Market Entry Strategies for Bangladeshi SMEs in Brazil

Md. Joynal Abdin
Founder & Chief Executive Officer, Trade & Investment Bangladesh (T&IB)
Executive Director, Online Training Academy (OTA)
Secretary General, Brazil Bangladesh Chamber of Commerce & Industry (BBCCI)

Brazil – Latin America’s largest economy offers a massive consumer market (203+ million people) and diverse opportunities for foreign investors[1]. As a MERCOSUR and BRICS member, it encourages trade and investment, but also has complex legal and tax requirements. Bangladeshis entering Brazil should plan carefully. For context, Brazil’s economy reached roughly US$2.19 trillion (2024)[1], and key industries (manufacturing, agriculture, mining, energy) are concentrated in the Southeast (São Paulo, Rio de Janeiro, Minas Gerais)[1]. The country’s large market and strong demand for international products make it attractive, yet starting a business requires compliance with multi-layered regulations. This guide walks through how to do business in Brazil, from legal setup and taxes to import/export formalities, distribution channels, and initial investment considerations for an SME showroom.

How to Start a Business in Brazil

Foreign entrepreneurs can establish Brazilian companies, but must follow a formal registration process. The first steps involve choosing a legal structure (most SMEs use a limited liability company, Sociedade Limitada – LTDA) and reserving a company name with the state Junta Comercial (Board of Trade). You then file incorporation documents (e.g. Articles of Association) at the Junta Comercial of the state where you will operate[2][3]. Upon filing, you apply to Receita Federal (Brazil’s Federal Revenue) for a CNPJ (national corporate tax ID)[3].

A simplified roadmap is: plan the business; choose entity (e.g. Ltda or Corp); reserve a compliant name; register with the Junta Comercial (state Board of Trade)[2]; enroll shareholders and directors at Receita Federal; obtain the CNPJ tax number[2][3]; then secure local licenses and permits. Wise reports the formal incorporation typically takes 60–90 days to complete[2] (excluding bank account opening) and involves working sequentially with multiple agencies. Local experts or lawyers are often used to streamline the process.

Registration requirements and authorities: Beyond the federal CNPJ, Brazilian companies must also obtain:

A municipal operating license (Alvará de Funcionamento) from the local city hall, certifying your business location and activities meet zoning and safety rules[4]. This is mandatory for all businesses. Processing can take ~6–8 weeks[5] and typically requires submitting corporate documents, ID of partners, lease or property deeds, and paying a fee.
A state tax registration (Inscrição Estadual) with the state tax authority if you will sell goods or produce (i.e. to pay ICMS VAT). Service-only businesses may be exempt from this.
A municipal tax registration (ISS) if you provide services (service tax at 2–5%). In many cities, ISS registration is bundled with the Alvará.
Industry-specific permits: For example, food, drugs or medical devices must register with ANVISA (Brazil’s health regulator) before import or sale[6][7]. Other sectors (telecoms, oil/gas, finance, etc.) have special agencies (e.g. ANATEL, ANP, Banco Central) requiring additional licenses[8].

Registration fees and timelines: Company formation fees vary by state and company type. As a ballpark, Junta Comercial filing fees range from about BRL 1,000 to 2,000 (USD ~$200–400)[9]. Name reservation may cost ~BRL 500, notary and stamp duties another BRL 1,000+. Translation and consular fees apply if foreign documents are used (Wise estimates total setup may run USD $3,000–$10,000, or under $500 if entirely DIY)[10]. Overall, plan on 2–3 months to complete official registration and licensing[2][5]. Note: operating legally also means registering for payroll taxes and social security if you hire staff, and opening a Brazilian corporate bank account for transactions.

Legal Entity and Compliance

Foreign-owned companies in Brazil can operate as a Brazilian subsidiary or as a branch, but the subsidiary (Ltda or S.A.) is most common for SMEs. Directors and shareholders (foreign individuals) will need a Brazilian tax ID (CPF) – obtainable via Receita Federal website – and to be recorded in the company’s documents[11]. Permanent residency or a local representative may be required for certain sectors. Importantly, accounting records must follow Brazilian standards (often requiring a local accountant) and annual reporting is mandatory.

Brazilian Tax Regime

Brazil’s tax system is multi-layered and generally heavy. The headline corporate tax rate is about 34% on profits (comprised of 25% Corporate Income Tax [IRPJ] + 9% social contribution [CSLL])[12]. On top of that:

Taxes on turnover: Employers pay payroll taxes (around 20–23% on wages) and companies pay social contributions (PIS/COFINS) on revenue – 1.65% plus 7.6% on gross sales[13] (a combined 9.25%). Imports face higher PIS/COFINS (total ~11.75%)[14].
Value-added taxes: There is no single VAT. Instead, goods face ICMS (state VAT, 17–18% typical)[15] and IPI (federal excise tax on manufactured goods, ~0–15% on most items)[16]. Services face ISS (municipal service tax, typically 2–5%)[17]. These are non-cumulative (credits allowed under complex rules). Exports of goods and most services are usually tax-exempt (zero-rated).
Simplified regime (Simples Nacional): Small businesses with annual gross revenue up to roughly R$4.8 million can opt into Simples Nacional, a unified tax regime that consolidates federal, state and municipal taxes into a single payment with lower rates. This benefits many SMEs by reducing paperwork and rates, though it imposes strict revenue ceilings (consult a local tax advisor for eligibility).

Given this complexity, foreign SMEs must budget for professional tax/accounting help and ensure compliance with monthly/quarterly filings (DAS unificado for Simples or separate filings for IRPJ, CSLL, PIS/COFINS, ICMS, ISS, etc.).

Registering for Trade: Exports & Imports

Exporting from Brazil: Brazilian companies export through the federal SISCOMEX system (Integrated Foreign Trade System). Any exporter must register with the Foreign Trade Secretariat (SECEX) via SISCOMEX. Fortunately, exports generally require less pre-approval than imports – though agricultural exports may need sanitary and phytosanitary clearance. Non-restricted goods do not need a prior license; shipments are declared at export under the NCM customs code.

Importing into Brazil: To import goods for sale in Brazil, a foreign SME typically must establish a Brazilian CNPJ or partner with a local distributor. Imports require:

SISCOMEX Registration: Brazilian importers register for “RADAR habilitação” in SISCOMEX to get clearance to import. (This grants access to the customs system.)
Import Licenses: Many products need import licenses or permits from sectoral agencies. For example, pharmaceuticals, food additives, chemicals, firearms, etc. may need advance approval from ministries (e.g. ANVISA, MAPA). These licenses are often requested before shipment, though some can be obtained post-shipment prior to customs clearance[18].
Paying Duties and Taxes: Imported goods incur multiple charges on release: customs Duty (II, product-specific), IPI (see above), PIS/COFINS on the CIF value, and ICMS (state VAT on import)[19][20]. Altogether, import taxes can reach 40–60% or more of CIF value (depending on product). Brazil is part of Mercosur, so common external tariff rates (usually 10–20%) apply to non-Mercosur imports, with some exceptions[21]. Electronic invoicing and detailed classification (NCM codes) are mandatory.

In practice, many Bangladeshis use local agents or distributors who handle SISCOMEX filings and customs. For exports from Bangladesh to Brazil, partnering with a Brazilian importer who takes care of import formalities is common.

Market Entry Strategies for Bangladeshi SMEs in Brazil — Brazil Bangladesh Chamber of Commerce & Industry (BBCCI)

Distribution Channels and Wholesale Markets

Brazil’s retail and distribution landscape is unique:

Modern Retail: Large supermarket and retail chains (e.g. Carrefour, GPA/Pão de Açúcar, Assaí, Magazine Luiza, Lojas Americanas, Mercado Livre e-commerce) dominate consumer goods. These chains often import directly or through specialized distributors. For example, major chains may bring in foreign products via their own import operations[22]. Selling to such retailers usually requires either a local subsidiary or a partnership with an established importer/distributor.
Distributor Networks: Many businesses rely on authorized distributors or agents. Given Brazil’s size, it’s common to appoint regional distributors for different states. Distribution networks can include trading companies or local sales agents. Close local partnerships and understanding regional markets are key[23].
E-commerce and Direct Sales: Online platforms (Mercado Livre, Amazon Brazil, local players like Magazine Luiza’s marketplace) have grown rapidly, even for SMEs. eCommerce bypasses some traditional distribution, though Brazilian consumers prefer Portuguese listings and local payment methods.
Franchising: For some Bangladeshi SMEs in retail or food, franchising is a proven entry model in Brazil. U.S. and international brands have found success through master franchisees in Brazil[24]. The Brazilian Franchise Law (Lei de Franquias) governs this, and royalties/payments must comply with Brazilian contracting and consumer laws.
Wholesale Markets: Brazil also has large wholesale hubs, especially for food and perishables. Each state usually has a CEASA (Central de Abastecimento) – a wholesale market operated by state/mixed-capital companies. For example, São Paulo’s CEAGESP/ETSP is one of the world’s largest produce markets, handling ~280,000 tons of fruit, vegetables, fish and flowers per month[25]. These supply fresh food to retailers and restaurants nationwide. In major cities, there are also specialized wholesale districts: e.g. São Paulo’s Brás (textiles, apparel), Rua 25 de Março and Bom Retiro (clothing, general merchandise) serve small retailers. International SMEs often approach these markets via local importers or wholesalers rather than direct.

Initial Investment and Showroom Setup

Renting retail space and fitting out a showroom incurs significant cost. Commercial rents vary widely: prime São Paulo retail may exceed R$50–100 per m²/month, whereas second-tier cities are cheaper. (For a rough idea, R$57–58/m² is reported for central SP comercial space[26]; 500 sq ft ≈46 m². At R$60/m², rent alone would be ~R$2,760/month (~US$550).) Budget also for security deposit (typically 3–6 months’ rent), store fittings, inventory and employees. A 46 m² (500 ft²) showroom might need on the order of tens of thousands of dollars total to open (rent deposits, display fixtures, initial stock, registration fees, etc.). Exact costs depend on city and neighborhood. Consulting local real estate listings or brokers will give current rates. Likewise, local customs/delivery logistics should be factored into initial capital.

Key Takeaways and Next Steps

Expanding to Brazil offers Bangladeshi SMEs access to a huge market and trade zone, but requires meticulous preparation. The legal and tax setup involves multiple registrations: incorporate at the Junta Comercial[2], get a CNPJ[3], secure municipal and state tax IDs and licenses[4][27], and comply with federal SISCOMEX registration for trade[6][7]. Costs can range from a few hundred to a few thousand dollars in fees[9], plus professional service fees. Brazilian corporate income tax is high (~34%)[12] and the indirect tax system is complex (ICMS, ISS, PIS/COFINS, etc.)[28][13], so tax planning is crucial.

On the commercial side, identify the best distribution channel: direct export to large retailers, appointment of local distributors, franchising, or e-commerce. Research regional markets: major hubs like São Paulo and Rio have the bulk of purchasing power[1]. Explore partnership with Brazilian companies who know the wholesale markets and consumer preferences. Use networks like B2Brazil or trade missions to make contacts.

Conclusion: Brazil’s market entry demands diligence but can be highly rewarding for SMEs with the right strategy. Embrace local regulations and tax obligations early (consider hiring a local lawyer/accountant), and leverage Brazil’s commercial infrastructure (such as CEASA, import platforms, franchising networks) to introduce your products. With careful compliance and a well-planned entry, Bangladeshi firms can tap into Brazil’s vast economy and grow their business successfully.

[1] Brazil – Market Overview

https://www.trade.gov/knowledge-product/brazil-market-overview

[2] [10] [11] Starting a Business in Brazil as a Foreigner | US Guide – Wise

https://wise.com/us/blog/starting-a-business-in-brazil-as-a-foreigner

[3] [4] [5] [7] [8] [13] [15] [16] [17] [27] [28] Business License Brazil: Who needs one and how to apply – Commenda