World City Guide

Business

Business Profile
Rio is Brazil’s top tourist attraction and consequently the city’s main industries revolve around tourism and the service and financial sectors. Banking is important and the city is home to the second most active Stock Exchange in Brazil, the Bolsa da Valores do Brasil. Rio has the second best economy in South America, behind that of São Paulo, also in Brazil. Rio is also a major player in Brazil’s industrial production and the city’s industries are responsible for producing goods such as processed foods, chemicals, pharmaceuticals, clothing, furniture and textiles.

Brazil has a large economy with well-developed mining, manufacturing, service and agriculture sectors. After a few slow years, the economy is growing again (GDP growth was 5.2% in 2004), but annual inflation (7.36% in February 2005) and the country’s unemployment level (10.6% in March 2005) remain high. The city’s unemployment rate of 8.5% (in December 2004) remains a little lower than the national average. Nevertheless, the disparity between rich and poor is wide and particularly evident in the city, where crime has become an unofficial industry in its own right.

The economy became stable following the introduction of a new currency, the Real, in 1994. Introduced at a value level with the US dollar, the development brought renewed confidence and an economic boom to the country. But this success came to an end when world recession and budgetary mismanagement finally led to the devaluation of the Real in 1999. The IMF soon resumed lending to Brazil and the economy bounced back against all expectations. But Argentina’s debt default and devaluation of the Peso in January 2002 led to further instability in the region. Brazil’s economy and currency looked set to follow suit, until the IMF came forward with a US$10 billion loan package that stabilised the country. The new president, Luiz Inacio Lula da Silva, of the left-wing Partido dos Trabalhadores (PT) took office on 1 January 2003. The business community at first worried that the president’s social policies would harm the economy but his government appears to have held confidence. However, many people are upset that the promised social reforms have not materialised.

Foreigners have been allowed to invest in the Brazilian Stock Exchange since 1996. To entice more foreign investment, the government abolished trade restrictions, privatised industries and lowered tariffs. Due to the number of consulates in the city, many companies favour Rio as a South American base. Multinational companies and key Brazilian companies based in Rio include Shell, Texaco, Esso, Petrobras, Embratel and Petroleo Ipiraga. Most businesses are located in the Centro area of the city or in Barra de Tijuca, where Rio’s massive conference centre, Riocentro, is situated. A new convention centre is being constructed in the downtown area, which will boost Rio’s image as an international business destination.

Business Etiquette
Business cards are exchanged by way of introduction and businesspeople expect to deal with someone of an equal business status. Dress code is generally smart and suits are necessary when meeting heads of companies or attending semi-formal social functions in exclusive clubs and restaurants. Normal business hours are Monday to Friday 0900–1800. Quite often, however, business is done over dinner in a restaurant. Visitors would be advised to bring gifts, such as local confectionery.

Brazilians are more casual than their Latin American counterparts but it is important to dress neatly and offer respect. At the beginning of a conversation, at least, strangers should always be addressed with the formal ‘o senhor’ or ‘a senhora’ until they use the informal ‘tu’ or ‘você’. Professional people will often be heard being addressed as ‘o doutor’ (‘doctor’), whatever their line of business. Although many executives will speak English, it is advisable for business visitors to conduct business in Portuguese if possible.