Brazil's economy is resilient, recently achieving a higher credit rating, and has seen a GDP growth of 4.2% year-on-year in early 2011. It is now the seventh-largest economy globally, bolstered by strong domestic consumption and a booming internet retail market. However, challenges such as a complex tax system and inflationary pressures remain, despite its stable macroeconomic policies.

1. Business in Brazil
- an introduction -
June 1, 2011

2. Recent Significant Developments
 Standard & Poor's nudged Brazil closer on May 23 to a higher credit
rating, a move that reflects a resilient economy at a time some countries in
Europe are suffering downgrades. Brazil was raised to investment grade in
2008 by all three credit rating agencies.
 Brazil's GDP rose by 4.2% year-on-year in the first quarter of 2011. The
figure marks a slowdown from the 6.3% growth rate Brazil posted in the
accumulated 12 months ending on the third month this year.
 Brazil replaced Italy as the world’s seventh-largest economy last year. The
domestic consumption, supported by high demand for commodities, continue
to set the stage for high economic growth.
 Brazil is by far the biggest Internet retail market in Latin America,
accounting for 70 percent of all regional sales. The country also enjoys the
highest per capita spend online in the region – at $42.

3. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

4. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

5. Brazil is an economic powerhouse and is
quickly surpassing some European countries
Rank Country GDP 2010 2011 GDP Rank Country GDP 2010 Per Capita Rank per
US$ bn Growth Est. PPP US$ bn PPP US$ capita PPP
1 U.S.A. 14,658 2.8% 1 U.S.A. 14,658 47,284 7
2 China 5,878 9.6% 2 China 10,086 7,519 94
3 Japan 5,459 1.4% 3 Japan 4,310 33,805 25
4 Germany 3,316 2.5% 4 India 4,060 3,339 126
5 France 2,583 1.6% 5 Germany 2,940 36,033 20
6 U.K. 2,247 1.7% 6 Russia 2,223 15,837 52
7 Brazil 2,090 4.5% 7 U.K. 2,173 34,920 22
8 Italy 2,055 1.1% 8 Brazil 2,172 11,239 71
9 Canada 1,574 2.8% 9 France 2,145 34,077 24
10 India 1,538 8.2% 10 Italy 1,774 29,392 29
11 Russia 1,465 4.8% 11 Mexico 1,567 14,430 59
12 Spain 1,410 0.8% 12 Korea 1,459 29,836 26
13 Australia 1,236 3.0% 13 Spain 1,369 29,742 27
14 Mexico 1,039 4.6% 14 Canada 1,330 39,057 13
15 Korea 1,007 4.5% 15 Indonesia 1,030 4,394 120
Source: IMF (International Monetary Fund)

6. Brazil’s size provides it with natural
resources and a large consumption base
Rank Country Area km² Rank Country Population
(million) (million)
1 Russia 17.1 1 China 1,341
2 Canada 10.0 2 India 1,216
3 U.S.A. 9.8 3 U.S.A. 310
4 China 9.6 4 Indonesia 234
5 Brazil 8.5 5 Brazil 193
6 Australia 7.7 6 Pakistan 167
7 India 3.3 7 Bangladesh 164
8 Argentina 2.8 8 Nigeria 156
9 Kazakhstan 2.7 9 Russia 140
10 Sudan 2.5 10 Japan 127
11 Algeria 2.4 11 Mexico 109
12 Congo 2.3 12 Philippines 94
13 Greenland 2.2 13 Vietnam 88
14 Saudi Arabia 2.1 14 Ethiopia 85
15 Mexico 2.0 15 Germany 82
Sources: IMF (2010 pop.) and CIA

7. Brazil is on par with China and USA on
Brazil’s Significance
three power-driving attributes
Mexico
Countries with population
Countries with area
> 100 million
> 7 million km²
Bangladesh
Russia
Australia Pakistan
Brazil
Indonesia
USA
Nigeria
China
India
Canada
Japan
France
Germany
Spain
Countries with GDP
United Kingdom
> US$ 1.5 trillion
Italy

8. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

9. Brazil’s GDP is resilient and sustainable with
a long term expected growth of 4.2%
7,000 8.0%
7.0%
6,000
6.0%
5,000 5.0%
4.0%
4,000 GDP (R$ bn, current prices)
3.0% GDP (US$ bn)
3,000 GDP (US$ bn; PPP)
2.0%
GDP Growth % (right scale)
2,000 1.0%
0.0%
1,000
-1.0%
0 -2.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
actual forecast
Source: IMF

10. Inflation is under pressure, despite a strong
and consistent monetary policy
Consumer Price Inflation % Current Account Balance - % of GDP
2.0%
7.0%
6.0% 1.0%
5.0%
0.0%
4.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-1.0%
3.0%
2.0% -2.0%
1.0%
actual forecast
actual forecast -3.0%
0.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -4.0%
Key Interest Rate % Exchange Rate R$ per US$
20 2.50
18
16
14
12 2.00
10
8
6 actual forecast actual forecast
4 1.50
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sources: IMF, Banco Central do Brasil.

11. Sound economic policies are attracting FDI
and shielding the country from int’l crisis
Foreign Direct Investment International Reserves
50 350
US$ billions
45
300
40
35 250
30 Total
US$ billions
200
25 Services
20 150
Manufacturing
15
Agriculture 100
10
5 50
0
-
2007 2008 2009
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Contribution to GDP - 2010
Origin of FDI 2009 % of total Agriculture
6%
Netherlands 19
USA 16
Industry
Spain 11 26%
Germany 8 Services
68%
France 7
Source: CIA, Banco Central do Brasil.

12. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

13. Brazil has been achieving trade surpluses
despite a strong valuation of the Real (R$)
Balance of Trade
250
200
FOB (US$ bn)
150
Exports of goods
100
Imports of goods
50
0
2006 2007 2008 2009 2010
Source: Ministério do Desenvolvimento, Indústria e Comércio Exterior

14. The economy is diversified, with
manufacturing playing a key role in exports
Leading Markets 2010 % of total Leading Suppliers 2010 % of total
China 15.3 USA 15.0
USA 9.6 China 14.1
Argentina 9.2 Argentina 7.9
Netherlands 5.1 Germany 6.9
Major Exports 2010 % of total Major Imports 2010 % of total
Primary products 44.6 Intermediate products & 46.2
raw materials
Manufactured products 39.4
Capital goods 22.6
Semi-manufactured 14.0
products Consumer goods 17.3
Special Operations 2.1 Fuels & lubricants 14.0
Source: Secretaria de Comércio Exterior, MDIC

15. Brazil is a net importer of services, having
bought US$3 bn in information services in 2009
Imports of Other Services - 2009
Trade in Services - 2009 Communications,
$166
Construction, $4
50
Personal, cultural and Financial services,
recreational services, Insurance, $1,612
45 $958
Government
$1,815
Other services services n.i.e.,
40 $2,899 Computer and
Travel information,
35 $2,795
Transport
30
US$ billions
25
20 Royalties and licence
fees, $2,512
15
10
Other business
5 services, $15,348
-
Exports Imports
In 2009 Brazil imported a total of US$12 billion in Information & Communication
Technology goods, representing 9.4% of total imports
Source: UNCTAD

16. Brazil is a net exporter of Creative Services,
with strengths in R&D and technical services
Trade in Creative Services - 2009
$7
$6
Audiovisual and related services
$5
Personal, cultural, and recreational
services
US$ billions
$4
Architectural, engineering and
$3 other technical services
Research and development
$2
Advertising, market research and
$1
public opinion polling
$-
Exports Imports
In 2009 Brazil exported a total of US$5.6 billion in architectural, engineering and
other technical services, representing 3% of total exports
Source: UNCTAD

17. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

18. Internet access at the household doubled in
the 3 years to 2009, to 27%
% of homes with: Computer & Internet Penetration
TV 36%
Radio
28% 27%
Cellular Phone 24%
Fixed Line Phone 20% 20%
17%
Desktop 14%
Satellite Dish
Cellular w/ Internet
Game Console
Paid TV 2006 2007 2008 2009
Laptop
Households with Computer Households with Internet
0% 20% 40% 60% 80% 100%
Source: CETIC.br

19. Access from “Lan Houses” is a popular form
of internet access in Brazil
Place of Internet % of All Activities Performed on the % of All
Access Internet Users Internet Internet Users
Home 48% Communication & social 90%
Work 22% Leisure 86%
Online searches for 89%
School 14%
information and services
Other person’s home 26% Training & education 72%
Free public access 4% Financial services 14%
Paid public access 45%
Cellular phone 3%
Other 1%
Source: CETIC.br

20. Brazil has the 5th largest number of internet
users, with 4% of the world total
Country Internet Users (millions) % Penetration
USA 239.2 77.3%
Brazil 72.0 36.2%
Russia 59.7 42.8%
India 81.0 6.9%
China 420.0 31.6%
Source: Internet World Stats

21. The number of .br domains has doubled in
the past 3 years in Brazil
Brazil World Site Address
Rank Rank
1 30 Google Brasil google.com.br
2 1 Google google.com Number of .br domains
3,000
3 2 Facebook facebook.com
Thousands
4 3 YouTube youtube.com 2,500
5 82 Universo Online uol.com.br 2,000
6 89 Orkut Brasil orkut.com.br 1,500
7 8 Windows Live live.com 1,000
8 105 Globo globo.com 500
9 5 Blogger.com blogspot.com -
10 4 Yahoo! yahoo.com Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
11 93 Orkut orkut.com
12 201 Terra terra.com.br
13 9 Twitter twitter.com
14 11 MSN msn.com
15 315 iG ig.com.br
Sources: Alexa, CETIC.br

22. Top growing country for Facebook in May
was Brazil, with growth of more than 11%
Top Growing Countries in May 2011 on Facebook
Source: Socialbakers

23. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

24. Doing Business in Brazil
 Portuguese is the language spoken in Brazil (not Spanish!)
 Relationships and face-to-face contacts are very important
 Taxation laws and fiscal issues are complex and change
frequently
 Labor laws and social costs are burdensome and favor the
employee
 The business culture is sophisticated and westernized
 Laws and contracts are respected and enforced
Source: Enosis Global

25. The South-East region has most of Brazil’s
Brazil’s Significance
wealth creation, driven by São Paulo state
A
8% 5%
13% B
28% 45%
A: North E
56% B: North-East
42% 18% C: South-East C
11% D: South
7% E: Center-West D São Paulo
17%
14%
19%
7% 9%
Population GDP Area
Source: IBGE -2010

26. Contents
 Brazil’s Significance
 Key Economic Indicators
 Foreign Trade
 Internet Usage
 Doing Business in Brazil
 Political & Business Environment

27. Brazil’s government structure is very similar
to the Unites States’
 Official name: Federative Republic of Brazil.
 Form of state: Federative republic.
 The executive: The president, who is elected for a term of four years,
chooses a cabinet, which s/he heads .
 Head of state: Elected president, who controls the budget.
 National legislature: Bicameral national Congress: 81-seat Senate (the
upper house) with representatives of 26 states, plus the federal district of
Brasilia; 513-member directly elected Chamber of Deputies (the lower
house). The 26 states and the district of Brasilia each has a legislature.
 Legal system: Each state has its own judicial system; the country has a
system of courts for dealing with disputes between states and matters
outside the jurisdiction of state courts.
Source: EIU

28. Despite a strong democracy, businesses
suffer from a burdensome tax system
 National government: Dilma Rousseff is Brazil’s first female President,
having succeeded in January 2011 the very popular Luiz Inácio Lula da
Silva.
 National elections: Municipal elections every four years, with the next due
in October 2012; presidential, congressional and state elections every four
years, with the next due on October 2014. A consolidated democracy has
led to peaceful transitions and continuity of sound macroeconomic policies.
 Business Environment: Modest improvements, mainly driven by the
consolidation of macroeconomic stability and better domestic financing
conditions, will keep the country’s position broadly stable in the global and
regional rankings. But the tax system will remain complex and burdensome,
the pension system will weigh on public-sector finances and vested interests
will continue to distort productivity gains.
Source: EIU

29. Contact information
James P. Locke
CEO
Enosis Global LLC
+1-302-766-7926
jlocke@enosisglobal.com