Construction—Brazil—Q&A guide

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Construction—Brazil—Q&A guide
  • 1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?
  • 2. Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?
  • 3. Do local laws provide any advantage to domestic contractors in competition with foreign contractors?
  • 4. What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?
  • 5. If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?
  • 6. Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?
  • 7. Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?
  • 8. Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance rules as government employees?
  • 9. Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?
  • More...

Construction—Brazil—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to construction in Brazil published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021).

Authors: Pinheiro Neto Advogados—Júlio César Bueno

1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

Characterised by the large and well-developed agricultural, mining, manufacturing and service sectors, Brazil's economy outweighs those of all other South American countries and it is expanding its presence in the world markets. Today, Brazil is the ninth largest economy in the world (after, among others, the United States, China, Japan, Germany, the United Kingdom and France). With the largest economy and population in Latin America, Brazil presents considerable export opportunities, particularly in areas such as energy generation, construction, infrastructure, safety and security equipment, and metalworking machinery.

To set up an operation to pursue the local market, foreign contractors must be aware of the following:

  1. the special complexity of the administrative regulatory framework and the tax system in Brazil;

  2. the need to follow the requirements of competent authorities to comply with specific rules for the remittance of profits and investments;

  3. the need to have qualified executives to ensure a cultural transition to Brazilian industry practices;

  4. the need to be very careful

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