel: +55 31 3291-8192 SYRIAN ARAB REPUBLIC Rua Santa Rita Durão, 1030, Funcionários CEP: 30140-111 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3261-1015 45 SPAIN Rua São Paulo, 893/1210, Centro CEP:30170-131 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3213-0763 SWISS CONFEDERATION Rua Paraíba, 476/1002 CEP: 30130-140 - Belo Horizonte / MG BRAZIL Telephone: +55 31 3261-7732 REPUBLIC OF TRINIDAD & TOBAGO Rua Curral Del Rey, 581, Padre Eustaquio CEP: 30720-220 - Belo Horizonte / MG BRAZIL Tel/Fax: +55 31 3411-4970 REPUBLIC OF TURKEY Rua Alvarenga Peixoto, 295 - 3rd floor, Lourdes CEP 30180-120 - Belo Horizonte / MG BRAZIL Telephone: +55 31 2122-6700 REPUBLIC OF URUGUAY Av. do Contorno, 6777/1301, Santo Antônio CEP: 30110-935 - Belo Horizonte / MG BRAZIL Telephone: +55 313296-7527 Minas Gerais Business Guide - 2012 | ACMinas 47 48 Minas Gerais Business Guide - 2012 | ACMinas