BRAZIL IN 2025
Economic and Institutional Fundamentals – Sectoral Analysis by the Brazil Committee of the CCE
SUBJECT: Summary of the Brazil Guide by the French Foreign Trade Advisors – CCE Brazil Committee
In a world full of turmoil, diplomatic tensions, and military conflicts, Latin America, including Brazil, seems more than ever a region of opportunities, far removed from the crises in Europe, Asia, Africa, and the Middle East.
France has an exceptional and unique tool to support exports, thanks to the Team France Export, coordinated by the French Embassy in Brazil: the CCE Brazil Committee; the Regional Economic Service; the France-Brazil Chamber of Commerce and Industry; Business France; the French Development Agency; Bpifrance; Atout France; French Tech; INPI; and the customs attaché.
This document is a summary of a broader work carried out by the CCE members of the Brazil Committee, under the coordination of our General Secretary, Bertrand de Solere. It is addressed to investors, professionals, and anyone interested in trade and business in Brazil: Doing Business In Brazil 2024-2025.
We would like to especially thank the teams of the Regional Economic Service (SER) for their support and contribution in reviewing this work.
Frédéric Junck
President of the CCE Brazil Committee
1 – The French Foreign Trade Advisors (CCE)
The French Foreign Trade Advisors (CCE) are volunteer professionals selected by the French government for their expertise in international trade. Coming from various sectors, they assist French companies in their international development by leveraging their networks and experience. Their mission is based on four pillars: providing advice to public authorities to strengthen France’s economic competitiveness, supporting companies in their export strategies, training young talents through educational programs and mentoring, and promoting the economic attractiveness of France abroad. With a presence in over 150 countries, the CCEs play a key role in enhancing trade exchanges and French economic influence worldwide while helping to tackle the challenges of globalization and economic transition.
The Brazil Committee consists of 50 members, including representatives from leading French multinational companies across various economic sectors such as retail, energy, infrastructure, defense, environment, logistics and transportation, banking, insurance, healthcare, consumer goods, agribusiness, communications, cosmetics, tourism, education, human resources, and the automotive industry. French entrepreneurs in Brazil complete this committee, which is chaired by Frédéric Junck with a 10-member bureau.
2 – French Presence in Brazil
In September 2024, three French groups announced investments and contracts worth USD 4 billion in Brazil in just one week, strengthening their presence in key sectors. CMA-CGM acquired 48% of Santos Brasil, the main port operator and owner of the largest container terminal in South America, for USD 2.4 billion. VINCI won the concession for a strategic highway linking Belo Horizonte to Cristalina, committing to invest USD 1.2 billion. ENGIE won a tender to build 780 km of transmission lines across several states with a USD 550 million investment, consolidating its position as a private energy leader in Brazil.
Beyond these recent operations, the French presence in Brazil is historic and solid. With over 1,150 subsidiaries and USD 44 billion in cumulative investments, France is the 4th largest foreign investor in Brazil. French groups employ more than 500,000 people in Brazil, making French companies the largest private employers in the country.
Brazil, with its 213 million inhabitants, and MERCOSUR constitute a strategic market for French investors. Companies benefit from high operational margins in a stable political and legal framework, although patience and strong financial backing are often needed. Finally, Brazil and Latin America are distanced from the major conflicts destabilizing the Western world.
3 – General Overview of Brazil
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The 5th largest country in the world, with 8.5 million km²; the 6th most populous country with 213 million inhabitants; the largest economy in Latin America; and the 9th largest GDP in the world in 2023, behind Italy and ahead of Canada (according to IMF projections from October 2024).
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Monetary Stability: Since the end of hyperinflation in 1993, Brazil has implemented an economic policy based on a “tripod”: (i) floating exchange rates, (ii) an inflation target, and (iii) budgetary balance. This framework has been adopted by all governments since Fernando Henrique Cardoso, ensuring economic stability. However, in 2024, Brazil faces challenges, including extraordinary spending due to climate-related disasters, which have widened the budget deficit and led to a depreciation of the real.
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Drivers of Brazilian Growth: Brazilian productivity has grown by only 20% in 40 years, compared to 65% in the United States. Historically, the Brazilian economy has favored protectionist structures, limiting competitiveness. The increase in productivity over the past 40 years is due to (i) urbanization, (ii) population growth, (iii) women entering the labor market, (iv) better education for the workforce. Since 2010, agribusiness has been the major contributor to growth.
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Investment Needs: Brazil’s investment rate, at 17.8% in 2022, is lower than the global average and that of comparable countries, creating an investment shortfall estimated at USD 80 billion annually. Budgetary and constitutional limitations reduce the public sector’s capacity for intervention, forcing the government to collaborate with the private sector and banks to finance development needs, such as basic sanitation. Despite being the 9th largest economy in the world, Brazil remains in a phase of economic catch-up.
Investment Support Mechanisms:-
Public Instruments: Brazil uses various instruments to promote development. Constitutional funds financed regional projects with USD 12 billion in 2023, insufficient to meet demand. Public and development banks, including BNDES with a portfolio of over BRL 550 billion (USD 90 billion), play a key role, as do multilateral banks (IDB, NBD) and bilateral ones (AFD). Tax incentives, totaling USD 106 billion, support infrastructure but are often criticized for inefficiency.
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Foreign Investment: Foreign investments (USD 62.4 billion in 2023) are crucial for Brazil, offsetting a traditional current account deficit (-USD 24.5 billion in 2023) and strengthening its balance of payments. With fixed capital formation (FCF) needs estimated at 20% of GDP to sustain growth, but an investment rate stagnating at 17%, the country remains attractive due to an equal legal regime for foreign capital, favorable tax policies, and simplified entry conditions.
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Political Structure: Upon returning to democracy in 1985, Brazil adopted a federal presidential system modeled on the United States, but with a formal Constitution imposing uniform social and economic norms. Brazilian federalism strikes a balance between French decentralization and U.S.-style central federalism. Federal laws override state and municipal norms. Politically, the country is fragmented, with more than 20 parties represented in Congress, lacking discipline but capable of significant reforms through consensus. The Supreme Court dominates the executive and other institutions.
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Recent Reforms: Brazil is rapidly modernizing, integrating technological advancements and legal reforms. Innovations such as PIX, fintechs, and the digitization of public services are enhancing efficiency. Major legal reforms have been implemented: the labor reform of 2017 relaxed employer-employee relations; the 2019 Economic Freedom Law reduced bureaucracy; and the 2023 tax reform simplified a complex system with a unified VAT, promising increased growth. Laws like LGPD (data protection) and the anti-corruption law promote transparency. In 2021, a legal framework for startups was created to foster innovation. The 2017 immigration law facilitates the welcome of talent, essential for addressing the country’s demographic aging. These measures, combined with modern infrastructure and a more attractive legal environment, position Brazil as a promising market for investors.
4 – Sectoral Analysis
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Human Resources and Employment Market: As of the third quarter of 2024, Brazil’s labor market has 103 million employees, marked by significant informality and a shortage of skilled workers in key sectors such as technology and engineering. The services sector dominates the economy (70% of GDP), followed by industry and agriculture. The 2017 labor reform introduced more flexibility in contracts and layoffs, simplifying procedures. Brazilian leadership is evolving towards a more collaborative approach, integrating modern methods. Companies are adopting AI tools and hybrid work models to improve talent management. However, social and economic inequalities remain a challenge, limiting access to education and opportunities. Companies are launching initiatives to promote diversity and inclusion. The labor market is evolving with an increased adoption of technologies and modern practices, but disparities and poor educational quality still hinder development.
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Vocational Training: Vocational training in Brazil is crucial due to historically low unemployment (6.4% in the third quarter of 2024) and a shortage of qualified labor. In 2024, companies invested BRL 1,200 per employee, though this remains below international standards. Challenges include uneven digital infrastructure, lack of public support, and a weak culture of skills management. However, the Year of France-Brazil 2025 offers opportunities for French companies, notably through programs in international skills, educational technologies, ecological transition, and professional retraining. These investments can help address the skills gap while reinforcing bilateral cooperation.
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Internet and E-Business
Brazil has 188 million internet users (88% of the population) and 144 million social media users, driven by advanced mobile connectivity. E-commerce generated USD 37 billion in 2023, supported by growing consumer confidence. Fintechs are revolutionizing payments through solutions like Pix and Drex, strengthening financial inclusion. EdTech companies are transforming education through digital platforms, supported by government initiatives aimed at democratizing access to learning and overcoming historical educational challenges.
Civil Construction (Cement and Tiles)
Brazil stands out in the cement and tile markets for its production capacity and sustainable practices. The country ranks 6th worldwide in cement production, with 62 million tons produced in 2023, supported by programs such as “Minha Casa, Minha Vida.” It is also the 3rd largest tile producer globally, with 800 million m² produced annually, innovating through eco-friendly technologies. Both sectors are focusing on decarbonization and modern infrastructure to meet the growing demand for construction and renovation.
Architecture and Urban Planning
Brazil’s construction sector offers great opportunities but requires an understanding of its specificities. Public procurement is complex and largely dominated by private players, who influence urban planning and master plans. Architecture, less regulated than in France, is regaining quality after a period of rapid construction. Sustainability is advancing thanks to private initiatives, despite the high cost of green technologies. The country remains a promising environment for innovation and sustainable housing.
Sanitation
In 2022, 48% of Brazilians lacked access to sanitation services, and 17% lacked access to treated water. A 2020 law ended the public companies’ monopoly on sanitation and set targets for universal access to treated water and sanitation by 2033, requiring USD 160 billion in investment. Private companies, used by only 6% of municipalities, account for 20% of total investments. This reform promises to boost the sector but requires a stronger legal framework and greater transparency.
Energy
Brazil has a largely renewable energy matrix (90%), with an installed capacity of nearly 237 GW (including isolated systems), mainly from hydropower (49%), and solar and wind energy (34%). It is also a key player in oil (3.6 million barrels/day) and biofuels (ethanol, biodiesel, biogas, and green diesel): in 2024, Brazil produced 35 billion liters of ethanol (installed capacity: 57.7 billion liters) and 9.2 billion liters of biodiesel (installed capacity: 14.7 billion liters). The country is also positioning itself as a leader in green hydrogen.
Its energy policy, guided by decarbonization, includes the PNPB program for biodiesel, RenovaBio for biofuels, and new legal frameworks for hydrogen and future fuels. Brazil continues to exploit its oil and gas reserves while maintaining its climate commitments.
Agriculture and Environment
Brazilian agriculture, a historical and economic pillar, dominates global markets for soy, corn, coffee, and meat, thanks to its competitive advantages (land, water, climate) and technological progress. It is subject to strict environmental regulations, requiring legal reserves and preservation areas, although implementation remains inconsistent, leading to criticism.
75% of Brazil’s greenhouse gas emissions come from land-use change, mainly due to deforestation and extensive livestock farming. Decarbonization initiatives, international pressure, and agricultural intensification offer hope for reducing these impacts.
The carbon market is also expanding, with voluntary credits (REDD+, biochar) and the creation of a mandatory regulated market. However, logistical and financial challenges remain in balancing agricultural growth and sustainability.
Hygiene and Beauty
Brazil, the 3rd largest hygiene and beauty (H&B) market in the world, is dynamic and diverse. In 2024, the market was valued at BRL 125 billion, led by Natura, Boticário, Unilever, L’Oréal, and a network of SMEs. Distribution is divided between mass market (40%), direct sales, and franchises. Connected and innovation-driven consumers seek products tailored to their unique diversity (hair, skin). The market is essential but heavily taxed, requiring targeted and sustainable strategies for success.
Health
Brazil, the 9th largest pharmaceutical market in the world, represented USD 40 billion in 2023, with an annual growth rate of +10%. The public health system (SUS) covers 75% of the population but remains underfunded, while the private sector serves the remaining 25% through private health plans.
The market, dominated by local and international players, is driven by generics, biosimilars, and innovation, despite regulatory challenges. This key sector promotes innovation, employment, and public health, with strong growth potential.
Tourism
Brazil’s tourism sector rebounded strongly in 2023, driven by domestic travel, the return of regional visitors, and a growing focus on sustainability. In 2024, growth continued with the adoption of new technologies, the recovery of the MICE sector (Meetings, Incentives, Conferences, and Exhibitions), and an increased demand for local experiences.
In 2023, international tourism brought 5.9 million visitors to Brazil, generating USD 6.9 billion, surpassing the previous record from 2014. Argentina was the top source country, followed by the United States and Chile. European tourists — particularly from France, Portugal, and Germany — also represented a significant share.
In 2024, the trend continued, with a 12% increase in international arrivals between January and September, reaching 4.9 million visitors and generating BRL 30.8 billion (+25% vs. 2023). However, flooding in the Rio Grande do Sul state affected local tourism infrastructure.
The National Tourism Plan 2024–2027 aims to attract 8.1 million foreign tourists per year by 2025, supported by major projects such as COP 30 in Belém, a Club Med village in Gramado, and a Centre Pompidou in Foz do Iguaçu. Brazil is positioning itself as a key tourism destination in South America.
Insurance
CNP Assurances, a historic French insurance company, has been present in Brazil for 23 years, where it generates 20% of its global results. The Brazilian insurance market, in full expansion, benefits from a growing middle class, economic diversification, and investments in infrastructure and renewable energy.
With BRL 34.7 billion in revenue in 2023 and over 23 million contracts, CNP ranks 4th in the country. The company relies on strong partnerships, digital innovation (notably through Youse, the first insurtech in Brazil), an ambitious ESG strategy, and social initiatives such as the Instituto CNP Brasil.
CNP plans to continue its development in Mexico, Chile, and Colombia, despite local challenges (taxation, bureaucracy, financial education).
Contributors – French Foreign Trade Advisors, Brazil Committee
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Greg Bousquet – Founder, Architects Office (AO)
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Alexandrine Brama – President, LINGOPASS
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Olivier Colas – Managing Partner, Funchal Investimentos
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Thomas Dubaere – CEO, ACCOR Americas
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Virginie Fernandez – Partner, OMTARE
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Mathieu Fitoussi – President, SERVIER Brazil
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Manuel Flahault – General Manager, South America – Air France KLM
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Hubert Guarino – Health Expert, President of SCG
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Dominique Hautbergue – Regional Director, Brazil Southern Cone – AFD
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Patrick Hollard – Managing Director, Latin America, Africa & Middle East – Michael Page
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Frédéric Junck – President, CCE Brazil
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Yves Keller – CEO, VICAT Latin America
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Robert Klein – CEO, Brazil & Mexico, Voltalia
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Lara Krumholz – General Manager, Dailymotion
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David Montmasson – CEO, Safran Electronics & Defense Brazil
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Geneviève Poulingue – Director, SKEMA Brazil
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Pedro Prádanos Zarzosa – President, Veolia Brazil
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Maximiliano Villanueva – CEO, CNP Assurances Latin America
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Michael Reins – CEO, Obramax
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Patrick Sabatier – Director of Institutional Relations, L’Oréal Latin America
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Bertrand de Solere – Secretary General, CCE Brazil
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