Ernst & Young: UK business attracted to Brazil

By Rob Starr, Content Manager, Big4.com

According to Ernst & Young’s first annual Brazilian Attractiveness Survey, out today, the UK is now the second largest investor into Brazil after the US, fuelled by a wave of confidence in the attractiveness of the country as a place to do business. The total number of UK projects in Brazil last year (45) was up 125% on 2010, propelling the UK from fifth to second in just 12 months, with the US leading at 149 projects. 58% of total FDI projects from the UK were in the Southeast region of Brazil, primarily Sao Paulo.

The business services sector in Brazil attracted the largest number of projects (17 in total – 38% of total UK FDI projects) from the UK in 2011. However, the most lucrative UK investments, in terms of value and job creation, were in the mining and metals industry – with 12,482 jobs created and a total value of US$8.63b for six projects. This was boosted by the US$5b investment by Mir Steel UK into a joint venture with Cosipar, the Brazilian pig iron producer, in 2011.

UK investors expressed a strong need for improvement in the business environment and operational conditions. When asked how the country could improve its competitiveness in the next year, 26% of UK investors cited improving the tax system, 24% infrastructure and 22% said improving the education system.

Of those executives surveyed in UK companies (50) more than half said they are considering establishing or developing their business in Brazil in the near future. Nearly 80% believed the country’s attractiveness as an investment destination would improve in the next three years.