Recently, Brazil has become an attractive destination for investment capital. Local and foreign investors had committed $28 billion in venture and private equity capital to Brazilian companies in 2008. This was up from $6 billion in 2004. Of that $28 billion, there is $12 billion left to invest over the next few years.

Pension funds have contributed to more than half of the private equity and venture capital funds. This is because they are allowed to invest up to 20% of their funds into alternative investments.

Brazil competes with India as one of the most attractive choices for private equity and investments, behind China.  The country has a large, stable, growing economy with a modern financial system that largely escaped the global financial crisis.

At the same time, Brazil has its share of challenges that make investors hesitant about putting their money into the country. Taxes are high compared to the US and labor laws are inflexible. Brazilian taxes can account for nearly 40% of an employer’s payroll expenses.

While there are cons about investing in Brazil it appears investors believe the pros out weight them.

For further information about this topic, visit this website: http://www.businessweek.com/technology/content/jun2009/tc20090628_830521.htm?chan=technology_technology+index+page_top+stories

Written by Shosh Pincus

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