1. BRAZIL, Experience and facts when establishing business Making strategies work - it`s all about people Marcela Mieres Eneroth & Mats Wärnling

2. BRAZIL FEATURE Federative Republic of Brazil  Capital: Brasília  Population: 190 millions  Currency: Real - R$  Idiom: Portuguese  President: Dilma Rousseff  Minimum wage: 2266 €  Unemployment rate: 5,7%  Biggest country of South America  5th biggest country of the world  7th biggest economy of the world Source: IBGE 2010

3. BRAZIL – Market Place Profile Ethnic Composition 2010 47,73%43,13% 7,61% 1,09% 0,43% Workforce by Occupation 66% 28,5% 5,5%

4. BRAZIL - Market place 3 Different Angles Potential market 55% can’t buy today 5% don’t care of the price A typical image of Brazilian market potential ! Babies’ milk market: Brazil Agenda: FIFA World Cup 2014, MU Brazil official recruiter Rio de Janeiro, Olympic Games 2016 Brazil Agenda: FIFA World Cup 2014, MU Brazil official recruiter Rio de Janeiro, Olympic Games 2016 Population with a salary level > 2250R$/month (source PwC) Around 6 to 8 millions of Brazilians become new consumers each year…

5. BRAZIL SCENARIO Growing Industries in Brazil * Source : Survey with more than 1,500 executives in Brazil, which 83% have salaries between $ 120k to $ 300k per year and 17% over $ 450k per year Education Logistics Energy / Green Technology / Green Jobs Health/ Pharmaceuticals Construction Hotel Business Infrastructure IT Telecomunications Utilities: Ports, Airports; Energy (including refinery) Oil & Gas

6. Culture, Language and Religion Primary attribute: Brazil is proud to be different. Brazilian culture is an ethnic and cultural mixing of Indians, Portuguese and Africans. Italian, German, Spanish and Japanese immigrants settled Brazil and created a multicultural and multi-ethnic society. Brazil was a colony of Portugal for over 3 centuries. Brazil holds Amerindian influences in its culture, food and language. Brazil has the largest Catholic population in the world. BRAZIL SCENARIO

7. Living and working in Brazil Cost of Living – Sao Paulo (10th) ranked as the most expensive city in the world, Health / Doctors – Private healthcare is of a good standard, but very expensive. Banking – Technologically sophisticated banking sector. Source : Mercer 2011 - survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. BRAZIL SCENARIO

8. Facts Salaries – Due to the growth, the salaries in general are overestimated compared with other countries. – Average Manager: 5.250 to 6.500 € per month – Average Director: 8.700 to 13.000 € per month – 13 salaries per year Benefits – Standard: health insurance, life insurance and food and transport contributions. – 30 days vacation (with additional 1/3 salary) BRAZIL SCENARIO

9. Establishing Business BRAZIL SCENARIO Challenges for companies establishing business in Brazil: Bureaucracy: to legalize a business in Brazil. It is necessary to have a legal representative. It may take 6 to 8 month to get a working visa for a foreign person; Labor Law: Employment laws in Brazil are extremely complex and it is necessary to have legal adviser to support the company; Expatriates: The legal resident documents and banking relations are also very complicated and demand a high level of patience to complete the process; Fiscal tax issues: a service company who has to pay fees to foreign headquarter has to pay 44% tax over every invoice paid abroad (until the company gets profits).

10. Struggle for Talents: Brazil offers strong international profiles, but in small quantities Struggle for Retention: Strong volatility; People can move for a small salary difference. Short term Perspectives: Not very easy to motivate people within 3-5 years business plan; Usual to find candidates with short time experience (less than 2 years) even at executive level. Candidate Search : Direct search is a must have and has to be manage in 4/6 weeks (as faster as better) to attract the right profiles (very aggressive market) 2 main Problematics identified on Latam Market: - Leadership for Top Management & Executives - Management skills for Middle managers Establishing Business BRAZIL SCENARIO

11. The 3 Positions more Searched and Hunted in Brazil: - Engineers with good English level (whatever the specialty) as demand is booming. - Business Development positions: to detect opportunities, to close deals - CFO, Head of Finance positions: to support business for finance perspective Salary Level: São Paulo (International Companies) and Rio de Janeiro (Oil & Gas), in particular, we are going through a salary bubble (for e.g: Some business developers can have 17 month salary bonus). Growth of salary level can be rise by 15-20% a year for some specific positions of some booming industries. Organization Capabilities: the majority of the 5 to 10 years companies located in Brazil have the same business plan: to double revenue in 3 to 5 years. This means a lot of move in organizations and a very active job markets… Establishing Business BRAZIL SCENARIO

12. Business Advice Family is #1 – Brazil is a collectivist society which places family at the center of its social structure. – Families tend to be large and close-knit, providing members security and connections. Relationship – Similar to the importance placed on family, Brazilians depend heavily on relationships with others. Brazilians do business with people, not companies or organizations. Therefore, it is vital to take time getting to know your counterparts and letting them get to know you. Sometimes is difficult to separate personal and professional issues. – Topics for conversation: soccer, children, family. AVOID politics, religion, the rainforest and if Brazil will be ready for the World Cup or the Olympic Games. – Personal contacts in Brazil are essential to business. BRAZIL SCENARIO

13. Business Advice Time – Brazilians approach time in a very relaxed and flexible manner; – Punctuality and precise plans are not so common; Negotiation Process – Expect questions about your company since Brazilians are more comfortable doing business with people and companies they know. – Wait for your Brazilian colleagues to raise the business subject. Never rush the relationship- building time. – Brazilians take time when negotiating. Do not rush them or appear impatient. – Often the people you negotiate with will not have decision-making authority. Decision is made by top executives. BRAZIL SCENARIO

14. The Latam Solution MERCURI URVAL BRAZIL OUR CONSULTING TEAM MU Brazil has a good mix of senior consultants from Latam and Europe, and has capability to deliver the full range of business solutions. OUR EXPERIENCE MU Brazil is well established in São Paulo and has done projects in all important markets in Latam. AREAS OF EXPERTISE Search & Selection, Talent Management, Business Coaching, Capability building Management, Leadership Improvement.