Bending the law for doing business

Doing business in Brazil is sometimes an incomprehensive subject to foreigners, due to cultural differences. Bureaucracy, taxes and labor law are the main challenges for entrepreneurs. In this week’s edition of The Economist there is a quite interesting article about these issues. We quote the magazine:

Starting a business takes 152 days and requires 18 different procedures, according to the IFC's annual worldwide “Doing Business” study. It takes 2,600 hours for a medium-sized business to keep up with its taxes each year. The same hypothetical business would pay 69% of its second-year profits in tax, if it played by the rules and did not receive special tax breaks.

Brazilian entrepreneurs show an unsurprising willingness to bend the law. “Essentially what determines good entrepreneurship in Brazil is the ability to navigate around the bureaucracy,” suggests Mr. Djankov.

These opinions may sound too exaggerated, but the reality is very close to them.

To read the full article, click here.