With an estimated gross domestic product of US$ 2.2 trillion for 2014, Brazil has the seventh largest economy in the world and the largest in Latin America [1]. This thriving domestic market has placed Brazil in a good position to start investing and many established Brazilian businesses are doing so by shifting their attention across international waters. From large corporate companies like Banco do Brasil to smaller retailers like Leblon Cachaça, many have already expanded their businesses to the United States to take advantage of the benefits the U.S. market has to offer. While developing a business internationally may seem risky, here are 5 reasons Brazilian companies have outweighed the cost of moving or expanding their business abroad to the U.S:
1. The Time to Invest: Brazilian firms are in a good position to start investing.
As mentioned above, aside from its adversities and political issues, Brazil’s economy is still thriving. The commodity market is driven by a rising middle class that has a strong purchasing power, a result from an increase of work and education opportunities over the recent years. Needless to say, the average household’s ability to buy goods and services are directly benefiting Brazilian businesses, providing them capital to grow in a number of ways.
2. U.S. Need for Foreign Investment: Investments by foreign firms are important to U.S. economic recovery.
It is no secret that the U.S. had suffered a financial crisis not too long ago, but the rate in which the country is managing to recover is reliant on it being a recipient of foreign direct investments [2]. Helping to fund the growth and expansion of the U.S. economy are businesses all over the world, including Brazil, and the U.S. will continue to rely on such businesses to promote capital formation, employment, productive capacity, and new technology in their country [3].
3. Benefits of New Markets: Advantage of foreign market for resources and product competition.
Businesses can be motivated to seek new markets when their product or service has saturated sales in the domestic market. Besides the additional capital that can be made from oversea expansion, the advantage of a foreign market is the prospect that the business’ product or service is exclusive and better than the competitors’.
4. Government Incentives: U.S. offer tax credits and incentives to attract global manufacturer investments.
What makes the U.S. so attractive to international businesses looking to invest overseas are the incentives that several U.S. states and cities will give to foreign manufacturers. Recognizing the impact a U.S.-based manufacturing company will have in terms of jobs for Americans, the country offers tax credits, investment incentives and trade access to neighboring countries Mexico and Canada.
5. Wealth of U.S. Population: The United States is a wealthy country.
The U.S. market is stimulated by low inflation and low unemployment, supporting its economic stability. And with a median annual household income of US$70,597, the average American consumer is incredibly capable in their consumption of goods and services [3]. The travelers that visit the country each year and the combining domestic and foreign purchasing power makes the U.S. consumer market one of the best globally.
There has never been a better time for Brazilian companies to expand their products and services to the U.S. Market.
ReachOut Business Solutions is committed to offering effective marketing strategies and providing avenues your business can explore to further distinguish your product. As a business consulting firm that assists Brazilian companies achieve success entering the US market, ReachOut is an expert in the areas of sales and marketing, technology, e-commerce, operations, distribution, accounting and human resources.
[1] According to Brazil GDP Annual Growth Rate
[2] According to Say Bom Dia to Brazilian Businesses
[3] According to Investing in the United States
